Business

Artificial Intelligence Is Reshaping the Fast-Food Industry, Despite Mixed Reactions

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Over the past few years, fast-food restaurants, ranging from White Castle to Wendy’s, have made significant investments in artificial intelligence (AI) technology, particularly for drive-thru operations. While these businesses are optimistic about potential benefits such as increased sales and efficiency, there are concerns about the potential impact on employment and customer satisfaction.

Driving AI Adoption

Since 2021, several chains have been experimenting with AI tools, including automated voice ordering systems, which replace human interaction with AI technology at the drive-thru. These efforts gained further momentum in May 2023, when CKE Restaurants (owner of Hardee’s and Carl’s Jr.) and Wendy’s announced major AI initiatives. CKE plans to broaden its AI ordering capability following a successful pilot. At the same time, Wendy’s has expanded its partnership with Google Cloud to include an AI ordering tool at the drive-thru, currently being piloted in Columbus, Ohio. Even industry suppliers are acknowledging the challenges inherent in this application. Thomas Kurian, CEO of Google Cloud, recently emphasized the difficulty of AI handling drive-thru orders in a noisy environment (Wall Street Journal).

Customer and Employee Reactions

Public reaction to AI drive-thrus has been mixed. There have been reports of AI errors, and some customers have expressed a preference for human interaction. In one case, at an Indiana White Castle using AI in its drive-thru, three out of ten customers requested to speak with a human employee due to errors or a desire for human interaction.

The Upsell Potential

Despite the hurdles, companies see potential benefits in adopting AI. Presto Automation, an AI company working with restaurants, including CKE, noted that AI could drive sales through constant upselling, potentially resulting in higher check sizes. They argue that customers prefer faster service and higher customer satisfaction, both of which can be facilitated through AI. Additionally, the technology can suggest products based on the weather, time of day, the order itself, or the customer’s order history.

Industry-wide Adoption

The trend toward AI adoption is not limited to CKE and Wendy’s. Other chains, including McDonald’s, Del Taco, and Wingstop, have also begun using AI for drive-thru or phone orders. Yum! Brands have been using AI to streamline food preparation and delivery. Panera Bread and Chipotle have gone a step further, applying AI to both front- and back-of-house operations, including voice ordering and product consistency control.

Workforce Considerations and the Future

AI’s role in the fast-food industry isn’t just about customer interaction—it also has significant implications for the workforce. The National Restaurant Association predicts the industry will add 500,000 jobs by the end of 2023, but currently, there’s just one job seeker for every two open positions. Some see AI as a solution to this issue, but others worry that it may replace human jobs. Despite these concerns, AI’s potential to augment service speed, increase sales, and provide better customer satisfaction could result in a domino effect of adoption across the industry. However, broad adoption still has several hurdles, including getting franchisees on board and handling language barriers and menu complexities that AI may not yet navigate efficiently. 

A Closer Look at Specific AI Initiatives

CKE Restaurants has made a noteworthy stride in incorporating AI. The company aims to launch AI integrations nationwide, partnering with Presto and OpenCity AI. Similarly, McDonald’s sold McD Tech Labs to IBM in 2021, leading to a strategic partnership aimed at infusing AI technology into their drive-thru lanes.

Reimagining Back-of-House Operations

Other chains are leveraging AI to improve back-of-house operations. Yum! Brands, for instance, has been a frontrunner in using AI to enhance operations, integrating Dragontail technology to automate kitchen flow, driver dispatch, and customer order tracking. It’s currently used in 1,000 Pizza Hut locations in the U.S. and nearly 3,000 more globally.

AI Enhancing Customer Experience

AI isn’t solely an operational tool but also a means to provide a more personalized experience for consumers. Panera Bread is using AI in collaboration with OpenCity AI for drive-thru voice ordering and with Miso Robotics to ensure coffee quality and temperature control for product consistency. The company aims to use AI to give restaurant workers the opportunity to create more meaningful experiences with guests. Chipotle, a tech leader in the restaurant space, has introduced Chippy, its robotic chipmaker, which was trained using AI to reproduce the brand’s chip recipe accurately. The company also uses AI on its app for suggestive ordering, giving customers a more tailored experience.

Conclusion

While there’s still a long way to go, and more tests and adjustments will be required, there’s no denying that AI has made a bold entry into the fast-food industry. Only time will tell how it reshapes the sector and how customers and workers will adapt to this technological evolution.

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