Employees at Taco Bell, Pizza Hut and KFC restaurants around the world are getting new coworkers: Artificial intelligence.
Specifically, the fast-food chains’ parent company, Yum Brands, is aggressively pushing more AI programs into its restaurants as part of a “second phase” of its digital and technology efforts. Speaking on Yum’s third-quarter earnings call on Tuesday, executives said they had more than 40 AI-driven projects in the business. And each of its big three U.S. brands has tested some form of AI.
“We believe we are still only scratching the surface of the full value creation potential of our capabilities,” CFO Chris Turner told analysts.
The Louisville, Kentucky-based company is working on labor scheduling, inventory management, consumer feedback, quality control monitoring and marketing, “to name a few,” Turner said.
A number of major U.S. restaurant chains have been implementing AI into their restaurants in some form for years.
Such efforts are typically designed to streamline certain tasks inside restaurants, which can free up employees and managers to devote their time elsewhere. In theory, the technology could one day enable restaurants to operate with fewer employees, though the bulk of industry executives at least publicly say that is not the goal, and that hasn’t quite happened yet.
Yum Brands has been developing this technology in-house, and executives believe their efforts are a competitive advantage.
The company has used acquisitions, such as its 2021 purchase of Dragontail systems, to fuel much of this technology effort. It has its own point-of-sale system, called Poseidon, and an e-commerce engine. It also developed a restaurant management platform it calls SuperApp.
AI appears to be the next step. Some of that is customer-facing. Earlier this year, Taco Bell said it plans to expand the use of voice-activated AI into hundreds of drive-thrus in the U.S. and internationally, in a bid to make ordering faster and improve operations.
The technology is in more than 300 U.S. stores and the system has processed more than 2 million orders.
David Gibbs, Yum’s CEO, said the early results from the effort have been “outstanding.”
“The customer response has been very positive,” he said. “And our team members really enjoy having what they call an extra pair of hands in the restaurant to help them operate the store.”
Taco Bell is also working on a system in the drive-thru that enables loyalty members to identify themselves at the drive-thru and kiosk. That system is in 160 stores and has led to an increase in loyalty memberships and improved transactions from those members, without slowing speed of service, Turner said.
Taco Bell is accelerating its use of digital menu boards.
Yum is also bringing AI into labor management. Taco Bell now has an AI-enabled labor scheduling program in more than 5,000 U.S. locations. The AI is designed to improve efficiency through improved forecasting, which should enable a more efficient use of labor.
Taco Bell now uses artificial intelligence on labor scheduling and inventory management, and Turner said that Yum plans to roll out both of these programs to its other brands next year.
The chain is also using more AI-based marketing campaigns, which are designed to increase customer engagement and, in theory, drive more purchases.
Gibbs noted that Taco Bell’s use of AI-based marketing can work with its loyalty program, digital menu boards and its point-of-sale system to connect with customers more often.
“We’ve got many ways to bring it to life,” Gibbs said. “But it essentially allows us to do more, personalized tailoring of offers and refine much more rapidly than we could before. So we’re excited about the potential of this.”
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