In early May, Sweetgreen opened its first automated location, in the Chicago suburb of Naperville, Illinois. After only a few weeks operating the restaurant, the salad chain is preparing to go all in on the technology to cut labor costs and improve the customer experience.
But in the early days of the automation trial, only time will tell if customers, employees and investors prefer the new way of making salads and warm bowls.
The restaurant industry has historically been slow to adapt to new technology. Eateries’ razor-thin profit margins mean most don’t want to invest in expensive technology that might not work out for their kitchens or dining rooms.
But with its so-called Infinite Kitchen, Sweetgreen joins the legion of restaurant companies incorporating automation into their businesses. Starbucks and Chipotle Mexican Grill are among the big names exploring artificial intelligence or robots. Some experiments, such as McDonald’s test of AI voice ordering for drive-thru lanes, haven’t resulted in nationwide launches.
But it looks like Sweetgreen has more faith.
“In five years, we do expect eventually all Sweetgreen stores to be automated,” CEO Jonathan Neman told investors at the William Blair Growth Stock Conference this month.
Sweetgreen plans to open a second Infinite Kitchen location later this year. The company hasn’t disclosed the location but said it will retrofit an existing location with the technology.
Why Sweetgreen chose automation
Sweetgreen jumped into automation in August 2021. Just months before it went public, the salad chain purchased Spyce for roughly $50 million, although the final valuation depends on the performance of the startup’s technology, according to regulatory filings.
Spyce was the brainchild of four MIT graduates, who founded the company in 2015. They created the robotic technology to make and serve healthy meals for an affordable price. The startup opened two restaurants in the Boston area before Sweetgreen bought it.
A month after Sweetgreen acquired Spyce, and before it closed Spyce’s restaurants, the salad chain brought a few menu items to try out in one of Spyce’s locations.
Sweetgreen then worked on how to make the robotic kitchen function for its restaurants.
“The core foundations of the IK were the same. What we focused on is making it operationally easy to interact with as a team member — to stock, to clean, to maintain. There were also some tweaks to protect food quality,” Timothy Noonan, Sweetgreen’s vice president of operations strategy and concept design, told CNBC.
The chain had to work out how to dispense goat cheese, which clumps easily, and cherry tomatoes, which could be easily squished. It also tweaked the technology to ensure consistent portions, whether for airy arugula or heavier toppings such as sunflower seeds. Sweetgreen also added the ability to rotate bowls as they move along the conveyor belt that fills dishes, ensuring even distribution of components, and the capacity to mix the ingredients together at the end.
“We have an amazing team, but it’s really hard to keep it perfectly accurate and consistent,” Neman told CNBC. “And the other amazing thing is that the peaks don’t feel crazy. It’s not like some of our stores in New York. This allows us to be there, to serve more people, and this will have it feel a lot smoother.”
After months testing the technology in the lab, Sweetgreen decided to try it out in Naperville, adding it to a new restaurant that was originally slated to be a traditional location.
“We want to understand how suburban customers interact with this,” Noonan said.
Inside the Infinite Kitchen
The exterior of Sweetgreen’s Naperville location
Source: Sweetgreen
While Sweetgreen may tout labor savings to investors, the Naperville location was designed to put a face on the finished orders.
The restaurant’s exterior features a large window that shows Sweetgreen workers preparing the ingredients that will make their way into the Infinite Kitchen’s dispensers and eventually into finished orders.
“It starts with human hands, and we have people finishing off the bowls after they’re produced by the machine, so it ends with human hands,” Noonan said.
The Naperville location displays Sweetgreen merch and drinks before customers place their orders at tablets.
Source: Sweetgreen
Upon entering the restaurant, customers pass by a display refrigerator of drinks and a rack of Sweetgreen-branded sweatshirts and t-shirts to order their food. A large digital menu board hangs above the display, flashing recommendations for new customers.
“We know that our menu for some customers can be a little overwhelming,” Noonan said.
Customers can order from one of five tablets set up in the middle of the store. If none are available, diners can order on the app instead of waiting in line. Unlike the traditional Sweetgreen restaurant, customers won’t have to wait 10 to 15 minutes to pick up mobile orders.
For now, an employee hangs around the tablets to help customers place their orders. Sweetgreen is still deciding how much of a human presence it needs during that step, Noonan said.
Behind the ordering counter is the Infinite Kitchen, which assembles customers’ salads and warm bowls.
Source: Sweetgreen
Behind the counter is the “Infinite Kitchen,” which resembles the bulk food dispensers found in some grocery stores. The dispensers hold nearly all of the ingredients to assemble customers’ warm bowls and salads.
After an order is placed, the Infinite Kitchen begins assembling the bowl, starting with dressing on the bottom. Then come the greens and the grains, followed by the rest of the selected toppings. At each stop, the bowls rotate slightly, allowing the new ingredients to go in an empty spot. The bowls glide past dispensers for ingredients they don’t need, unless a dish in front blocks their path.
The final automated step is mixing the salads or bowls. A worker waits at the end of the assembly line to add herbs, avocado and fish — all of which the Infinite Kitchen can’t add yet.
“There’s still a couple of things we have to do by hand, but we believe that the focus will allow us better accuracy,” Noonan said. “We still wanted someone to check the orders.”
The conveyor belt can hold up to 20 bowls, with room to add more if needed, and can make up to 600 bowls an hour if none need to be mixed, according to Noonan.
Even behind the scenes, the setup is deceptively simple. Stairs behind the end of the assembly line lead to a mezzanine level where the dispensers can be reloaded. Screens show if any ingredients are running low or signal any possible malfunctions, such as an overfilled dispenser.
If any dispensers stop working, the ingredients can be moved down to a different spot or added by hand at the end of the process. But overall, workers are relatively hands off in the Infinite Kitchen.
Fruits of automation’s labor
Wall Street primarily cares about automation’s ability to cut labor costs, though Sweetgreen and other restaurant chains deny it is their only motivation to explore the technology.
T.D. Cowen estimated last year that about 30% of Sweetgreen’s costs are labor, with half of its staff preparing food and the other half assembling orders. Cutting down on labor means increasing profit margins. Sweetgreen is already profitable at the restaurant level, although the company overall has yet to turn a profit.
It’s clear already that the Infinite Kitchen means fewer Sweetgreen workers in restaurants. Noonan said locations with the Infinite Kitchen can rely on roughly half the workers of a traditional location. They don’t need to beef up how many workers are scheduled for five-hour shifts to deal with the overwhelming peak periods — which only last about 90 minutes.
“Part of the beauty of this is being able to keep the same size team and let the machine absorb the peak,” Noonan said.
Employees have to set up the Infinite Kitchen in the morning, ensuring it’s well-stocked and calibrated for accurate and consistent portions. Throughout the day, workers will watch digital screens that will tell them if any dispensers are running low on ingredients or experiencing any issues. At the end of the day, employees will have to clean the system.
Sweetgreen anticipates some secondary labor benefits, as well. Workers at the Naperville location didn’t need extra training, and down the line, training for Infinite Kitchen locations should be faster.
“A big part of training in a typical restaurant involves not just training the prep processes, but figuring out how to memorize our core menu items,” Noonan said.
Neman also said that the calmer restaurant environment might mean employees stick around longer, reducing turnover, a common problem in the restaurant industry.
Customer reactions
So far, customers have barely noticed the automation, according to Noonan. He said they often think that the ordering tablets are the automated tools and mistake the Infinite Kitchen for a fridge displaying ingredients.
But it doesn’t seem like the location’s use of automation will alienate many customers. Broadly, consumers are growing more comfortable with technology in restaurants. A Deloitte survey conducted in March found that 60% of respondents reported being somewhat likely to order from a kitchen that prepares food at least partially using robotic technologies. That’s up from 54% in the consulting firm’s survey two years ago.
Buzz about the Naperville restaurant’s use of automation seems to be generating interest, although it’s too soon to tell if the crowds will still be there in a few months. Rich Shank, vice president of research and insights for Chicago-based Technomic, told CNBC that his coworkers have reported long lines during busy lunch and dinner hours. Shank is waiting for consumers’ curiosity to die down before he visits.
The changes to in-person ordering may contribute to the long lines. A traditional Sweetgreen location allows customers to make up their minds about their customized meals as they move along the assembly line, telling employees what ingredients they want. This approach usually leads to lines during busy times — but they tend to move relatively quickly.
But at Naperville, customers don’t have the same chance to look at a display of ingredients. The tablets’ format will be familiar to anyone used to Sweetgreen’s website and mobile app, but it can create a bottleneck for customers who aren’t as certain about their orders.
One Yelp reviewer said the line to order went out the door, just because it took customers several minutes to order.
“That may be the downfall of this establishment because had we walked in 5 minutes later and seen that line we would have walked past and eaten someplace else,” the customer wrote in the review.
It’s a common issue for fast-casual restaurants that have built their menus around customization, according to Shank.
“The verdict is out on whether the user interface of any sort of kiosk can solve that problem,” Shank said.
On a more basic level, customers could also realize that they want a human to assemble their orders.
“It is faster for a human to hear the customization that the customer requires and to make adjustments on the fly. The machine, at least in its present form, doesn’t sound like it’s able to handle the improvisation that often happens on the line, like ‘I don’t want that much sauce’ or ‘Can you make it extra light on the dressing?'” Shank said.
And, of course, there’s always the potential for the Infinite Kitchen’s technology to fail, despite Sweetgreen’s best efforts to eliminate errors that would take down the system. The layout of the Naperville location wasn’t created with back-up make lines that would allow employees to assemble orders by hand quickly.
Source link: https://www.cnbc.com/2023/06/24/inside-sweetgreens-first-automated-location-plans-to-take-tech-nationwide.html