Speaker 1: Welcome to Chopping it Up. I'm your host, Mike Hanlon,
Speaker 1: the senior Restaurant and food Service Analyst at Bloomberg Intelligence.
Speaker 1: Our research and that of bi's five hundred analysts around
Speaker 1: the globe can be found exclusively on the Bloomberg terminal. Today,
Speaker 1: we're joined by Brandon Barton, the CEO of Bite, the
Speaker 1: leading provider of intelligent KIOSK solutions for fast, casual and
Speaker 1: quick service restaurants. Thanks for doing this, Brandon.
Speaker 2: Mike, thank you so much. Really appreciate having me on.
Speaker 1: Yeah, you got it, man. I know you've been traveling
Speaker 1: a lot lately. Where you were at home this week?
Speaker 1: You on the road? What have you been up to?
Speaker 3: I'm mat this, this is the office, I'm at home.
Speaker 3: It's nice to be on the road. Next week home,
Speaker 3: the week after that, on the road next week after that.
Speaker 2: Life will the startup CEO?
Speaker 1: You know? Yeah, yeah, I know. A last time we
Speaker 1: spoke at Prosper he said you were busy. It's cool man,
Speaker 1: I know you're a big wine guy. You have anything
Speaker 1: you're looking forward to drinking this weekend?
Speaker 2: Well, not even this weekend.
Speaker 3: You know, I've tried to make a little you know
Speaker 3: thing happen at every time I go to these events
Speaker 3: in the conferences, I didn't do it a prosper because
Speaker 3: I wasn't not there for a long enough amount of time.
Speaker 3: But I like to bring big bottles of wine and
Speaker 3: introduce people to you know, old wines and what they
Speaker 3: taste like. So there's a nineteen eighty one shob that
Speaker 3: I'm bringing to fs Tech next week. But other than that, no,
Speaker 3: just you know, at home, just drink the casual stuff,
Speaker 3: cheap stuff, just you know, dinner wine, table wine.
Speaker 1: Okay, cool. Talk to me a little bit about your
Speaker 1: career journey prior to bite.
Speaker 2: Yeah, thank you for asking.
Speaker 3: So I have spent my entire career in restaurants, if
Speaker 3: you really want to go back to it starts when
Speaker 3: I was fourteen years old and you know, needed to
Speaker 3: make make some money to you know, get the new
Speaker 3: Jordans and whatnot. So I was busing tables at this
Speaker 3: amazing little burger restaurant in Bay Ridge called Skinflints. But
Speaker 3: you know, I had not exactly realized that, let's say,
Speaker 3: being a restaurant tour was a career path for me
Speaker 3: until I was fortunate enough to go to Cornell.
Speaker 2: But I didn't go to the hotel school.
Speaker 3: Figured out that there was the best hotel school in
Speaker 3: the world there and immediately transferred in. So my passion
Speaker 3: for a restaurant goes way back. But after college, I
Speaker 3: worked in a couple of amazing restaurant groups, including Union
Speaker 3: Square Hospitality Group, where you know, I didn't get an MBA,
Speaker 3: but I got an MBA in hospitality from Danny and
Speaker 3: the amazing crew that's there, Randy Gurrudy, Terry Coglin, Wilkodera,
Speaker 3: those folks who were coming up at the same time
Speaker 3: as I was. But then I made the switch over
Speaker 3: to tech. You know, there was always a part of
Speaker 3: me that wanted to make a big, scalable impact on
Speaker 3: the business. And you know, after working in a couple
Speaker 3: of different restaurant tech startups, I found myself as the
Speaker 3: fourth employee at Rezi and so we set out with
Speaker 3: an incredible aspiration to beat up Open Table. Open Table
Speaker 3: was charging restaurants a dollar per guest to come in,
Speaker 3: and we didn't think that that was right. The busiest
Speaker 3: restaurants were being charged way more proportionally than they should
Speaker 3: be than the value they were given to Open Table.
Speaker 3: You know, by signing up all these people to Open
Speaker 3: Table's platform, and I'm very proud of the work that
Speaker 3: we did at Rezi to really be a contender.
Speaker 2: If not.
Speaker 3: Now it's a two horse race, if you will, as
Speaker 3: Resi's announced their acquisition of Talk, so we acquired Reserve,
Speaker 3: which was a competitor at the time. So now it's
Speaker 3: you know, Resie and Open Table still fighting that battle.
Speaker 3: But needless to say, I've had a ton of years
Speaker 3: in restaurants and restaurant technology, more than i'd probably like
Speaker 3: to admit.
Speaker 1: On the air, bay Ridge man, that you got your
Speaker 1: start in bay Ridge as some great restaurants there. In
Speaker 1: the mid two thousands, I spent a lot of money
Speaker 1: at the Pearl Room and one on one's you know,
Speaker 1: it's funny, Mike, you'll you'll relate here. Everyone gets gaga
Speaker 1: about this espresso martini thing, and let me tell you
Speaker 1: the Pearl Room was serving espresso martinis back then.
Speaker 3: Yeah, and you know, for what it's worth, you know,
Speaker 3: I don't know if this is a New York scene,
Speaker 3: but it certainly was a Brooklyn Third Avenue scene that
Speaker 3: you and I both probably have shared drinks in the
Speaker 3: same room. And it's fun there's a night life there.
Speaker 3: It's its own little thing. And some of the funny
Speaker 3: things that I think, you know, we look at today
Speaker 3: and say that's like like an espresso martini or like
Speaker 3: the obsession with bagels and everything. It's like, yeah, this
Speaker 3: might have came out of you know, Italian American culture
Speaker 3: in Bay Ridge, you know, twenty years ago.
Speaker 1: So yeah, yeah, for sure, great spot. So how long
Speaker 1: have you been at Bite and what attracted you to
Speaker 1: the role.
Speaker 3: Yeah, I mean, look, I've been at Bite essentially since
Speaker 3: the beginning. I after my time at Rezi, I met
Speaker 3: the two co founders of Bite, Sas and Jeff and
Speaker 3: and they were working on this you know, audacious project
Speaker 3: to put kiosks into restaurants. It was after a little
Speaker 3: bit of a pivot, and they came to me knowing
Speaker 3: that I knew how to do go to market for
Speaker 3: restaurant companies and I had the restaurant experience, and said,
Speaker 3: we'd love to you know, we'd love to have you
Speaker 3: consult And so I had breakfast with them at my Aleino.
Speaker 3: Back then, I was like a four or five day
Speaker 3: week breakfast at my Aleno, you know, meeting with people
Speaker 3: type of schedule. And so I met with them and
Speaker 3: after this breakfast, I said, this is a big deal.
Speaker 3: And I went ahead and called my friends at Chickshak
Speaker 3: at the time, who were using Kiosk in their astplace location,
Speaker 3: and I said, Hey, is is this like a fad
Speaker 3: or is this is this something that's going to change
Speaker 3: the industry? And everyone said the latter. So I joined
Speaker 3: up with the co founders. A few months later. They
Speaker 3: made me CEO of the company, and Jeff, myself and
Speaker 3: Thoughs have been really been running the company since together.
Speaker 2: So it's been.
Speaker 3: Since twenty eighteen, so we've been on the journey for
Speaker 3: a while.
Speaker 1: Yeah, it's it's been interesting, you know, because Jack in
Speaker 1: the Box tried to roll these out a long time ago,
Speaker 1: and then they actually removed them from the restaurants. You know,
Speaker 1: it's interesting how much consumer behavior has changed over the
Speaker 1: last handful of years.
Speaker 3: Right, Yeah, I mean clearly, things like the pandemic had
Speaker 3: accelerated things now. Not in the beginning, of course, when
Speaker 3: we were all afraid to touch a you know, a
Speaker 3: shopping cart, never mind a kiosk, right, but you know,
Speaker 3: the adoption of technology by consumers has skyrocked it in
Speaker 3: every category. So This is not age restricted to gen
Speaker 3: z likes.
Speaker 2: No, no, no, no.
Speaker 3: Everybody knows how to order online, which means you know
Speaker 3: how to order off a Kiosk. And in a lot
Speaker 3: of cases, and I'm not saying nessay a lot of people.
Speaker 3: I'm saying a lot of cases, meaning there are times
Speaker 3: when somebody wants to go order from a cashier, and
Speaker 3: there are times when you might have your hands full
Speaker 3: or be listening to your favorite podcast like this one
Speaker 3: and not want to talk to anybody and not want
Speaker 3: to interrupt that to have to go into line and order.
Speaker 3: And so there's just a lot of scenarios in which
Speaker 3: Kiosk becomes the ideal scenario. And I think the prevalent
Speaker 3: idea for the industry at this point is to meet
Speaker 3: guess where they are. So you see a lot of
Speaker 3: innovation in drive through. You see a lot of amazing
Speaker 3: order ahead and voice AI and all this other stuff
Speaker 3: coming out, and Kiosk is a part of that. You know,
Speaker 3: it's not just going to be this one channel of
Speaker 3: walk in order but order ahead sometimes sometimes with the Kiosk,
Speaker 3: and we're part of that unifying the guest experience into
Speaker 3: a solid hospitality experience.
Speaker 1: I'd imagine you've gain a lot of inquiries from restaurant
Speaker 1: chains with significant exposure to California.
Speaker 3: Totally true, and you'd have to think that part of
Speaker 3: that is the increase in minimum wage two twenty dollars
Speaker 3: an hour any attack. Look Throughout my career, the through
Speaker 3: line has been how do I help restaurants create more
Speaker 3: ebitdah like, how do I help them become more profitable
Speaker 3: by using and leveraging technology? And that's purely based on
Speaker 3: my love for restaurants.
Speaker 2: I want to see.
Speaker 3: I was part of one of the most amazing restaurants
Speaker 3: in New York called Tabla. It had an amazing, you know,
Speaker 3: incredible eleven year twelve year run and then closed and
Speaker 3: the number of the number of things that we tried
Speaker 3: to do to make a three hundred and fifty seat
Speaker 3: Indian restaurants survive in New York at the time, it
Speaker 3: really spurred this idea of how do we make sure
Speaker 3: that we can preserve restaurants the way that they are
Speaker 3: and have people who operate well stay open. And you
Speaker 3: can see, you know, there's been a slew of bankruptcies lately,
Speaker 3: and you might point, you know, there might be a
Speaker 3: through line here on the folks that were not early
Speaker 3: enough to adopt new technologies, order ahead, move on to
Speaker 3: the third parties and not innovate as part of these
Speaker 3: these folks that are essentially you know, not surviving, and
Speaker 3: so long story short, you know, we strive to kind
Speaker 3: of make the profitability of the restaurant better. In Californi,
Speaker 3: there's increased pressure on the P and L because of labor,
Speaker 3: and so if we can enable their staff to do
Speaker 3: more by just keeping the staff the way they are.
Speaker 3: There's a misnomer that there's people getting fired because of chaosis.
Speaker 3: This is just not true. It's really about supplementing what
Speaker 3: they can do so they may be able to get
Speaker 3: the drinks faster if they're not taking the order, which
Speaker 3: is a really transactional part of the hospitality experience.
Speaker 1: Yeah, for sure, you're freeing them up for more high
Speaker 1: value jobs, right than just taking that.
Speaker 2: Order exactly, and not even just high value.
Speaker 3: There's very few pure play cashiers in the entire restaurant industry.
Speaker 3: That is always a fraction of their job. Okay, and
Speaker 3: so if we could take that fraction away, can the
Speaker 3: dining room be cleaner, can the bathrooms be cleaner, can
Speaker 3: the food come out quicker? And so we see our
Speaker 3: restaurants have increased revenue, not just because we are efficient
Speaker 3: and great at presenting them the guests with items that
Speaker 3: they want to order. We'll talk about our AI that
Speaker 3: does that, but also because food production can go quicker
Speaker 3: and the line can be smaller. There's all these other
Speaker 3: benefits that don't get factored in. But we're happy about
Speaker 3: all the brands that we work with in California. It
Speaker 3: certainly is a place. But now Washington, Oregon, New York,
Speaker 3: other places that are considering raising the minimum wage will
Speaker 3: see the same effects.
Speaker 1: Yeah, for sure. Congrats on the Portillo's deal.
Speaker 2: Thank you.
Speaker 1: I've read that they're testing that they're kios in California.
Speaker 3: Right, Yeah, they are, well, not just in California, downtown
Speaker 3: Chicago to some of their busiest stores. That test is
Speaker 3: going really well, and probably by the time we're talking
Speaker 3: about this is even more news to come of that.
Speaker 3: And you know, talk about an environment where you're putting
Speaker 3: Kiosk to the test. Those restaurants, I believe their average
Speaker 3: store volume is nine million dollars. That's so on the
Speaker 3: far end of what an average unit volume for a
Speaker 3: restaurant brand like that is uh, you know, we have
Speaker 3: tons and tons of volume that are being done and
Speaker 3: the guests are adopting it. It just this is the
Speaker 3: this is the thing that's different than five years ago
Speaker 3: or six years ago. If you put Kiosk in your
Speaker 3: restaurant and do it smart and in the right way
Speaker 3: and have the right hospitality that you're teaching your your
Speaker 3: team that goes along with that, guests are very willing
Speaker 3: to adopt Kiosk as part of their ordering process.
Speaker 1: Yeah, we had uh, we had mic Osamlu the CEO
Speaker 1: on the pod. I guess it was last year. I'm
Speaker 1: a fan, super sharp, sharp guy. Great conversation. What kind
Speaker 1: of average check increases are your Kiosk customers getting from
Speaker 1: the technology and how much of the improvement is more
Speaker 1: consistent up selling versus maybe just giving customers more time
Speaker 1: to browse the menu.
Speaker 3: Yeah, it's a great question. I think it's hard to
Speaker 3: parse the division of those things. We have been, you know,
Speaker 3: using AI before it was cool to say you are
Speaker 3: and even from the beginning. One of the reasons that
Speaker 3: I joined Bite was because Sauce our Cto was so
Speaker 3: incredible at this and he was able to create an
Speaker 3: algorithm using you know, some of the most advanced kind
Speaker 3: of machine learning technologies to learn how people like to order,
Speaker 3: and then you know, offer items to guests that may
Speaker 3: or may not know those items exist and might go
Speaker 3: along with the meal that they're having. And so we
Speaker 3: typically will see a twenty percent increase in average check.
Speaker 3: Sometimes it's way bigger than that. Sometimes, you know, in
Speaker 3: certain scenarios where there's not tons of things to upsell,
Speaker 3: that might be more in the ten to fifteen percent range.
Speaker 3: And the idea of upselling, we as consumers know that
Speaker 3: as somebody asking you to buy something, but it's very different.
Speaker 3: On a kiosk, it's just presenting a bunch of options,
Speaker 3: and so there is this light touch to it where
Speaker 3: it's just a guest opting in to the idea of
Speaker 3: buying something or adding double meat or I didn't know
Speaker 3: that you could put extra chi on this for fifty cents,
Speaker 3: where those are not questions that you would get when
Speaker 3: you're ordering with somebody. Imagine if every time you ordered
Speaker 3: a burger, like you want double cheese, you want double meat,
Speaker 3: do you want you know sidur fries? Would you like
Speaker 3: to know upsize that This is not a hospitality experience,
Speaker 3: whereas using a digital experience you could put a lot
Speaker 3: of options to people they opt their way into them.
Speaker 3: But our intelligence is showing guests things that they are
Speaker 3: highly likely to want to order. And that's based off
Speaker 3: of our data that we have with the restaurant. But
Speaker 3: not only that data, but we use the data from
Speaker 3: the entire you know, eight years of doing this, and
Speaker 3: we can draw conclusions about what, I don't know, what
Speaker 3: trends there might be in certain regions, or if it's
Speaker 3: cold not to sell ice cream, you know, which seems
Speaker 3: pretty simple to do, but yet at the same time
Speaker 3: it's very effective for guests increase in average.
Speaker 1: Check Okay, cool, I guess kind of on that same vein.
Speaker 1: Are any of your customers using the data in their
Speaker 1: loyalty programs or face recognition to provide customers in even
Speaker 1: more personalized Kiosk experience?
Speaker 2: Oh? Absolutely so.
Speaker 3: We do have facial recognition. It was also something that
Speaker 3: wowed me back at that breakfast. Facial recognition is opt
Speaker 3: in by a guest and it's opt in by the brand.
Speaker 3: Every brand doesn't necessarily have to use that, and the
Speaker 3: facial recognition is great because sometimes the idea of let's
Speaker 3: say type your phone number in for loyalty, or scan
Speaker 3: this thing so that we can recognize who Mike is
Speaker 3: on this next order, that sometimes feels.
Speaker 2: Like a lot to do.
Speaker 3: And imagine you could just walk up to a screen
Speaker 3: and it knows that's you, and it says your last order,
Speaker 3: you know, was this exact bowl with this add on
Speaker 3: and not this one and take this out and put
Speaker 3: this in. It's a lovely way to have a very
Speaker 3: light touch loyalty, right, and recognize somebody and then give
Speaker 3: them personalized recommendations. So one of the things the algorithm
Speaker 3: will do is understand if you like things that are spicy,
Speaker 3: will suggest more things that are spicy to you.
Speaker 2: Right.
Speaker 3: That might be, you know, instead of just the regular prize,
Speaker 3: maybe it's the spiced curly fries I don't know, that
Speaker 3: go along with something.
Speaker 2: And therefore we.
Speaker 3: Are moving more towards that personalization. I think the next
Speaker 3: step here is not just to understand your behavior as
Speaker 3: a guest on a Kiosk, but your behavior as a
Speaker 3: guest in the entire ecosystem for that restaurant. So that
Speaker 3: means if I could pull your order from the app
Speaker 3: last time and say do you want to reorder this?
Speaker 3: It might not be what you want to do at
Speaker 3: that moment because you were ordering for you and your
Speaker 3: family versus ordering for just yourself, But that becomes the
Speaker 3: next step in this idea of personalization. You have one
Speaker 3: account with this and regardless of the digital channel that
Speaker 3: you go through, you'll have access to that order history.
Speaker 3: And this is why you hear many brands, I'm sure
Speaker 3: as you listen into earnings calls as I do, talking
Speaker 3: about one hundred percent digital because they want to have
Speaker 3: this holistic view of the guests and make sure to
Speaker 3: service them the best way they can in each one
Speaker 3: of these channels.
Speaker 1: Yeah, it's really interesting what percentage of people are opting
Speaker 1: in and how are restaurant chains kind of motivating them
Speaker 1: to do so.
Speaker 3: Yeah, I mean, look, I think it varies. You know,
Speaker 3: it's above fifty percent. You know, the opt in is again,
Speaker 3: it's light. It's not an idea of having to let's say,
Speaker 3: use a clear machine at the airport where it's like
Speaker 3: put your irises in the exact spot. Okay, you know,
Speaker 3: we have a fairly high accuracy, and I think the
Speaker 3: motivation is for your the customers that are our frequent customers.
Speaker 3: I remember the first restaurant that we launched in New York.
Speaker 3: I would sit it was a couple of blocks away
Speaker 3: from our office, and I would sit there and watch,
Speaker 3: and we had some people that would come in and
Speaker 3: clearly they were like busy at work, they had a
Speaker 3: half hour to get lunch. They'd come in and with
Speaker 3: a couple of taps on a screen, they'd have their
Speaker 3: order done. Whereas if it's the first time you're experiencing
Speaker 3: the brand, you might want to, as you said, take
Speaker 3: your time browse the menu.
Speaker 2: I have.
Speaker 3: We've had some fun with Dig. Tracy Kim, the CEO there,
Speaker 3: she's actually and uh And it was just on on
Speaker 3: my podcast a Simmer talking about how some guests are
Speaker 3: using this to better navigate a menu because a menu
Speaker 3: board doesn't have a full description of it and if
Speaker 3: it did, it would be overwhelming. Right, So what is
Speaker 3: in the health bowl or the Caesar salad bowl or
Speaker 3: you know, in their case, like the roast chicken plate.
Speaker 3: You can look much deeper into it on a person,
Speaker 3: you know, a screen that's personalized to you.
Speaker 1: So, yeah, Digs great, they have great chicken thighs. I'm
Speaker 1: I frequent it when I'm up at our seven thirty
Speaker 1: one lev.
Speaker 3: I think it's one of the best values, especially if
Speaker 3: you are factoring in your health. They have such an
Speaker 3: incredible healthy menu, So if you're looking at to you know,
Speaker 3: for a healthy lunch, option digs the spot.
Speaker 1: Yeah, they do a great job. What's the forty five
Speaker 1: percent role?
Speaker 3: Le?
Speaker 1: So I listened to one of your podcasts you were
Speaker 1: on with Rev. Ciancio, and I think it was something
Speaker 1: about about customers walking by, you know, I you know,
Speaker 1: because some places the line is too long, right. We
Speaker 1: see that in a you know, I see that, you know,
Speaker 1: in drive throughs.
Speaker 2: You know.
Speaker 1: McDonald's some years ago was talking about how they have
Speaker 1: five more than five cars in the line, people will
Speaker 1: just drive past. And ye know, Chick fil A has
Speaker 1: a lot higher to like demand and people are more
Speaker 1: willing to wait, so it might be twenty five cars, right,
Speaker 1: And so that is impacting restaurants, especially in the city. Right,
Speaker 1: if people see long lines, they might go elsewhere, right.
Speaker 3: It impacts restaurants everywhere. Yeah, so I think the status
Speaker 3: forty five percent of guests that see a line are
Speaker 3: going to are gonna, you know, walk out the door right,
Speaker 3: a lot of more than three people, right, And so
Speaker 3: you know, thank you for bringing that up. Even in
Speaker 3: places that are you know, pay less, like at Chipotle,
Speaker 3: where you're going to walk through an experience, they always
Speaker 3: will have a line. But when that line gets long enough,
Speaker 3: there's something that we call que rejection. And so the
Speaker 3: idea is that you know, same thing, whether it's within
Speaker 3: your car or not. You're seeing a line and you're saying, no,
Speaker 3: I'm not going here, that's gonna take too long.
Speaker 2: Now. By the way, the Chipotle line, the Sweet Green line.
Speaker 3: They're fast. That it's not that these lines are slow,
Speaker 3: but the perception of it is that it is. And
Speaker 3: so if you can offset some of those orders to
Speaker 3: a kios that's sitting on the side, you know, easily
Speaker 3: accessible by the guests, people are way more willing to
Speaker 3: wait for their food than they are to wait to
Speaker 3: order their food, because then it seems like you're waiting twice,
Speaker 3: you know, Like I said before, I mean, I'm a
Speaker 3: very digital focused person. So I'd love to get my
Speaker 3: order in and then check my app and see what
Speaker 3: the score of the game was last night. Check Fantasy
Speaker 3: you know, see the Giants lose again and and then
Speaker 3: you know my salads ready perfect?
Speaker 1: Yeah, all right, good stuff. What's the impact of kios
Speaker 1: on on employee turnover and satisfaction?
Speaker 2: Yeah?
Speaker 3: I mean, look, I think we'd love to have a
Speaker 3: lot more hard data on this, but generally speaking, if
Speaker 3: you're a tip ticking res tips go up, right we
Speaker 3: are we're offering an experience that can make sure to
Speaker 3: prompt a guest for tipping if they want to do that,
Speaker 3: and you could set percentages on whatever you want. Doesn't
Speaker 3: have to be a twenty percent tip, but the overall
Speaker 3: tips go up. I also think that it takes a
Speaker 3: lot of pressure off their job responsibilities. I think you
Speaker 3: would know when you're trying to juggle two or three
Speaker 3: balls at the same time, like taking an order, putting
Speaker 3: the order together, getting drinks, and doing all those things
Speaker 3: at once. You could take one of those things away
Speaker 3: and just cut it down to two, you're going to
Speaker 3: be better and more efficient at it. So we have seen,
Speaker 3: and this might perhaps be counterintuitive, but we've seen a
Speaker 3: lot of staffs embrace the idea of Kiosk ordering so
Speaker 3: that they can actually execute on their job better. And look,
Speaker 3: people don't get into the restaurant industry for just a job.
Speaker 3: A lot of people want to do this because they
Speaker 3: feel making others happy is part of that bonus. It's
Speaker 3: not just the wage that I can, but I want
Speaker 3: to make have an impact on other people's lives, right,
Speaker 3: And so I think it allows Kioskodering allows that person
Speaker 3: to do more of the personal interaction. Again counterintuitive, take
Speaker 3: the transaction part out of it and give somebody take
Speaker 3: an extra few seconds to hand somebody their order and say, Mike,
Speaker 3: thanks so much for coming in today. And I guarantee
Speaker 3: you those hospitality employees feel the impact of the smile
Speaker 3: that Mike gives back to them before they leave, and
Speaker 3: they and Mike might say have a great day, yeah.
Speaker 1: One hundred percent. Man. I think that's part of the
Speaker 1: issue that we're seeing with Starbucks, is right, that was
Speaker 1: the cafe where the barista knew your name right when
Speaker 1: you walked in, and they've they've gotten away from that, right,
Speaker 1: It's kind of become soulless, transactional, and I think it's
Speaker 1: really impacted their sales. So it's really important to be
Speaker 1: able to free up your employees to provide hospitality, no
Speaker 1: matter what the concept.
Speaker 2: Is yeah, And I think that's kind of the point.
Speaker 3: With Starbucks is that the the the increased variations on
Speaker 3: their menu have made it ever so much more difficult
Speaker 3: to be a barista. And so never mind that you
Speaker 3: now have to be a barista in a cashier or
Speaker 3: barisa and a you know, you know, the person that's
Speaker 3: handing you all your food fulfillment. Right, So I totally
Speaker 3: agree with that.
Speaker 2: I think.
Speaker 3: Look, I think I probably am one who thinks that
Speaker 3: Brian is going to do great things there in his
Speaker 3: new role. So you know, he's already come out with
Speaker 3: a little statement on how he's going to change the
Speaker 3: environment to be that third place again. And happy to
Speaker 3: uh to receive a call from them if they want
Speaker 3: to do some stuff with bite.
Speaker 1: Nice nice plug. I I yeah, I'm looking forward to
Speaker 1: seeing what what he can accomplish at Starbucks. That's going
Speaker 1: to be. That's gonna be a fun one to track,
Speaker 1: for sure. I'd imagine the technology is helping sun Chains
Speaker 1: ease the issue of late night staffing.
Speaker 3: Late night and midday okay, right, so Midge, you know
Speaker 3: shift changes even you know, even the idea that a
Speaker 3: restaurant is drive through heavy. So we have some restaurants
Speaker 3: that we work with that are over seventy percent drive
Speaker 3: through and again, multiple balls in the air. Can we
Speaker 3: take one away? So, if you have the majority of
Speaker 3: your staff and the majority of your revenue coming through
Speaker 3: drive through, and everyone's focused on this one or two
Speaker 3: windows out the side of the restaurant, how can you
Speaker 3: have your eyes in the back of your head to
Speaker 3: be in both places at once? And so how great
Speaker 3: is it to be able to have your focus on
Speaker 3: that seventy percent revenue channel and then the other thirty
Speaker 3: percent coming in the store? You hot, you know that
Speaker 3: you have to deliver on that that handoff that hospitality
Speaker 3: experience when you're giving people what they've ordered or even
Speaker 3: making sure that the dining room's clear. So I think
Speaker 3: that applies to late night when you might be shorter staffed.
Speaker 3: I think it applies to, you know, the shoulder periods
Speaker 3: as well. We've had a restaurant brand who actually has
Speaker 3: quite an older clientele. You know, if you were to
Speaker 3: compare them to the Chipotles and and maybe the Sweet
Speaker 3: Greens of the world, and they found that that the
Speaker 3: Kiosk always being able to be there to take an
Speaker 3: order and not having somebody wait, while there's shifting things
Speaker 3: happening in the kitchen and people are trying to do
Speaker 3: multiple things at the same time. Really added to that,
Speaker 3: let's say two to five pm time period where people
Speaker 3: are coming in and just want to get something and
Speaker 3: you know, have a very quick and easy experience.
Speaker 1: Yeah, and that's a home run. You're leveraging the box
Speaker 1: in a slow time, right, and so you're leveraging your
Speaker 1: fixed costs. It's it's helpful, for sure. Sure. I've read
Speaker 1: in one of the case studies on your website that
Speaker 1: bite help to lower food cost So does that mean
Speaker 1: food costs are going down as a percentage of sales
Speaker 1: due to the higher AUVs and average checks and the
Speaker 1: up selling higher margin menu items or is there something
Speaker 1: more to it than that.
Speaker 3: Well, typically the things that are additive to the main
Speaker 3: part of a meal are lower food costs. Your French
Speaker 3: fries are cheaper than the burg The soda is way
Speaker 3: cheaper than the French fries. And so if we can
Speaker 3: help to remind people that they forgot to put a
Speaker 3: drink in their cart, or they forgot to you know,
Speaker 3: add that extra side, or maybe it's a dessert, these
Speaker 3: are lower costs. Lower food cost items, and therefore you know,
Speaker 3: food cost is going to go down as a total
Speaker 3: percentage of sales. Also, as you mentioned, all the variable
Speaker 3: costs go down as sales go up. That's that's how
Speaker 3: that works, right, you know, So you know, the the
Speaker 3: cost of labor so to speak, is going to go
Speaker 3: down as sales go up if you're not adding more
Speaker 3: labor to do that. Now, food cost doesn't exactly act
Speaker 3: the same way. But but if we're adding the sales
Speaker 3: on these higher margin items, it's going to bring down
Speaker 3: the food costs in a you know, significant way.
Speaker 1: Yeah, that's great. Talk to me about the secret menu
Speaker 1: at Shacks che Big Chicken.
Speaker 3: Let me can I just start by saying, Shaquille O'Neil
Speaker 3: is He is exactly who you think Key is in
Speaker 3: terms of how kind and generous and amazing he is.
Speaker 3: I spent nearly an hour with him at the Big
Speaker 3: Chicken conference in Las Vegas. Shout out to Josh and
Speaker 3: Josh and all and Sam and all the team out
Speaker 3: there for getting that to happen. And and you know,
Speaker 3: we set off on this project to try to bring
Speaker 3: Shack's personality into a Kiosk experience, and so We didn't
Speaker 3: just say hey, let's just do this in a small way,
Speaker 3: in the big Chicken way with the capital big. We
Speaker 3: did it in a big way. We actually have changed
Speaker 3: our entire user experience to be able to do this
Speaker 3: not just for them, but to do this for many
Speaker 3: other brands. So before we were saying, hey, this is
Speaker 3: a great way to get the transaction done, but now,
Speaker 3: how do we add a hospitality experience? How do we
Speaker 3: add fun to that transaction to make guests want to
Speaker 3: come use the kiosk? And there was no better path
Speaker 3: or you know, initial place to do this. And with
Speaker 3: Shaquille O'Neil probably the most memorable you know, celebrity that
Speaker 3: I know, Okay, and so we have instances of Shack
Speaker 3: throughout the entire you know, chicken menu, flapping chicken wings
Speaker 3: and doing all this. But the kicker and the best
Speaker 3: part in my mind, was we had a little area
Speaker 3: where if you click it, and you figure out that
Speaker 3: you can click this area, you get into Shack's secret menu.
Speaker 3: And it's not just Shack, it's the entire O'Neal family.
Speaker 3: So his mother has an item's there that she wants
Speaker 3: or done Lucille's way, his daughter. He has menu items
Speaker 3: that are done her way, and so it's really about
Speaker 3: appealing to multi generational but also putting a little fun.
Speaker 3: I mean McDonald's, you know, did some good stuff here
Speaker 3: when they had the Travis Scott menu, for example, and
Speaker 3: they you didn't have to change what you have in
Speaker 3: your kitchen, but how do you do a shacksway?
Speaker 2: You know?
Speaker 3: And I think that's really cool. So there's so much
Speaker 3: more that is going to come out of that. I
Speaker 3: hope that some of our restaurants will embrace us and
Speaker 3: maybe even look to local celebrities or influencers and say,
Speaker 3: you know, you see this on old school menus. This
Speaker 3: is the way Brandon has his martini, So we're going
Speaker 3: to put it on the menu. That's honoring the people
Speaker 3: and the regulars around you. I would love to see
Speaker 3: people say this is this is just a salad for
Speaker 3: us here and it's double chicken caesar kale, and that's
Speaker 3: exactly the way Sally does it every Tuesday, and now
Speaker 3: we have it on the menu for her.
Speaker 1: Yeah, that's very cool. I'm not really sure. I'm a
Speaker 1: huge fan of Shaq and the Inside the NBA show,
Speaker 1: so I haven't heard any updates about what's going to
Speaker 1: happen with it. But now that like TNT lost that contract,
Speaker 1: I'm kind of like heartbroken.
Speaker 2: Me too, me too.
Speaker 3: I think it's I don't know, it's fairly improbable to
Speaker 3: me that they're going to keep Shaq and Chuck off
Speaker 3: at the NBA TV circuit in some way.
Speaker 2: I hope the idea.
Speaker 3: Of having Shaq and Chuck still involved with, you know,
Speaker 3: commenting on basketball is going to be there. Maybe they'll
Speaker 3: go the Peyton and Eli way and you could just
Speaker 3: tune into T and T and have them sitting there
Speaker 3: watching a game.
Speaker 1: That'd be cool. Also, where do I got to touch
Speaker 1: on the menu? Because I noticed there's a big chicken
Speaker 1: on my way home from work, so I'm going to
Speaker 1: have to get one of those up. It's in Bridgewater,
Speaker 1: New Jersey. So where do I have to touch the menu?
Speaker 3: Yeah?
Speaker 1: Sure, sure to find that menu.
Speaker 3: If you look at it long enough, it'll say, you know,
Speaker 3: like something like a shosh you know, don't touch here,
Speaker 3: but chat On the bottom left hand side of it.
Speaker 3: Shack is sitting there and telling you know, if you
Speaker 3: hit Shack kind of like a little whack a mole
Speaker 3: if you hit shack at the menu will come up.
Speaker 1: Okay, very cool. I got to check that out. All right.
Speaker 1: What do you think of McDonald's move to test these
Speaker 1: kiosks that accept cash.
Speaker 2: I love it.
Speaker 3: I mean, you know, you talk about you were talking
Speaker 3: a little bit about the news cycles on kiosk and
Speaker 3: this that it was like stop and go for Jack
Speaker 3: and other places. Also, the commentary around McDonald's kiosk program
Speaker 3: has been wrapped up in a bunch of noise like there,
Speaker 3: you know, total digital transformation being I don't know, six
Speaker 3: figures for franchisees and the franchisees revolting and some people
Speaker 3: took that a revolting on kiosk and guess what they
Speaker 3: were not. And so it's just a signal to me.
Speaker 3: McDonald's is certainly the leader in so many categories. Innovation
Speaker 3: is one of them as well, And it's just a
Speaker 3: signal to me that they see more and more use
Speaker 3: cases and more and more guests that want to come
Speaker 3: and use the kiosk, and they're maintaining their value proposition
Speaker 3: while also increasing the hospitality by saying you can now
Speaker 3: you know, do a cash transaction here. You know, we're
Speaker 3: partnered with a great company glory to be able to
Speaker 3: do that as well in certain cases. And look, I
Speaker 3: think cash transactions are declining. I think that's not a
Speaker 3: controversial thing to say, but in certain scenarios, in certain
Speaker 3: states and certain locations, you want to be able to
Speaker 3: take cash because you want to have a hospitality experience
Speaker 3: for everybody. Okay, you don't want to exclude people from
Speaker 3: that because they, you know, didn't use a credit card
Speaker 3: or just we're using cash today. So I love it,
Speaker 3: and I think it underscores the idea that kiosk are
Speaker 3: going to be in every QSR and fast casual restaurant
Speaker 3: in the next few years.
Speaker 1: Yeah, I agree. Ten years later, Chili's brought back xiosks. Right,
Speaker 1: why did he work last time? Was it just were
Speaker 1: they just too early? And what do you think about
Speaker 1: them bringing that technology back?
Speaker 3: Well, you know, you know my non professional opinion here,
Speaker 3: I guess, or you know, not fully educated on what
Speaker 3: the Chili's team has in mind. I think the idea
Speaker 3: of having something to assist their service staff to provide
Speaker 3: better service by allowing guests to order the second round
Speaker 3: of drinks at the table makes sense.
Speaker 2: You know.
Speaker 3: Going back to the comment abound around some of the
Speaker 3: brands that have not innovated, having struggles and bankruptcy and
Speaker 3: things like that. This is Chili's way to perhaps try
Speaker 3: to move into innovation cycle. I will say frankly that
Speaker 3: that whole let's say family dining, casual dining category, you know,
Speaker 3: as well as I is getting smushed. I mean, more
Speaker 3: people want to go to Kava and sit down and
Speaker 3: not have table service, then they might want to go
Speaker 3: to a more casual and then they'll save the table
Speaker 3: service for a higher end experience, maybe something like a Hillstone.
Speaker 3: And so the category is getting crushed, and that means
Speaker 3: the margins are getting hurt and they have to figure
Speaker 3: out something. So I applaud Chilis for doing it. I
Speaker 3: will say, you know, the majority of my background, you know,
Speaker 3: has been in fine dining and has been at my
Speaker 3: hospitality background has been in table service. I think that
Speaker 3: that's probably the highest level where you want to see,
Speaker 3: you know, tablet assisted ordering. That that's where it stops
Speaker 3: to me. If I, you know, I don't think Hillstone,
Speaker 3: you know, if we go up a level should adopt
Speaker 3: something like this, I think you will start to degrade
Speaker 3: the relationship between server and guests. Which is a part
Speaker 3: of the full service experience, and so you know, for
Speaker 3: what it's worth. You know that that's something that we've
Speaker 3: even tried with with higher end like fast casuals or
Speaker 3: even i should say casual dining, and it's not the best.
Speaker 3: It's not the best experience for guests. And if we
Speaker 3: do anything at Bite, we care about the guest experience
Speaker 3: more than anything.
Speaker 1: Yep, yeah, for sure. Yeah, Chili's has done a great job.
Speaker 1: And it also eliminates another pain point, which is like
Speaker 1: paying the check. You know sometimes you know, if you
Speaker 1: got young kids, they tear it into a pumpkin after
Speaker 1: a certain amount of time at the table or whatever
Speaker 1: it is, and you have to get out of there.
Speaker 1: So I think it makes sense for a chain that's
Speaker 1: catering more to families.
Speaker 3: The paying the check thing is interesting because everyone there
Speaker 3: was there's always been a ton of companies in the
Speaker 3: restaurant technology space that's like, you can pay your check faster.
Speaker 3: And yes, I understand that that is a pain point
Speaker 3: that the guest feels, and that's great, But the thing
Speaker 3: that the promise of it always has been and you'll
Speaker 3: turn that table faster. Okay, Well, if you don't have
Speaker 3: another guest to go fill that table immediately, and it's
Speaker 3: going to just sit empty for the time the guests,
Speaker 3: those initial guests would have been paying the check. You're
Speaker 3: actually not generating more revenue through table turns. It's a
Speaker 3: big misnomer that I think, especially as you get to
Speaker 3: maybe some of the smaller table service restaurants concepts. You know,
Speaker 3: unless you're filling nine point thirty turning your what are
Speaker 3: you turning your tables to to what? To an empty
Speaker 3: dining room? So but I do I do you know,
Speaker 3: I know that there's pain in getting a check and
Speaker 3: getting it paid.
Speaker 1: So heard, Yeah, all right. We touched on this a
Speaker 1: little bit, the voice AI. Right, So McDonald's recently ended
Speaker 1: their trial after some well publicized issues. On the other hand,
Speaker 1: Taco Bell is ramping up their trial this year. So
Speaker 1: what have been the issues with voice AI And when
Speaker 1: will this really be a viable technology that everybody's going
Speaker 1: to start adopting.
Speaker 3: I think it's already passed viable yet I don't think
Speaker 3: it's past scale, okay, And so the viability of this
Speaker 3: could work in certain environ in certain restaurants, but I
Speaker 3: don't think it's going to work at scale for another
Speaker 3: few years. The acceleration of artificial intelligence will help this
Speaker 3: because we are talking about a very complicated piece of AI.
Speaker 3: It's not just suggesting items, but it's trying to understand accents,
Speaker 3: regional accents. I mean, this is you know, not you know,
Speaker 3: non English speaking language. You know, guests that are coming
Speaker 3: and trying to communicate makes.
Speaker 2: It very hard.
Speaker 3: By the way, in the future, it's going to make
Speaker 3: it very easy because if you speak Japanese, it will
Speaker 3: speak Japanese back to you.
Speaker 2: How lovely is that? But it's not the case today.
Speaker 3: The thing I think most about is some of the
Speaker 3: stats that have been out about the order accuracy and
Speaker 3: how many orders can can be put in without an intercept. Okay,
Speaker 3: and an intercept might be a staff employee, but sometimes
Speaker 3: maybe what I what I don't like about it is
Speaker 3: the intercept is coming from a third party. And I
Speaker 3: know that there's been issues with our people listening into
Speaker 3: this conversation in California. That's that there's some lawsuit that
Speaker 3: was there. And you know, I think restaurants need to
Speaker 3: be experimenting with this for sure and move at a
Speaker 3: very deliberate pace with it. Be very diligent about understanding
Speaker 3: how the guest feels. One of the lovely things about
Speaker 3: Kiosk is usually somebody's grabbing their order and sitting in
Speaker 3: a restaurant. You can ask them if you want. If
Speaker 3: they're driving off, you don't actually know how they felt
Speaker 3: about that experience. Sure there's a survey, Sure there's a this,
Speaker 3: but man, I would be really inspecting how the guest
Speaker 3: feels and if the guest feels like that was done
Speaker 3: well and without issue. And by the way, I have
Speaker 3: there are many customer service experiences now that include this
Speaker 3: that are outside of restaurants, right, and you're talking to
Speaker 3: a bot. You all, we all have been there and
Speaker 3: been like operator operator operator, right, and so so we
Speaker 3: don't want that level of frustration ever in the hospitality industry.
Speaker 3: But I have had some in certain scenarios that have
Speaker 3: been beautiful and seamless. We were talking about internet problems before.
Speaker 3: There's a way Optimum reset your internet in five seconds
Speaker 3: you talked to about it's over and you don't actually
Speaker 3: need to talk to anybody on the phone. And so
Speaker 3: I have a lot of hope for this category, and
Speaker 3: I think we're in the early inning.
Speaker 1: Great excluding Kiosk ordering, what restaurant pain points are AI
Speaker 1: best suited to solve.
Speaker 3: I'll go to something that's probably even a little bit
Speaker 3: further than voice voice ordering.
Speaker 2: But kitchen robotics.
Speaker 3: Okay, just by the nature of cooking, it's a repeatable process,
Speaker 3: there are steps to it. And again at the higher
Speaker 3: levels of dining, this is not this is we're very
Speaker 3: far out from that. But at the levels of dining
Speaker 3: and QSR, you know, cooking French fries seems like something
Speaker 3: that can be an automated process. I applaud the Sweet
Speaker 3: Green team for what they've did and alleged they've they've
Speaker 3: gone out on with you know, with regards to buying
Speaker 3: spice and and and putting in the Infinite kitchens. I
Speaker 3: went to the Infinite Kitchen store and Penn Station area
Speaker 3: recently just to check out the newest one because it's like,
Speaker 3: the question was, can we make the footprint an urban
Speaker 3: footprint for Sweet Green? And it was cool and you know,
Speaker 3: by the way plug again, they went ahead and adopted Kiosk,
Speaker 3: and they built something in house because it had to
Speaker 3: be perfect with the Infinite Kitchen. But they took this
Speaker 3: this step of automating the back of house in front
Speaker 3: of house at the same time. And you know, I've
Speaker 3: even had a chance to visit Kernel, which is Cevel's
Speaker 3: new spot in New York. They're doing well. They're not
Speaker 3: doing Vegan anymore, which is interesting. But I have a
Speaker 3: lot of hope that artificial intelligence and machine learning and
Speaker 3: all the intelligence around cameras and vision of what to grab,
Speaker 3: when to grab it, when it's cooked, infrared, all of
Speaker 3: these things add up and yeah, we could we can
Speaker 3: automate some steps in that hospitality or in the cooking experience.
Speaker 3: So I have a lot of hope for that category.
Speaker 1: Yeah. Well, I know a lot of restauranteurs do too,
Speaker 1: looking forward for that those investment costs to come down. Yep,
Speaker 1: all right, great stuff, man, Brandon, thanks for doing this.
Speaker 1: Where can listeners find out more about bite?
Speaker 3: Yeah, I mean get bitte dot com. I mean I
Speaker 3: if people are listening, want to reach out to me,
Speaker 3: I'm a Brandon at gatbyte dot com. I love talking
Speaker 3: to people that have used kios. Want to do any
Speaker 3: of that, and then look out for I have this
Speaker 3: wonderful podcast myself with Chris and Hawley of Expedite do
Speaker 3: a shameless plug there and The podcast is called the
Speaker 3: simmer Apple Spotify Listen Up. We talked to incredible restauranteurs,
Speaker 3: the tech CEOs, everything, and maybe we'll have Mi co
Speaker 3: on too.
Speaker 1: Yeah, that'd be awesome. And your podcast experience definitely shown
Speaker 1: through on this episode. Man, you're great. You're a pro
Speaker 1: for sure.
Speaker 2: I appreciate that. Man. Thank you for saying that.
Speaker 1: You got it, and thanks for to Audio for tuning in.
Speaker 1: If you liked the episode, please share it with your
Speaker 1: friends and colleagues. Check back soon for another episode of
Speaker 1: Chopping It Up.