Hospitality in the News

Every week we comb through the news to find employment trends affecting the hospitality industry so you don’t have to. This week’s hospitality in the news topic: how will automation impact ghost kitchens? 

Because of the delivery-only business model, ghost kitchens are used to operating with a skeleton crew to fulfill customers’ orders. While they may need even less staff in the future with increasing interest in robotics and automation, the opportunities for employees aren’t going to disappear entirely as Americans’ appetite for dining and carry-out remains as animated as ever. 

If used correctly, technology can even make life easier and safer for the employees who are still needed to oversee and operate the automation. 

What are ghost kitchens?

Ghost kitchens” have been dominating foodservice headlines since before the pandemic, and only grew in popularity with the need for no/low-contact delivery during COVID-19. Simply defined, ghost kitchens are food-preparation facilities with no foot traffic. There’s no seating or walk-in customers, and all meals are delivered. Orders are made online or through an app and typically delivered by a third-party service or by the ghost kitchen itself. 

A ghost kitchen doesn’t always have a restaurant brand name and multiple restaurants can rent the same kitchen for food preparation and delivery. 

Benefits for the proprietor include lower startup costs; lower labor cost, since there is no front-of-house staff; and the ability to offer multiple types of cuisine from one facility. This helps save on two of the biggest costs of starting and running a restaurant: labor and real estate. Labor costs typically range from 25% to 35% of total revenue.  

Labor is not only costly but difficult to find, especially during the “Great Resignation” following the COVID-19 pandemic. Half of restaurant operators in the full-service, quick-service and fast-casual segments expected recruitment and retention to be a top challenge in 2022, according to the National Restaurant Association’s 2022 State of the Restaurant Industry. In November 2021, a record-setting 1 million hospitality workers quit their jobs. 

About 70% of restaurant owners/operators said they lost more than $5,000 per month due to a deficit in hospitality talent while 37% lose $10,000 or more per month, according to a study by Popmenu. 

What impact could automation and AI have?

In response, operators are turning to more automation, artificial intelligence, and digital offerings in combination with traditional restaurants and ghost kitchens. According to Popmenu, 51% of restaurant owners plan to automate more online operations over the next 12 months and 41% plan to automate more on-premises operations. 

Automation and robotics can range from self-dunking fryers and automatic drink dispensers to robotic arms that can flip burgers and entire units that prepare whole pizzas with no human involvement.  

Basic robotics and AI can automate rote cooking tasks while maintaining quality and consistency. Smart ovens can use computer vision to recognize items, set temperatures and bake, according to Intel. Automatic fryers can time cooking and prevent workers from getting burned. Smart grills have multiple temperature zones and sensors so that different foods can be cooked for the right amount of time and to the correct temperature.  

And this isn’t just science fiction imaginations of a few wishful thinkers. Restaurants, including major chains such as Jack in the Box, White Castle, Chipotle, and Panera Bread, are adopting several types of robotics from companies such as Miso and Kuka into their facilities.  

Beyond ordering, food prep and delivery, ghost kitchens can have management systems that integrate information from smart appliances, sensors and cameras, Intel said. This helps the staff work more efficiently and shares data with all parts of the operation.  

AI can determine what products are selling well, with whom, and why. It can mix and match menu items to create personalized menus for individuals based on their order history, location and more, according to Intel. These skills and extra benefits are particularly important for ghost kitchens, where many A/B test menus and adjust offerings in real time. 

In a ghost kitchen system, back-of-house data staffing, inventory and trends can be integrated and analyzed with AI, Intel said. This can help the kitchens make better day-to-day decisions and identify issues before they interfere with production. 

Will automation remove the need for human employees?

Automation, robotics, and AI don’t automatically mean complete elimination of actual employees. Used in the right way, technology can work harmoniously with physical staff and improve the work environment. 

For example, many ghost kitchens are using AI to make jobs more fulfilling. This includes using AI to fill out forms, update records, and handle transactions. Taking these tedious – but essential – tasks away from management and staff frees them up to focus on the food and work environment. 

Not everyone and everything can be replaced with a robot, and studies show restaurants are still hiring. According to the National Restaurant Association, 75% of operators said they plan to devote more resources to recruiting and retaining employees in 2022. 

Robotics can elevate the role of a server who can handle more tables since guests can use their smartphones to access menus, order, and pay. Freeing staff from order taking and money collecting frees them up for more meaningful connections in the dining room. Diners appreciate technology, but they still want a human connection with their meal. 

Happier guests typically have higher average order values and tip higher. According to Ready, an integrated mobile self-order and payment technology, restaurants with guest-focused technology have tips 26% higher than traditional service models. Not only that, but the same report shows that balancing technology so that it meets the demands of customers and the needs of employees can improve the overall dining experience for both.