During Chipotle’s Q2 earnings call in late July, executives made it clear the system needed to refine some of its operational processes as dine-in business returns while off-premise business remains elevated.
In doing so, Chief Restaurant Officer Scott Boatwright touted the company’s Project Square One, a game plan focused on employee training to execute orders more efficiently. Today, the company announced it’s also getting more technology involved.
Chipotle is testing two technologies specifically to streamline operations and reduce friction–a kitchen management system and an advanced location-based platform.
In eight Southern California restaurants, Chipotle is testing PreciTaste’s kitchen management system that provides “demand-based cooking and ingredient preparation forecasts” by leveraging artificial intelligence and machine learning. According to Chipotle, the system monitors ingredient levels in real time and notifies employees how much to prep, cook and when to start cooking. The system was created to not only optimize throughput but to also minimize food waste.
“The new kitchen management system has alleviated manual tasks for our crew and given restaurant managers the tools they need to make informed in-the-moment decisions, ultimately enabling them to focus on an exceptional culinary and an outstanding guest experience,” Chief Technology Officer Curt Garner said in a statement.
This isn’t Chipotle’s first foray into AI. Earlier this year, Chipotle announced a test with Miso Robotics to bring its artificial intelligence-driven Chippy into its Cultivate [innovation] Center to replicate the chain’s signature tortilla chips. That test is now expanding, with Chippy making its first restaurant debut next month in a Fountain Valley, California, location.
From there, the company will gauge employee and guest feedback before developing a broader rollout plan.
During a recent interview, Garner said the company is looking at everything from internet of things to machine learning to run its restaurants more efficiently and enable crew members to focus on other tasks.
“When you see us leaning into this space, it will be a question of ‘are there better tools to help our crews versus removing a task?’ Those are the kind of things we’re looking at,” Turner said.
The company is also currently testing Radius Networks’ Flybuy, a “contextual restaurant program,” at 73 Cleveland-area restaurants designed to identify Chipotle app users’ intent upon arrival. The location-based technology utilizes real-time data to let customers know their orders are ready, to remind them to scan the Chipotle Rewards QR code at checkout and more. It even alerts customers if they’re in the wrong pick-up location.
The program has yielded positive results so far, according to Chipotle, including improved in-store rewards engagement and delivery efficiencies.
“Empowering our restaurants with advanced technologies is critical for operational excellence and better positions our teams for our ambitious growth plans,” Boatright said in a statement.
Notably, Chipotle isn’t the only chain exploring AI technology to improve operations. White Castle has been testing Miso Technology’s Flippy in the back of the house for about two years, for instance, while Jamba has partnered with autonomous food platform Blendid to automate smoothies. Several restaurant chains, including Applebee’s, IHOP and Tropical Smoothie Cafe, leverage Flybuy.
In fact, a new survey from Capterra found that 76% of restaurants are currently using automation in three or more areas of operation, while 96% of restaurants are using some type of automation tool in the back of the house. As such, the cooking robotics space is expected to grow by over 16% a year through 2028 with an estimated worth of $322 million by 2028.
That said, Chipotle’s scale, company-owned model and zero-debt balance sheet adds a bit more intrigue to this trend. Chipotle has some latitude to pilot new solutions without franchisee investment or pushback, and any proven return on investment will likely provide a strong case for adoption across an industry still very much struggling with labor shortages.
Further, all of these technologies enhance throughput, a major focus for Chipotle to drive more sales. During the company’s Q2 call, for example, CEO Brian Niccol said order fulfilment was in the low 30s on a per-15-minute basis nearly 10 years ago, which adds a full percent on comp sales on the day.
“On a 15-minute basis, that’s what we’re going after,” he said during the earnings call.
Chipotle’s announcements today come on the heels of the company’s Cultivate Next venture fund launch, created to identify strategically aligned companies for early-stage investments. As part of this $50 million fund, Chipotle has already invested in Hyphen, a foodservice platform that automates kitchen operations, and Meati Foods, a company that provides plant-based proteins.
Chipotle is also leveraging a new scheduling tool, has invested in autonomous delivery company, Nuro, and is testing radio-frequency identification to trace and track ingredients in its restaurants.
In a recent statement, Garner said the company is exploring investments in innovations that will enhance employee and guest experience and “quite possibly revolutionize the restaurant industry.”
“Investing in forward-thinking ventures that are looking to drive meaningful change at scale will help accelerate Chipotle’s aggressive growth plans,” he said.
Chipotle currently has about 3,000 locations, with plans to grow to about 7,000 in the coming years.