Vegetarian Automation, The End of Lunch and Meyer’s not Qu’ing his investment into Qu

Did you ever wonder how the future of food delivery would look like? Brace yourself as we dive into a fascinating discussion about the ongoing consolidation of the restaurant and off-premise industries. We'll be talking about HelloFresh and Nestle's new strategic moves and what they mean for your dinner table. Break down the ins and outs of HelloFresh's bold move towards establishing its own delivery fleet, and Nestle's big-bucks investment in Wanda with a vision of a mega mealtime app. Ponder with us on the potential impacts these developments may have, from improved customer service to innovative menus and even service.

Transcript

Speaker 1: 0:00

Chipotle's founder pops, a kernel, the new way to promote restaurants positively, and the end of lunch. As we know it, that's all ahead On this week's Digital Restaurant. The Digital Restaurant works like this we're going to ask each other five questions about headlines that affect the worlds of restaurants, off-premise and technology, but in some way tie back to our book series Delivering the Digital Restaurant. Are you ready? Let's go? Good morning, meredith. How are you doing today?

Speaker 2: 0:42

So good. How are you Carl?

Speaker 1: 0:44

I am doing well. Are you preparing your turkey for Thanksgiving?

Speaker 2: 0:47

Oh.

Speaker 1: 0:47

You haven't turkey this year.

Speaker 2: 0:49

Oh am I ever.

Speaker 1: 0:51

Last year with turkey. It didn't work out, if I remember rightly.

Speaker 2: 0:54

You have a better remember than I do. I don't remember, but usually I focus on the pie. What?

Speaker 1: 0:58

kind of pies In the Sandland Household this year.

Speaker 2: 1:01

A combination pumpkin pecan. It's got both. That is excellent. I've been making it for 20 plus years Going.

Speaker 1: 1:11

Very good. Well, happy Thanksgiving. Grateful for you as always.

Speaker 2: 1:14

Grateful for you too, and I also heard that your wife was hosting a lovely event next week.

Speaker 1: 1:22

That's right, a little Friendsgiving, which was in support of the Ukrainian refugees here in Southern California. So we're going to be going over and having some fun with the folks that have come over from that part of the world, and obviously a lot of other people and their families and friends back home for them are still having quite a tough time.

Speaker 2: 1:41

Yeah, she's got a big heart, that Alicia.

Speaker 1: 1:44

She sure does.

Speaker 2: 1:44

Question one the HelloFresh Nestle Wonder Situation Delivery. There's so much going on here I think I don't even know what the question is, because there's a lot happening. Can you maybe explain it to us?

Speaker 1: 1:59

Well, two separate stories that, I think, show a theme of consolidation. This year We've talked a lot about these companies out there that have been consolidated in terms of functionality and feature set to be all things to all people, and then we've talked about other companies getting acquired as part of the whole consolidation happening in the space. Well, these two new stories, I think, are a similar theme, but in different ways, to demonstrate the efforts that are happening in the ecosystem we talk about to improve quality and customer service. So, first of all, hellofresh and Nestle are mixing things up in the food world, each in their own way, but I think it's all about cutting out the middle man, as you asked. And let's start with HelloFresh. They're rolling out their own delivery fleet, with 500 vehicles in their 19 biggest markets across the US, and the idea of this is that they want to make deliveries faster and cheaper, and they're also eyeing the chance to offer fresher I'm guessing, less shelf-stable food as well, which allows them to perhaps improve upon the product. They're also looking to be a bit more eco-friendly by cutting down on packaging like insulation and ice packs.

Speaker 1: 3:03

Now Remember when Blue Apron, hello Freshers' competitor, got scooped up by Wanda for a cool $103 million. Well, nestle have just pumped $100 million into Wanda as well, which is now, according to what I saw, a $3.5 billion valuation, which is aiming to be this mega mealtime app. We've heard a lot about these big valuations in the past, and so let's see whether it plays out. But now here's the thing Nestle their investing may need to boost this thing called WandaWorks, which is all about serving up meals at hotels, stadiums and offices. And I guess the question about why they're doing this. I think they want to go beyond just selling in stores and reaching customers directly. They're currently surfacing $200,000 or so out in the market already, and I think they're seeing this as a way to solve some big headaches that the outlets they serve today, like more innovative menus, for example, or dealing with the staff shortages by being able to bring some of their products into the mix a little faster. So this could mean better room service in hotels, it could be more choice in office cafeterias, and I think they're also planning to make pizza and pasta for Wanda as well. So maybe there's a virtual brand play in all of this. So why are they doing it? Well, I think it's about moving the middleman out for themselves in terms of retail, as accessing more customers directly, as well as being able to perhaps drive some efficiencies for Wanda when it comes to the Blue Apron side.

Speaker 1: 4:27

So what do I think of this? Well, hellofresh's decision to utilize their own fleet makes sense if they can utilize that fleet efficiently. It's the same thing we've always said about restaurants having their own fleet If they're going to be able to be utilized as fully as you hope, that actually makes a lot of sense. I believe they're going to be using electric vehicles, but those vehicles aren't necessarily cheap and they need to be used at that right level of volume and frequency to legitimize the up-from-capital cost. There's also the labor angle, but that could also be a differentiator right, because you could see it as a way of being able to improve the customer service. Perhaps and they haven't talked about this, but perhaps it could also be used as a way for leftover packaging collection and recycling. So I think there's a number of really interesting things about HelloFresh piece. If they can get the necessary volume in those 19 markets.

Speaker 1: 5:14

That's what Wanda and Nestle are. Wonder doesn't do things by half. I mean, they've moved from being an organization where it was just delivery on the move to then a marketplace and who knows where they're pivoting to next. But I do think the value efficiencies from the Nestle integration here could be something that really helped the blue apron service Be able to improve the product and to improve the way in which meal delivery is happening in the US. So our Nestle products going to be a differentiated enough solution to drive someone at a stadium from one of the more established brands out there? I don't know, but I guess we'll find out in time. Okay, second question this week Chipotle's former founder, mr Els, I believe, has created a new concept called kernel. Tell us a little about this.

Speaker 2: 5:55

Yeah, I'm really excited about this concept. It is a vegetarian, heavily automated Concept. What is exciting about it to me is, as we think about the future and what restaurants are likely to look like. They're starting there right, so it's super fun that they have Created a concept that's small footprint, heavily automated and is everywhere that we think Restaurants are going. They've just done it today. It is, of course, very well funded. Els has put 10 million of his own money, according to restaurant technology news, and already raised an additional $36 million from investors. So to have raised $46 million as a restaurant without having built a single restaurant is a pretty impressive feat. But, of course, he's a pretty impressive man having created Chipotle. We see a lot of founders who, once they've succeeded, people are betting on them succeeding again. Hopefully he does.

Speaker 1: 6:54

Yeah, I'm looking forward to checking those out. When the first store January? Is it next year? We shall see. Well, that sounds like a former CDO not wanted to commit to her time. Well, look, before you go on to question three, I would love to ask you, of course, it's time to be grateful. We're always grateful for everyone that tunes into us, especially our regular listeners, and if you haven't yet, please go on to your podcast platform. Or, if you're listening to us on YouTube, give us a five star Subscribe, if you haven't already. Really helps us make sure that folks out there are listening to us and because of your connections, they will also get recommendations too, about perhaps tuning into the digital restaurant as well. So thank you for listening and tell your network about listening as well.

Speaker 2: 7:33

Okay, question three is for you, carl. We talked last week about social media recommendation apps, and Now there are even more, so tell us about the two that came out this week.

Speaker 1: 7:46

Well, they haven't come out this week. They've been around for a while, but I think it's certainly something that's driving some attention. My wife has this phrase before we sit down to eat a meal and I think she might have used it in front of you and it says camera eats first, and I always said well, what are we gonna do it with the photos that we take of what the camera is eating first? Right, because she takes lots of photos, and they're beautiful photos of the food, and I'm sure revsiancio Will agree always important to take a good photo of the food before eating it. But oftentimes, what ends up with those photos is that we end up sharing them online through Instagram or through our social feeds, and then, oftentimes, a friend will message us back and I've been there, it's great. Or shall we go together another time? And I share that story with you because I think we've mentioned this stat in the past that 92 93% of diners trust reviews from friends and family more than any advertising, and Perhaps even more personally 88% of diners trust reviews from strangers as much as they trust from those from friends and family, and so it's perhaps no surprise that we're talking about these two new apps that are given some attention and, certainly, momentum, especially because they focus on social sharing and creating a positive experience shared in a very community Focused manner. These apps, I think, represent quite a significant shift perhaps how restaurant experiences are shared and discovered in Traditional terms, and I think they could impact the way the industry thinks about this now.

Speaker 1: 9:09

The first one. I'll bring up an image here. It's called AtmosFi. Atmosfi is an app which has recently raised about $14 million. It's already used in 150 countries, 10,000 different cities. It's ranked in the top 50 of app stores around the world. It challenges the traditional static review websites by incorporating almost like a TikTok inspired approach. There's very much around short-term video content that helps users discover local businesses, including restaurants. Atmosfi's design allows users to get a real-time sense of the atmosphere hence the name something that a traditional system can't necessarily offer. I think this could probably enhance customer engagement and provide more of a dynamic, immersive way for potential customers to explore different options out there. Soon, I believe that restaurants will be able to promote themselves by pain to put video reviews of their restaurant into people's feeds. You can almost see an influencer play on that. That's AtmosFi.

Speaker 1: 10:10

Let's bring up the other one here, which is Rex. Rex does it in a slightly different way. They take a different route, emphasizing the importance of social interaction and personal recommendations over anonymous reviews. Here's where you can save spots that you're at or flag places to try in the future. Then, if your friends flag the same spot, the app nudges you on an ongoing basis, at different times, to then create a group chat and set up a time and date to then go and meet at that particular restaurant. It's really designed to encourage users to spend less time on their phones and encourage more times socializing in person and sharing their favorite places with friends and trying to keep track of the recommendations over time. This one, I think, is a little further back to where AtmosFi is, but I do think it's going to again try and enrich this community-oriented culture of where recommendations are more personalized and trusted because it's coming from one's own social network, interest and angles.

Speaker 1: 11:08

On this one, I think it perhaps will have effects on the way in which marketing strategies play out. Restaurants might need to change their approach to how they can utilize platforms like this. I think it certainly will have an impact on traditional review sites and the relevancy of those. I think it certainly plays nicely into the social aspect. But similarly there could be challenges. I think Yelp at times has been under challenge in the past because of how genuine is the review. So there might need to be an appropriate level of content moderation and user moderation so that way the commercialization of these things don't become something that impinge the authenticity of them.

Speaker 2: 11:44

I love the positivity of it. But I think that's great. I mean, I tend to read all the three star and above reviews and not the negative ones, because I kind of see the negative ones as someone had a really terrible experience. Now, if there are a lot of negative reviews or the review score is very low on average, that's probably a sign that people have worse experiences than better. But I like hearing the positive. Why did someone go there? What do they love about it? Because for a lot of things there's a use case for everything. It's just making sure you pick the right restaurant for the right occasion.

Speaker 1: 12:16

Yeah, I think it plays into the psyche also of being able to encourage someone to leave a positive review, and I think the intent of both of these apps is, at least through its algorithm, to try and promote the better experiences as opposed to the poor ones. Okay, great news that we heard about QPOS. A certain Danny Myron is investment company have supported Q and I think it's going to be interesting to see how this helps them continue their product rollout. What do you know about this one?

Speaker 2: 12:45

Absolutely Well. First of all, congratulations to our friends like Q, amir, nico and Jen, and everybody over there. This is great news for you guys. Awesome job Well done. Two great companies together. We've got Light and Hospitality and Q, so that's a pretty good combo, I guess.

Speaker 2: 13:00

First we should start with what is Q? It's called QU. They often say beyond POS. What does that mean? Is it a POS or not a POS?

Speaker 2: 13:09

They call it a unified commerce platform. What they are attempting to do is bring together all channels into one place so that you've got a clear view of the data and the customer, regardless of how they got into your system or how the order is getting to them, which, of course, is near and dear to my heart with Empower. I think that is what they mean by beyond POS, although, interestingly, they still integrate with tons of other things. I think they said they had over 90 integrations. So even though it's unified, it's still very flexible and can reach out into other types of technology, which I found fascinating, because you wonder what happens with those integrations. How do they keep that unification alive when they're pulling data in from somewhere else?

Speaker 2: 13:56

Anyway, what they did not say in this article was whether any of the Union Square Hospitality would end up using the Q platform, so maybe we'll hear some more news soon. Typically, it's great to get Danny Meyer's stamp of approval. He's put his stamp of approval on things like OLO in the past and just really ignites a lot of potential for the company. But often that's because his restaurants are using the product. So I am keenly waiting to hear if there is more news to follow this one.

Speaker 1: 14:29

The one thing I really love about Q is that they're very specific about who they focus on QSRs and fast casual.

Speaker 2: 14:34

It's really refreshing to see technology companies disqualify customers oh yeah, we don't do that, we don't do that. It just makes it much easier for everyone to figure out some things for them. And our last question, Carl, is lunch over what is happening?

Speaker 1: 14:54

Yes, this is on to the farm one. The Easy Cater Lunch Report came out, meredith. That offered up some valuable insights into the current lunchtime trends and behaviors in the workplace. And, of course, lunch and the workplace have been through some tough times. I think it's fair to say over the last few years, covid in particular has impacted the way in which people are actually even in the workplace, right, but what I'll do, as always, because I know we like to bring up these stats the report that is available on Easy Cater's website has this here First of all, 29% of office workers block out time, but 62% say they usually can't use that time for a meal.

Speaker 1: 15:30

So there's an intention to block out time for a break for lunch, but 62% of it never usually happens. But 48% the big number that you can see there say they skip lunch at least once a week. And then, if you scroll down a little further here to the next page on the report let me just go up here, take a look at this it's saying actually this is being dominated by Gen Z. So Gen Z across the third one here you can see it says Gen Z is most likely to skip breakfast at least once per week and 70% say Gen Z is going to skip lunch at least once per week. So actually it's a generational thing.

Speaker 1: 16:02

The boomers are at the bottom of the list at 30%, and then, if you keep going down, there are certain geographic trends that we're seeing here. So in Washington DC they skip lunch more often than most other places. But in New York I'm sure our good friend Dustin Marra's over at Meal Outpost will be interested about this one free lunch equals more on-site attendance, and so if you're putting free lunch on in New York, you're gonna get people back into the office, whereas in Phoenix, arizona, the shortest lunch breaks out there. I don't know why that is. Maybe it's just too hot outside. And then when you look at this one now, meredith, last time you had a meeting on the video call around lunchtime, did you have your lunch? Were you eating your lunch?

Speaker 2: 16:47

Well, in fact, I ate breakfast on a video call right before this.

Speaker 1: 16:51

Well, unfortunately it's not very posh and supposedly now there's an etiquette thing and it says here 74% also feel that eating on an internal video call is bad etiquette, and especially so 83% if you're eating in front of external stakeholders in the mix.

Speaker 2: 17:06

I would agree with that.

Speaker 1: 17:07

I apologize, but I still did it, yeah well you know, I didn't think this was gonna be a thing, but clearly that's an issue that I will now have to try and fit in some time to eat lunch outside of my video calls, okay, well, look, that is it for this week's digital restaurant. As ever, we'd love to hear about your lunch habits. Are you having lunch often enough? What do you think of the way in which the positivity apps are gonna impact guest reviews, and are you going to be checking out the kernel when they come out near you soon with Steve Elves' latest venture? We'd love to hear from you. Put your comments below Again. Remember that five star review and until next week's digital restaurant. Thanks for listening. The Digital Restaurant podcast is available for you to follow and subscribe. Wherever you listen to your podcasts, watch us, rate us and subscribe to the Digital Restaurant on YouTube and follow along on all our social media digital restaurant channels. Thanks for listening.