Digital Restaurants and Delivery Tech: The Future of Hospitality

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Digital Restaurants and Delivery Tech: The Future of Hospitality

By Michal Christine Escobar, Managing Editor - 05/31/2017
During a presentation at the 2017 National Restaurant Association Show, Cicely Simpson, executive vice president government affairs & policy, National Restaurant Association and Anna Tauzin, vice president, marketing and innovation, Texas Restaurant Association, discussed the rise of digital restaurants and how third party delivery services will soon include drones and robots.
 
According to Tauzin, digital restaurants are a rising trend within the restaurant industry. Digital restaurants do not have a physical storefront where guests can eat. Instead, it operates under a delivery only business model and typically uses one or more third-party delivery companies instead of its own staff. Why is this business model becoming so much more popular?
 
For one thing, cost efficiencies. The rent for a basement kitchen without a dining area in New York City will be much lower than a storefront. Additionally, there is a cost savings on labor. Digital restaurants employ a reduced staff which can be better trained. Additionally, this staff can be used cross-functionally. Case in point: the Green Summit Group in Manhattan. Green Summit Group, run Peter Schatzberg and Todd Millman, is a startup that launched in 2013. It runs nine different restaurant concepts out of one kitchen. Each restaurant concept offers different branding and food choices. Green Summit has raised $3.6 million since its launch and is projecting about $18 million in sales this year across all of its locations. The concept has been so successful that Green Summit expanded to Chicago and is planning to expand to London, Houston and Colorado within the next year.
 
As a delivery-only concept, digital restaurants and their third-party delivery service partners, will likely be on the cutting edge of delivery technology. Right now, that entails robotic and drone delivery. Robotics companies are exploring partnerships to gain entry into the foodservice space. For example, Starship Technologies, recently partnered with Postmates to deliver food, and Marble, partnered with Yelp Eat24. Both companies are now delivering food in cities such as Washington, D.C. and San Francisco. For drone delivery, Flirtey and Matternet are currently active in the space. In fact, Flirtey has worked with Dominos to deliver pizzas in New Zealand via drone and slurpees from 7-11 to Nevada residents.
 
This digital shift is happening so quickly, that the federal government is finding it difficult to keep up with the lightning quick evolution of technology, Simpson says. Government agencies, especially the department of transportation, is trying to figure out how to regulate drone deliveries. They're asking questions such as: Who is responsible for regulating it? How should it be regulated? How can the government distinguish between an individual with a drone and a business using a drone for delivery? Who has jurisdiction to enforce regulations?
 
"This is a very active conversations within Washington right now," Simpson notes. While consumers and restaurateurs are evolving and technology is evolving with them, the government continues to fight with itself."