Chipotle (CMG) announced on Tuesday its latest venture into automation, testing an automated digital assembly line in partnership with Hyphen, a leading food service platform. This innovation aims to enhance the fulfillment of digital orders, potentially revolutionizing the fast-casual dining experience.
While an employee will continue assembling burritos, tacos, and quesadillas at the top of the line, the automated system beneath will expertly craft salads and burrito bowls. This process involves precise positioning of bowls under specified ingredients, ensuring the perfect portioning, including salsa, to maintain the ideal consistency.
Curt Garner, Chipotle’s chief customer and technology officer, emphasized the necessity of equipping crew members on the digital line for success. This initiative stems from the surge in digital sales during the pandemic. Currently, bowls and salads account for a remarkable 65% of all Chipotle digital orders. In the last quarter, digital sales contributed 38% of the total food and beverage revenue, amounting to a substantial $2.5 billion.
The collaboration of Chipotle with Hyphen, initiated in 2022, forms part of the ambitious $50 million Cultivate Next venture fund. Introduced in April 2022, this fund aims to propel growth through technological innovations and investments.
This automated assembly line complements Chipotle’s existing robotic endeavors, including Autocado, an avocado processing robot, and Chippy, a robot specialized in crafting tortilla chips. Discussions are underway to assess the synergy among these technologies, contemplating whether they will operate together or separately in restaurants. Despite these advancements, Garner emphasized the indispensable role of the human crew in the operation, highlighting the importance of technologies that enhance human experiences.
However, full automation of Chipotle’s restaurants is still on the horizon. Garner mentioned that the robotic assembly line is still “months away” from being tested in an actual restaurant setting. Once fully implemented, this scale of innovation is anticipated to come at a considerable cost to the company.
Morningstar analyst Sean Dunlop pointed out that while automation holds immense potential in the restaurant industry, the substantial cost of equipment remains a significant hurdle. This could explain why the introduction of Chippy, the tortilla chip-making robot, has been delayed. Dunlop emphasized that if the return on investment (ROI) were more substantial, we would likely have seen a wider deployment in corporate stores, similar to the Chipotlane concept.
Meanwhile, fast-casual peer Sweetgreen (SG) has witnessed early success with its automated production line and restaurant design, known as Infinite Kitchen. This innovation has yielded remarkable restaurant margins of 26%, surpassing the performance of any new restaurant opening in its first month. Sweetgreen plans to unveil a second Infinite Kitchen location in Huntington Beach, Calif., later this year, further solidifying the potential of automated systems in the fast-casual dining landscape.
Source: Yahoo Finance
