Despite gains in the labor market in the U.S. with unemployment at 3.8 percent, the restaurant industry can’t hire enough workers with over 1 million available jobs. In Orlando, two beloved restaurants closed for good last November because of a shortage of workers. The same thing happened in Cody, Wyoming, in September. In Batemans Bay, Australia, Stingrays Ocean Grill shut down in January because the lack of employees meant it couldn’t serve enough diners to operate profitably. Some European authorities have even warned tourists to expect closed bars and restaurants due to chronic staff shortages.
The global shortage of skilled cooks and waitstaff has forced many to reduce their capacity to feed diners and cut into profits.
Labor shortages are a ticking time bomb for the food service industry. Vacancies have been running at record highs since the early days of the recovery, creating service shortfalls that inconvenience customers, prompt negative comments on social media, and ultimately damage businesses. This is the death spiral restaurants need to avoid.
The reasons for this crisis are well known: Most restaurant jobs don’t pay very well, the hours are long, and there is not much prospect of upward mobility. Additionally, tasks can be repetitive, customers can get cranky, and working conditions can be uncomfortable and even dangerous. With the median hourly wage of U.S. restaurant workers standing at just over $16 during a time of low unemployment and high inflation, it isn’t surprising that the industry’s average annual turnover rate is nearly 80 percent. That translates into higher costs for hiring and training that cannibalize the bottom line. The National Restaurant Association reported that 85 percent of operators said their businesses are less profitable now than in 2019.
The employment crisis isn’t just in the U.S. Taiwan once had 140,000 people working in food service; that number has dwindled to just 40,000. The National Restaurant Association’s 2023 State of the Restaurant Industry report says 79 percent of U.S. restaurant operators report difficulty hiring, and 62 percent of restaurants say they’re understaffed.
Robots to the rescue?
With no end to labor shortages in sight, now is a good time for the restaurant industry to take a fresh look at robotics. Start by discarding old assumptions about robots as noisy, clunky and obtrusive. Today’s models are quiet, efficient, and keenly aware of their surroundings. They’re even cute.
The robotics industry is now mainstream, with $26.5 billion in sales in 2022 and forecasts more than 10 percent annual growth through 2030. Venture capital investments in robotic startups doubled between 2019 and 2021. Big companies like Tesla and Amazon, and upstarts like Boston Dynamics, Figure and Apptronik have recently announced robots to handle all types of warehouse and manufacturing tasks, while the service industry is catching on quickly. Food robotics is growing faster than the overall market, with estimated 2023 sales of $2.47 billion seen more than tripling by 2033. Chipotle, IHOP, Sweetgreen, White Castle, Wendy’s, McDonald’s, Panera, and Starbucks are all deploying and/or testing with robots, and many more are experimenting with artificial intelligence-driven order-taking technology. The thousands of travelers passing through SFO daily, like I did on a recent visit, stop and marvel at the robotic arm making coffee.
Meanwhile, the cost of robots has steadily declined. While cost will vary widely based on sophistication, technology and capabilities, the average price of industrial units has dropped from about $46,000 in 2010 to a forecasted average of less than $10,900 by 2025. Leasing options can reduce the cost to less than $3,000 per year.
At those price levels, the return on investment looks compelling. Robots don’t quit, steal, or call in sick. When programmed to perform specific tasks, they execute them the same way every time, ensuring that the meal a customer enjoys today will be identical to the one they’ll eat next month or that tables are cleaned and set up according to the highest standards. In food prep scenarios, they typically operate two to three times faster than humans and can be calibrated to deliver the precise amount of ingredients to minimize waste. The fastest burger-flipping bots can serve up to 150 burgers per hour, each cooked to precisely the right temperature.
They work around the clock: Some of today’s models can operate 24-by-7 by automatically charging between tasks. Sensing technology orchestrates multiple units to do their work while staying out of the way of patrons and each other. They can be outfitted with accessories like display screens, scanners, credit card readers, and protective casings.
Happier workers, more satisfied customers
Food-service robots have mostly been used for back-of-the-house tasks like cooking and cleaning, but they are increasingly moving into customer-facing roles. Japanese catering giant Skylark Group uses robots to improve table turn rates during peak activity, reduce employees’ useless walking, and shorten table-clearing times. At Ireland’s Nevins Newfield Inn, a robot helps staff serve food and drinks, removes dirty plates, and even escorts customers to their tables so servers can focus more on enhancing the dining experience. Giovanni L. – Gelato de Luxe, a premium ice cream producer with over three hundred locations throughout Europe and the Middle East, uses robots to deliver orders to guests and bus tables. While robotics company Starship says its robots have delivered 5 million meals around the world.
Restaurant operators’ hesitancy to move digital workers to the front lines is based in part on perceptions that they make customers uneasy. Robot makers have responded by outfitting their devices with whimsical human-like features, low-profile designs, and spatial sensing technology that minimizes intrusiveness. One senior living operator reported that its robotic runner became a popular talking point for residents, many of whom even created their own pet names for the device.
Customer attitudes are also changing. Many patrons of fast-food restaurants are now comfortable placing orders via mobile devices or at self-service kiosks and taking delivery at their tables. The 17.4 million robotic vacuum cleaners expected to ship this year reinforces our comfort level with having them in our homes.
As for any lingering perceptions that robots are taking away jobs from humans, remember the US restaurant industry wants to hire 1 million workers. Many robots are doing jobs that humans don’t want—or simply can’t—do. The Bellabot can carry up to 88 pounds and deliver to 400 tables daily. Cleaning robots can sanitize kitchens and dining rooms during off-hours and mop up spills during working hours. It’s no wonder 47 percent of restaurant operators say robot cleaning will be mainstream by 2025.
The fear around robots is in part because of perceptions that they make customers uneasy. However, attitudes are changing. Robots are now familiar sights in retail environments where they roam the aisles to keep track of inventory and notify human operators of spills and other hazards. Most shoppers barely even notice them.
The $976 billion restaurant industry employs 15.5 million people and is a cornerstone of our economy, but it’s not operating anywhere near its optimal productivity. These intelligent machines aren’t taking away people’s jobs; they’re filling the jobs few people want to do. At a time of record labor shortages, that’s a relief to harried operators.
Felix Zhang is the founder and CEO of Pudu Robotics.