WEBVTT - Rethinking the Future of Fast Food

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<v Speaker 1>This is Bloomberg Business Week with Carol Messer and Tim

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<v Speaker 1>Stenebeck on Bloomberg Radio.

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<v Speaker 2>I've been spending a lot of time on the road

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<v Speaker 2>this summer, tapping.

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<v Speaker 3>Into plane streains and automobi.

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<v Speaker 2>Drive through fast food. Do not judge me, but our

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<v Speaker 2>next guest really understands the space big time. What are

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<v Speaker 2>your I have a happy meal. Don't judge me. We

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<v Speaker 2>got a happy meal, chicken McNugget, a little bit a fry,

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<v Speaker 2>and I get a water.

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<v Speaker 4>Do you get a toy?

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<v Speaker 2>Sometimes?

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<v Speaker 4>Yeah?

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<v Speaker 3>Wow, You're just you. You and my four and a

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<v Speaker 3>half year old would really get along because he likes

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<v Speaker 3>to have well. Our next guest understands the space big time,

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<v Speaker 3>and really the overall mobile restaurant space. It's been a while,

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<v Speaker 3>but it's great to have back with us. Christopher Sefkin,

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<v Speaker 3>head of technology at Zeni. It's a subsidiary of the

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<v Speaker 3>publicly traded Global Payments Xenial. It's a thirty two billion

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<v Speaker 3>market cap company that's up about twenty five percent year

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<v Speaker 3>to date. Chris joins us on a zoom from Charlotte,

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<v Speaker 3>North Carolina. Chris, how are you good?

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<v Speaker 4>How are you doing pretty well? Yeah?

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<v Speaker 3>Doing doing pretty well thanks, Okay. So we had on

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<v Speaker 3>our plane call this morning, we got into a little

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<v Speaker 3>debate about how people order and the lack of people

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<v Speaker 3>who are around when you go into a restaurant, and

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<v Speaker 3>it kind of feels like, I'll be honest, it feels

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<v Speaker 3>like in this day and age, a lot of the

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<v Speaker 3>work that people used to get paid to do, like

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<v Speaker 3>taking orders, now falls on us the consumer. Yeah, I

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<v Speaker 3>think there's definitely been a shift, and I think what

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<v Speaker 3>our customers and restaurants have done has really taken an

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<v Speaker 3>all of the above approach, like you can, you can

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<v Speaker 3>still talk to a person if you need to, But

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<v Speaker 3>I think what they've really done is redeployed the folks

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<v Speaker 3>that are working in those restaurants more towards the production

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<v Speaker 3>of the food and getting you what you ask for,

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<v Speaker 3>and allowed the technology to take the ordering experience so

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<v Speaker 3>that you can, you know, do more customizations and have

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<v Speaker 3>more you know, specific things that you might want. And

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<v Speaker 3>we find that customers really take advantage of those capabilities

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<v Speaker 3>when they have say a Kiosk or a mobile app

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<v Speaker 3>or another ordering mechanism other than just walking up to

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<v Speaker 3>a person where you feel time pressure to figure out

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<v Speaker 3>the menu and you may not understand everything that's coming

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<v Speaker 3>on a sandwich, so that that is something that you

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<v Speaker 3>would expect to feel. But I think from an actual

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<v Speaker 3>restaurant employment perspective, you'll see that that that labor hasn't

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<v Speaker 3>left the building, but perhaps moved around a bit.

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<v Speaker 2>So how's it all evolving? Right, We're all getting used

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<v Speaker 2>to jumping up to a kiosk or mobile ordering. Where

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<v Speaker 2>does it go from here?

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<v Speaker 4>Yeah, it's a good question.

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<v Speaker 1>I think we see a lot of folks testing out

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<v Speaker 1>the voice spot, voice AI and the drive through, so

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<v Speaker 1>I think you're going to see some more of that.

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<v Speaker 4>You're going to see I think a good bit more.

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<v Speaker 1>Of that as as generative AI, you know, gets better

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<v Speaker 1>at being able to have those conversations with customers. I

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<v Speaker 1>think you're going to see an additional move towards those

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<v Speaker 1>kiosk experiences. We've seen a lot more adoption recently. It's

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<v Speaker 1>not a new technology, has been around for a long time,

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<v Speaker 1>but we've seen a lot of a lot more folks

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<v Speaker 1>adopting it. I think also you're going to see more

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<v Speaker 1>sophisticated sort of drive through and pick up environments where

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<v Speaker 1>you know a lot of folks are testing out more lane,

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<v Speaker 1>four lane drive throughs, drive throughs that have specific mobile

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<v Speaker 1>ordering pickup points, things that help.

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<v Speaker 2>Caught Tim's attention. There, nanny just perked up.

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<v Speaker 3>Chris, I gotta tell you. I mean, Chris, you can't.

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<v Speaker 3>I don't know if you can play favorites here, just

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<v Speaker 3>do me a favorite, play favorites. But does anyone do

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<v Speaker 3>it as well as Chick fil A?

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<v Speaker 1>I can't play favorites, But I mean they definitely are

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<v Speaker 1>folks that all of our customers watch and everybody keeps

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<v Speaker 1>you abreast of whatever they're doing. And so you know,

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<v Speaker 1>I know they're building a new restaurant concept. I think

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<v Speaker 1>I saw that in the news. I think a lot

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<v Speaker 1>of folks are watching. Like I said, that's four lane.

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<v Speaker 1>How do we do four lane drive throughs?

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<v Speaker 4>Really? Well? I see that happening in quite a few instances.

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<v Speaker 2>Well, is that like what Chipotle's doing in terms of

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<v Speaker 2>you have a drive through I think specifically for mobile ordering,

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<v Speaker 2>and then there's people who come up and who are

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<v Speaker 2>actually doing the order there. I mean, this is what

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<v Speaker 2>we're talking about. This is where we're moving towards.

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<v Speaker 1>Yeah, I think what's happening is a lot of folks

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<v Speaker 1>are experimenting with new ways to do this. I mean,

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<v Speaker 1>when you deal with cars and you're working with drive throughs,

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<v Speaker 1>you're limited to the real estate of the actual space

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<v Speaker 1>that you're working on. And so some of these restaurants

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<v Speaker 1>you see with an elevated second floor try to take

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<v Speaker 1>advantage of the fact that there's only so much ground

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<v Speaker 1>floor that cars can move on. And then you know,

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<v Speaker 1>like I said, you've got a lot of folks that

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<v Speaker 1>are are kind of experimenting and trying to figure out, well,

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<v Speaker 1>how do I maximize that through But either of a

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<v Speaker 1>real estate they currently have that's already out there, or

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<v Speaker 1>when they build new buildings or redesign and re upfit places,

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<v Speaker 1>you know, what's going to be the most efficient way

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<v Speaker 1>to move cars through and take advantage of that pre

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<v Speaker 1>order technology? So, do we have one drive through lane

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<v Speaker 1>that's dedicated to a mobile pickup then other lanes that

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<v Speaker 1>are more traditional, you know, sort of like the toll

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<v Speaker 1>booth concept where you go easy pass versus you know,

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<v Speaker 1>a regular lane.

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<v Speaker 4>Kind of thing.

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<v Speaker 3>It's interesting, I actually come from a town that outlawed

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<v Speaker 3>drive throughs. I believe it was in the nineteen eighties

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<v Speaker 3>due to environmental concerns, and I'm wondering if increasingly we're

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<v Speaker 3>starting to see that idling cars. Yeah, no drive throughs

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<v Speaker 3>allowed in Sandleance, Obispo, California. Is that something that you see,

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<v Speaker 3>Chris increasingly happen?

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<v Speaker 4>Is that?

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<v Speaker 3>Is that conversation happening again?

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<v Speaker 4>From my viewpoint the opposite.

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<v Speaker 1>Like I said, we've seen a lot more folks looking

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<v Speaker 1>to try and expand the capability of the drive through

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<v Speaker 1>versus shrinket. The pandemic closed in interior restaurants, and folks

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<v Speaker 1>now are looking at ways to build restaurants that maybe

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<v Speaker 1>don't even have an indoor experience at all and are

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<v Speaker 1>only servicing drive through or pick up, you know, delivery

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<v Speaker 1>type orders.

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<v Speaker 2>Hey, tell us about stuff like camera based car recognition technology.

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<v Speaker 2>What exactly is that about? And that makes me a

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<v Speaker 2>little freaky, but go ahead.

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<v Speaker 4>Yeah, that's a good question.

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<v Speaker 1>We're working on some pretty cool technology on this front,

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<v Speaker 1>and rather than being creepy, what we're focused on is

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<v Speaker 1>really understanding what's happening in the line so that if

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<v Speaker 1>we get an order to you, like let's say, somebody

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<v Speaker 1>walks up to your car and takes your order and

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<v Speaker 1>then hands you the bag of food, you know, we

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<v Speaker 1>want to understand that how long did that interaction really

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<v Speaker 1>take and when did that happen, And so if you

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<v Speaker 1>drive away, before you leave the line, we want to

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<v Speaker 1>know what's going on so we can help figure out

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<v Speaker 1>if these new strategies and things are working. So what

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<v Speaker 1>we're really focused on there is just your car type

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<v Speaker 1>in colors. It's a black sedan, a red truck, so

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<v Speaker 1>on and so forth, and understanding as you move around

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<v Speaker 1>maybe there's a merge that that happens. We can reorder

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<v Speaker 1>those events in the kitchen to help the staff members

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<v Speaker 1>understand they're getting the right order, the right car. One

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<v Speaker 1>of the key things that you want to get when

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<v Speaker 1>you go to one of these places is the order

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<v Speaker 1>that you ordered.

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<v Speaker 4>You know, made the right way.

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<v Speaker 3>Yes, Chris, I want to talk to you about this. Okay.

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<v Speaker 3>I've been to a drive through like one time in

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<v Speaker 3>the last six months. It was on Saturday, was the

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<v Speaker 3>Happy Meal. We ordered a six we ordered a six piece,

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<v Speaker 3>we ordered an apple juice, and we got an order

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<v Speaker 3>that was that was wrong. And I know these things happen.

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<v Speaker 3>I mean, I worked in fast food when I was

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<v Speaker 3>a teenager, and you know, we're all human I'm wondering though,

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<v Speaker 3>because people make mistakes, how do you how do you

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<v Speaker 3>use technology to decrease the number of mistakes.

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<v Speaker 1>I mean a great example of that is, you know,

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<v Speaker 1>that final event that happens in the kitchen is that

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<v Speaker 1>you know, worker is taking the food out of the

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<v Speaker 1>out of the restaurant. We're actually putting a picture of

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<v Speaker 1>the car up that they're delivering to.

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<v Speaker 4>So they've got the bag of food.

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<v Speaker 1>They yeah, hit the button and now because of the

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<v Speaker 1>camera tracking, we know, hey, that's the car you're bringing

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<v Speaker 1>it to. Is one more final like, you know, step

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<v Speaker 1>and think about it. We're just trying to reduce the

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<v Speaker 1>number of things a person working in this environment has

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<v Speaker 1>to think about.

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<v Speaker 4>We want to make it easy, you.

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<v Speaker 1>Know, as easy as possible, so they can walk in

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<v Speaker 1>and start working and do their job and you know,

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<v Speaker 1>produce that experience that that the brand wants to produce

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<v Speaker 1>every time.

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<v Speaker 3>For what it's worth, my kid a one chicken nugget

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<v Speaker 3>and then fell asleep, so it didn't matter at all

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<v Speaker 3>that we could get the six piece instead of the

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<v Speaker 3>four piece.

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<v Speaker 2>So hey, Chris, I do wonder how much of this

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<v Speaker 2>just makes sense because of how the pandemic impacted us

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<v Speaker 2>in you know, all the food ordering or the mobile

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<v Speaker 2>ordering and the you know, how that kind of has

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<v Speaker 2>changed us forever. Is a result of the demand that

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<v Speaker 2>you're seeing a result of the pan demic specifically, or

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<v Speaker 2>is it also a tighter labor force and so we

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<v Speaker 2>need to kind of figure out how to make restaurants

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<v Speaker 2>work and mobilize or use technology to automate things that

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<v Speaker 2>were once taken care of by humans.

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<v Speaker 4>I think it's both.

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<v Speaker 1>We definitely saw a huge behavioral shift in folks moving

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<v Speaker 1>to the drive through, for example, as opposed to going

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<v Speaker 1>inside and doing more delivery. I think we've seen some

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<v Speaker 1>of the delivery volume drop a little bit compared to

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<v Speaker 1>you know, coming to the restaurant again, you know, probably

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<v Speaker 1>for cost concerns, But what we've really seen is that

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<v Speaker 1>the workforce itself, you know, is looking for jobs that

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<v Speaker 1>it makes sense, and the tightness in the labor market

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<v Speaker 1>means that you have to compete not only for the

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<v Speaker 1>technology that the consumer uses, but you want to compete

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<v Speaker 1>also for that worker who's going to choose between working

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<v Speaker 1>for you or somebody across the street who maybe has

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<v Speaker 1>a more difficult concept to run. And so we definitely

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<v Speaker 1>have seen that technology try and enhance the worker experience

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<v Speaker 1>and automate some of those tests so that workers have

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<v Speaker 1>more job satisfaction for what they're doing.

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<v Speaker 4>Try.

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<v Speaker 3>I'm gonna try to get you to pick a favorite

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<v Speaker 3>one last time. What's what's your favorite? Fest Foed.

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<v Speaker 4>I don't know. It's a good question. I think it

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<v Speaker 4>would be wrong for me to pick a favorite at

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<v Speaker 4>this point. I don't think that's fair.

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<v Speaker 3>I bet you do, but you know, we'll let it

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<v Speaker 3>slide this time. You can't have a favorite?

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<v Speaker 4>Ki, Yeah, I do like a good chicken sandwich.

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<v Speaker 2>I gotta say, okay, Chris, listen, thank you so much. Chrisyfkin.

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<v Speaker 2>He's head of technology at Xenial is, a subsidiary the

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<v Speaker 2>publicly traded global payments company that's a thirty two billion

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<v Speaker 2>dollar market cap company, roughly up about twenty five percent

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<v Speaker 2>year to date. Joining us on Zoom from Charlotte, North Carolina,