Yahoo Finance The AI game: Chipotle, McDonald's, Yum! Brands all lean in
AI tech is being embraced by everyone, everywhere, it seems, in the food business.
Chipotle (CMG) said automation or AI is something the burrito chain is looking into and how it can help employees with certain tasks. McDonald's (MCD) has hinted at a new digital enhancement that allows employees to know when a customer is nearby so they can begin prepping their food. Even execs from the big soft drink and snack makers — The Coca-Cola Co. (KO) and PepsiCo (PEP) — have weighed in.
But the fast-fooders have been the real players. Here's a pocket guide to some innovations — and a few yellow flags as well:
Chipotle
In a call with investors, CEO Brian Niccol said the fast-casual chain has discussed the idea of AI internally.
"We've worked with a lot of our employees to identify what are the tasks that they would love to see us bring automation to, or AI, so that hopefully, the role can become less complicated...I think there's just other places in the back of the restaurant where we have the ability to automate, whether it's on the digital make-line or other tasks..."
For instance, last fall Chipotle rolled out testing for a new kitchen management system to streamline operations, plus a new robot called Chippy that makes tortilla chips.
Then, in an interview with Yahoo Finance on Wednesday, Chipotle CFO Jack Hartung said AI presents "endless possibilities" that it is exploring with its Cultivate Next fund. This new venture is intended to invest in "forward-thinking ventures that are looking to drive meaningful change at scale [and] will help accelerate Chipotle's aggressive growth plans," per the release.
Hartung warned, though, "there's also a lot of pitfalls as well, so we want to be very careful, very thoughtful."
He added: "Certainly, if there's ways we can make the job that our crews, do the jobs that our support staff do to support a restaurant easier, better and if the end result is we can run better restaurants and serve the customers in a better way, we're certainly going to look at any technology."
McDonald's
Is McDonald's a frontrunner in the AI game?
In late 2021, McDonald's teamed up with IBM (IBM) to "further accelerate the development and deployment" of its automated voice ordering technology. As part of that, IBM acquired McD Tech Labs, an innovation hub created after McDonald's acquired Apprente in 2019.
All these investments are part of its larger growth strategy called Accelerating the Arches 2.0.
There's a bump in the road: consumer concern. Earlier this year, customers took to TikTok to share their issues with the service, such as accidentally placing nine sweet teas in an order. Meanwhile, McDonald's Australia received attention earlier this week when Gold Coast influencer Jasmine Hand felt "exposed" over a kiosk from having a personalized welcome message.
Wingstop
Wingstop (WING) partnered with AI voice startup ConverseNow in March. As part of that, the fast food chain is running a pilot where a voice AI-powered virtual assistant will take customers' phone orders at select locations. ConverseNow contended this system will boost the brand's "labor, guest experience, and operational efficiency..."
YUM! Brands
Yum! Brands (YUM) is using AI and machine learning to predict how much food is needed at its nearly 3,000 U.S. stores, which include the brands Taco Bell and KFC.
Recommended ordering "predicts and recommends the quantity of product for a restaurant manager to order each week with the goal of reducing product waste and intra-store transfers of inventory," CFO Chris Turner said in Yum! Brands Q4 2022 results.
It's also using AI technology to predict the correct amount of food — and timing — to cook products according to customer demand. Welcome to "Cook Schedule."
The company also rolled out Tictuk in 2022, an online ordering system via chat, which is now used in over 3,200 locations across 49 markets.
"We processed millions of digital orders in 2022, with Tictuk continuing to prove it can bring in incremental customers and drive digital sales. This is evidenced by the chat ordering launch in KFC Mexico, where more than 90% of users who transacted on the chat channel had previously not placed a digital order on other channels," Turner said.
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Brooke DiPalma is a reporter for Yahoo Finance. Follow her on Twitter at @BrookeDiPalma or email her at bdipalma@yahoofinance.com.
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