Robots are making salad bowls and delivering burgers as Sweetgreen, Chipotle, Shake Shack lean into automation
With consumers craving shorter wait times and more affordable prices, food chains are introducing futuristic technology to combat labor inflation.
From Sweetgreen (SG) and Chipotle (CMG) to White Castle and Shake Shack (SHAK), robots are prepping salads, making burrito bowls, and delivering burgers.
"You can now get a Sweetgreen meal in about three and a half minutes ... perfectly portioned, and the food quality is even better," Sweetgreen CEO Jonathan Neman said of the company's Infinite Kitchen pilot stores, which use a row of automated dispensers to create the salad bowls.
The first pilot location opened in Illinois in May 2023, and the company now has three Infinite Kitchens. It plans to open seven more and retrofit two to three restaurants this year.
At its New York Penn Plaza location, the robot showed the potential to reach 500 bowls per hour. The pilot stores typically need a third of the employees of regular stores, and the drop in manual tasks has resulted in a 45% reduction in turnover, Neman said.
In a note to clients, JPMorgan analyst Rahul Krotthapalli said benefits like faster serving time, better order accuracy, and higher labor retention allow the company to reinvest profits into employees, menu innovation, lower price points, and shareholder returns.
Chipotle introduced Chippy, a tortilla-making robot, back in 2022. But it "didn't pan out the way we thought it would," former CEO Brian Niccol, who recently got tapped to lead Starbucks, told Yahoo Finance.
That led to its latest robotic innovation, Autocado, which peels and cores avocados for guacamole. Launched in July 2023, it's now in its third iteration.
Last October, Chipotle also introduced a digital makeline, where a burrito bowl or salad travels along a conveyor belt while each ingredient is automatically dispensed into the bowl.
Niccol told investors both innovations are "making their way through final checks ahead of being pilot tested in their first restaurant."
White Castle first introduced a robotic assistant, Flippy, which automatically fills the fryer basket with potatoes, dunks them in oil, and then removes the fries. The chain has since upgraded to Flippy 2, which is currently being tested in 18 restaurants.
A spokesperson said being "smaller and family-owned" allows the company to learn and improve the robot in real time.
The automated fryer is being developed with Miso Robotics. Its CEO, Rich Hull, said earlier this year that robots will be the future of fast food.
"When you do the economics of paying somebody $20 an hour to work on the fry station, it doesn't work," Hull told ICR Conference attendees. "Either restaurants are going to automate the worst parts of working in a commercial kitchen in order to make the economics ... [or] you can start to close locations."
Hull argued workers can be transferred to "higher-value position[s]" to "justify paying that higher minimum wage" in California, where a new fast food wage law went into effect on April 1.
"Automation remains a key theme in the fast casual and QSR industry as labor costs continue to be the largest fixed cost item going forward with more regulatory risk likely underway," Krotthapalli wrote.
And Shake Shack (SHAK) recently teamed up with Serve Robotics (SERV) to deliver its Uber Eats (UBER) orders using autonomous delivery robots in Los Angeles.
Serve Robotics CEO Ali Kashani told Yahoo Finance its robots are beating out their human counterparts.
"Our robots complete deliveries at a higher rate than human couriers by a wide margin. We perform up to 99.94% of our deliveries. That's significantly better than human couriers already," Kashani said.
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Brooke DiPalma is a senior reporter for Yahoo Finance. Follow her on Twitter at @BrookeDiPalma or email her at bdipalma@yahoofinance.com.