Happy Friday!

3 Numbers

218

Number of franchised KFCs in the U.K. and Ireland to be purchased by Yum Brands’ corporate KFC division. Terms of the deal were not discussed, but the company says that the acquisition “represents a significant opportunity to accelerate KFC’s growth strategy in the large and growing UK and Ireland chicken market.” (More to come in the newsletter on chicken’s global takeover.)

$29

New guaranteed hourly rate (excluding tips) for our nation’s most agile cyclists — DoorDash couriers in New York — “following a judge’s dismissal last week of an appeal filed by third-party delivery companies to overturn a delivery driver minimum wage law.” DoorDash says an unspecified fee hike for customers is forthcoming.

31.7%

Visit increase for Starbucks on Red Cup Day, according to Placer.AI data. Perhaps due to union walkouts or a less festive customer base, foot traffic was down from 2022 and 2021, when the company saw 81% and 65% increases, respectively.

I, for one, welcome our new robot overlords

Some companies will come and go. The technology will progress in fits and starts. But one thing is fairly clear at this point — partly or wholly mechanized restaurants are coming, on a wide scale, probably sooner than we think. From Wednesday, via Restaurant Technology News:

And from the Spoon, late last week:

And from Food on Demand, two weeks ago:

The total impact these stories have had on the public? Basically none! Which, paradoxically, may be the best sign yet that robotic adaptation is accelerating.

After years now of seeing restaurant robotics go through wild hype swings, about six months ago I detected what I can only classify as a vibe shift. Automation is now talked about within the industry more soberly. The consensus thinking goes like this: while it may not be adopted by all restaurants, and its timeline for mass adoption is still up in the air, make no mistake — it’s inevitable.

Meanwhile, outside the industry, news about robotic advances — news which would have been huge five years ago — is barely making a ripple:

This shift roughly began when Sweetgreen unveiled its Infinite Kitchen, a product that represented the culmination of the chain’s 2021 acquisition of the robotics company Spyce. At the first location outside of Chicago, staff members bag up food and help guide customers through their orders, but otherwise the real bones of the operation is powered by a large robotic makeline, situated behind the store’s counter. It can make up to 500 bowls an hour.

Despite ample coverage in the business and industry press, the news about the store didn’t really go mainstream. There were no breathless editorials or 60 Minutes pieces about what the Infinite Kitchen means for the future of labor. The store just … opened, customers were fine with it, and 6 months later CEO Jonathan Neman said that its margins were 26% and the company was opening 7-9 Infinite Kitchens in 2024, with plans to ultimately incorporate the automated makeline in all locations over the next five years.

This was all a big deal! One of the world’s 30 most valuable restaurant chains (by market cap) announced that all of its restaurants would one day soon be automated. And this wasn’t a starry-eyed prediction: the Infinite Kitchen is the foundation for Sweetgreen’s growth strategy moving forward. “A lot of other companies are trying to figure out how to add automation to their experience and are not willing to start over,” Neman told the Wall Street Journal in October. “I’m willing to blow the whole thing up.”

Meanwhile the world’s second most-valuable restaurant chain, Chipotle, has two big automation tests in the works. The first — a Miso Robotics-made robot called Chippy — is in a California restaurant. The second — an automated makeline for digital orders — is being tested at HQ. Again, this news has been treated with curiosity by the broader public, but it hasn’t exactly set the world on fire.

And over at the Golden Arches, CEO Chris Kempczinski opened the door this week for a more automated McDonald’s, telling Restaurant Business, “With the price of labor increasing, the break-even [of robotics] is getting closer and closer. It’s something you continue to look at.”

While this wasn’t exactly a sign that we’ll see a robotic Grimace manning the fry station anytime soon, it did represent a marked change of tune for Kempczinski, who said 18 months ago that the economics of automation “don’t pencil out.”

Other than cost, the biggest barrier to entry for robotics has long been a fear that customers would be repelled by heavily automated stores. Surveys have shown that people have mixed feelings on their food being cooked by a robot.

But now advances are happening which would have seemed miraculous a few years ago, and it’s becoming increasingly clear that a lot of food is about to be made by robots. And the most surprising thing is how little anyone is surprised by it.

Popeyes plots world takeover

Popeyes: burgeoning international juggernaut.

The company now operates nearly 1,400 restaurants outside the U.S. — up 30% for the year — and has no plans of stopping. In just France, 300 restaurants are planned over the decade, and the company sees large swaths of white space to grow in Asia.

Aggressive international expansion makes sense. It’s been said that a love of music is one thing all cultures share; so, perhaps, is a taste for fried chicken. KFC has paved the way, opening stores in nearly 150 countries and, over the past three decades, adding nearly 8,000 units in China alone. (A fun game to play is to look at this world map of KFC outlets and try to name the countries that don’t have a KFC.)

Meanwhile, Chick-fil-A announced this year that it’ll be pouring $1 billion into an expansion plan in Europe and Asia.

One benefit of Popeyes quick international expansion is that its stores are shiny and new and really efficient, with modern equipment and production methods. RBI executive chairman Patrick Doyle said this week that Popeyes’ U.S. division will begin learning from their overseas cousins and mirroring best practices. From Restaurant Business:

All that international growth has contributed to back-to-back years of 40% systemwide growth. Which is perhaps unsustainable. As Doyle said this week, “If we can keep going 40% a year I think in 10 years we’re bigger than the entire global economy.”  

Quick Hits

• CNBC reports that Panera has confidentially filed to go public again. In May, the company hired new CEO José Alberto Dueñas as part of “preparations for an eventual IPO.” Panera was taken private by JAB in 2017 at a $7.5 billion valuation.

• “The golden era of restaurant worker wage growth is over.”

• Here’s a story about a judge using some real out-of-the-box thinking: “A woman who threw a bowl of hot food in the face of a Chipotle worker has been sentenced to a month in jail — and two months working a fast food job.”

• Cracker Barrel announced its Q1 earnings last week — sales and traffic dipped 0.5% and 7%, respectively, but the company did say guests counts improved month-over-month as guests responded positively to marketing efforts and a new loyalty program. (Solid hire, here: Dolly Parton is the new loyalty ambassador.)

• Hedge fund fight! Reuters reports that hedge fund Blackwells Capital is planning an activist campaign against Wendy’s, whose board includes three representatives from Nelson Peltz’s Trian Fund Management. The two funds appear to already have a beautiful friendship: last month, Blackwells issued a press release calling on Trian to end its “misguided and ego-driven campaign to seek board representation at Disney.”

• A match made in Millennial Heaven: grocer/restaurant brands Foxtrot and Dom’s are merging.

• And finally, a smorgasbord of McDonald’s stories from the week:

  • The chain officially opened its CosMc’s prototype today. The menu features a Creamy Avocado Tomatillo sandwich, another topped with Spicy Queso, and all the way from McDonald’s of Spain… chocolate and hazelnut-filled MCPOPS. (In case you missed it, last week the newsletter covered what the concept might mean for both McDonald’s and drive-thru beverage restaurants.)

  • At an investor presentation on Wednesday, the company gave some details on immediate expansion plans for CosMc’s, announcing 9 locations to be opened next year in the San Antonio and DFW metro areas.

  • McDonald’s is also creating an AI chatbot for its employees, plans on adding 9,000 new restaurants over the next three years, and is bringing back the Snack Wrap. CEO Chris Kempczinski right now.

Name That Chain!

You get three guesses to name this week’s mystery chain:

• Its first location opened across the street from an American martial landmark.

• The chain has a different, “stately” brand name outside the U.S.

• Incredibly, this chain sponsored a world-champion chess tournament for 14 years.

Stay tuned… the answer will be in next week’s email.

Last issue’s answer: Smoothie King (New Orleans Pelicans), Hard Rock Cafe (Miami Dolphins), Little Caesars (Detroit Red Wings and Pistons)

#Content Recs

• A Chick-fil-A recruiter gives 6 useful tips for hiring friendly employees. One tip: create something like a speed-run apprentice program, offering people the chance to work for a day before they apply.

• How five different chains, including Chipotle, Shake Shack, and Jack in the Box, are preparing for California’s minimum wage increase to $20 an hour.

• Fascinating Eater video on chef Helen Nguyen, who butchers her own meat as part of a quest to make a perfect bowl of pho.

• Amateur chef @lazypotnoodle cooks grilled cheese and tomato soup — from scratch! — on a dorm-room bed.

  • By the way, a small victory lap here: the newsletter covered this account when it had a few thousand views. Videos are now getting over a million hits each, and Gordon Ramsey is a fan. Here’s what I said back in August: “Details on the creator are pretty scant — all I know is that he (I think) is a college student who cooks complex, gourmet meals on a plug-in electric pot, all while sitting on what must be the world’s most crumb-filled dorm bed…. Suffice it to say, this guy is either going to have a Netflix show in 6 months or be arrested. There’s no in between.”

International Corner!

In an attempt to spur the imaginations of fast-food R&D departments across America — each week I’ll highlight an international item that should warrant at least some menu consideration in the States.

This week: FANCY SAUCES AT MCDONALD’S JAPAN

From Brand Eating:

By the way, you can get an order of 15 McNuggets with Black Truffle sauce for 490 yen, which is roughly… $3.40. Should everyone be planning a trip to Japan?