AI Strategies for Smarter Restaurant Operations Balancing Automation and Human Touch

We're gonna talk about robotics, we're gonna talk about the implications for for the restaurant industry. And it probably bears mentioning that, you know, for those of us in the industry who may not necessarily know, The full width and breadth of ai. It probably helps to know that we're already using it, right? Yeah. I mean, personally it's in our phones, so that's one type of AI that we're already interfacing with.

And I know that there remains a lot of questions, so we wanted to come at it from a restaurant operators, so viewpoint.

So if you stick around we're gonna be talking about these topics and some of the things that are out there and some of the things that potentially may be out there. You know, just because people are talking about it and companies are making these particular devices, doesn't necessarily mean that they're, you know, used by a large portion of our friends in the market. So I'm really looking forward to this conversation.

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Yeah. Well, let's start off with, you know, some of the things that we were talking about before the show. Because you brought up some really good points about, you know, geez, I don't know nothing about this, and all I hear is that things are kind of going sideways with this thing, this chat sheet. Pt, you wanna talk about the conversation you had with your banker or a banker?

But talk about some of the things that we know operators maybe should be considering or, a aware of, right?

Yeah. So anyways the, banker scenario he's not my banker and I'm actually kind of glad based on what he told me, but he was talking about how they're starting to find that some of this AI is, what they're calling they're, saying it's hallucinating, that it's making up things and you know, we need to be really careful about about, you know, how we use some of the ai, whether we're using good things or not, or you know, if it's really applicable and the term that we used to use.

And it's, funny you say you used to, cause it wasn't that long ago, but that I heard first when some of this stuff started coming out was garbage in, garbage out. Right, right. Good. And good questions, good information, good data, you know, we'll produce good response and, you know, adversely the poor side of that will, do the same. But yeah, now they're, saying that there's hallucination happening. So anyway, I thought it would be good for us to.

Have some discussion about what's going on with the AI in restaurants so that we can hopefully provide some, maybe a little bit of insight about what to be aware of and what, where, maybe to lean in Mark too. Yeah.

But I wanted to start by saying I'm a big fan of this American Life podcast, and a couple weeks ago they had an episode called Greetings People of Earth. And there's a couple funny stories in there, and one of which really caught my attention was this segment by their senior editor, David Kestenbaum, who was one of the first a group of people who. Were first invited to open AI to test chat c p t. And while they were there, you know, it was an interesting concept.

And so he goes into a little bit about what chat C P T is and what they mean by generative. So the whole idea is that CHATT PT is constantly scanning two. And, in their words, guess what the next word in the word string is. So it's constantly going back and picking up another word and putting it in next without any real relation to what the other words are. So there's an, so there's a aspect of meaning that chat sheet PT does not have.

Now he also goes in and was invited to the Microsoft offices because they wanted to unveil chat sheet PT four to the same group of. Writers and scientists, and he said it was about 10 or 15 minutes before he realized that something completely different was happening. He said, fat GP, PT four, as they were watching this thing, ha now. Granted, this was when the machine was not even hooked up to the internet. So this is just all the data that's been pumped into it.

And they realized that it was forming some type of intelligence and that it understood the word before and the word after. So it was understanding that. Context of it. Now, that's Chachi beat four. There's chat three che g b t 3.5. So there's different iterations. Not only that you know, if you swing a cat around, you're going to please Pete, folks from peta. It's just a phrase, don't freak out. I'm not actually swinging a cat. But you know, you can throw a rock in any.

Any direction on the internet and find somebody who's talking about another chat, G p t plugin that you can put into your browser. One of which really interested me, which was one that would actually create email responses for you in your own, voice. Because what you do is you take some of your writing, you plug it in, and it actually generates. Responses in your voice or the way that you actually do it, which was pretty powerful. And I actually set up a couple different profiles in there.

So I've been playing around with this a lot.

But it seems to me that would be something that restaurant operators would jump onto because. No, it's nothing. You know, Yelp, another Yelp review really, that I have to reply to. Yeah. And after a while, you might have come up with all, just all the answers you can. And so to be able to write responses in your voice and the way that you would actually speak is a pretty powerful thing. And again, these are iterations that are happening. Pretty quickly because it's an exponential growth.

Yeah. Like, that's scary part of of Terminator when the Ai becomes aware. Skynet. Skynet, right. So there's a, so yeah, so it's, for me, it's kind of convoluted in all the science fiction stories that I've read. And so it's hard to piece piece out what's actually. What's actually true and what's not.

So if anybody's looking for a, quick primer on on, chat sheet, pt and this idea of machine learning or generative informational processes this American Life episode 8 0 3, greetings People of Earth is a great place to start. Cool.

Yep. The, first thing that went through my mind about the Yelp review, responding to emails type thing is what happens when there's an email or a comment that's like, You know, it's a little bit sensitive. It's, one that needs some delicacy and response. It's, you know, one that maybe we're trying to save a customer. I mean, I still think if I was running that restaurant that I would want to be the one to personally respond to it.

Of what's possible, and I just wanna kind of throw this up on the screen, is right before we came onto the show, I asked Chachi PT to create for me a menu for a middle American restaurant with short descriptions and it came up with this. I mean, you probably see this all up and down the street.

You know, it's the appetizers are corn fritters case of Fundido fried pickles chicken tortilla soup, taco salad, ribs, da So it created you know, Menus including desserts and beverages based on the information I gave it. And just to let you know, I also asked it to do a authentic Chinese menu. And it's got stuff like what it came up with is just crazy. Let me just quickly bring it up because it's worth it's worth just viewing.

And this all happened probably within gosh 30 to 40 seconds and it starts off slow and then it starts ripping. So there's dragon dragon Begin your journey with symphony of tantalizing appetizers and there's dragon breath dumplings, golden Lotus prawns Phoenix Nests, spring rolls. And I asked it for authentic Chinese. And I, I. Imperial Jade chicken, lotus Blossom honey walnut shrimp. I've never had any of these dishes, but it makes me want to get out my walk and start cooking.

So, you know, you can look at it and say, what if we said, okay, I need two seasonal dishes based on springtime ingredients in North Carolina. I mean, it's gonna help get things moving quicker. Right. And I think, you know, just one last comment on that Yelp review thing. You know there's definitely opportunity to, use this type of, product or, program to help speed things up.

Yeah, I think my, point with the Yelp comment and, again with, the menu side of things, is that, We still have to interact, we still have to be involved. Sure. My recommendation to an operator would still be, you gotta know what's going on. You gotta think about what am I asking it or what am I, when am I involved or not? But it's gonna definitely help

And the point that they're trying to make is my prediction is it is it's going to be all about authenticity. Said Peter Newland, chief Experience Officer for Gusano Group, which operates chicken sandwich chain, bird call, casual dining chains, park, burger, and homegrown tap and dough. I think the concept of, dude, this is my real soul, this is who I really am, is going to be more relevant than ever because everything's going to be so perfect.

Meaning from from an operator standpoint, and this goes back to one of our constant recommendations is that for the operators who are trying to be all things to all people, now's a great time to do a menu review and niche down, and do those things that you do really, well and forget about everything else because that is going to be the hallmark in the future.

Meaning that, I'm gonna, I wanna go out and get the best dumplings in town, and the only place I'll probably get that is at a dumpling house. And so niching down doesn't necessarily mean that you're limiting yourself, but you can get really, good and be known. And that will opt, that will. For most consumers be more important than anything else. Yeah.

Because of course, that operating system might be a little bit more simpler. There's not very rarely is there full service. And so there's places where that can really come in handy, you know. And a lot of the other articles I came up with were from companies that actually are producing these types of programs, you know, reduced diamond costs labor costs You can dial in an A one specifically to your to your operation by the data points that are available.

Yeah. But you know, to get started, they say, here's a couple things to know beforehand. You start looking to adopt AI in a practice. Know what you wanted to solve. You know, make sure you've got the right data and technologies to support your projected use case.

Have an idea of what you want for your roi. Yeah, because I, happen to think that if you become enamored with that type of technology, you could spend a ton of money, man, figure out whether you wanna build in-house team or hire a vendor and, know your budget. So there's probably some, really good advice there, because it seems like now the way some folks are talking about it, that it's all things to all people. Yeah. You know

You know, I was actually talking with them with a restaurant operator a few weeks ago. About, you know, is this something that we should automate and just turn it on and lead it? Or is this something that we're going to, you know, it's interactive and we're gonna work together with it and we can identify what challenges are and then, you know, engage with the platform and and the cool thing about what they were. Their response was, we can do whatever the business needs us to do. Correct.

If you want us to build something that's gonna just turn on and go and, use data to make decisions for you, we can do that, which could be so beneficial to an operator. But if it's, you know, the type of restaurant or owner or operator that wants to be involved and wants to learn, and then there's that opportunity for them too. And I think, you know, the, I see a lot of people and I, one of my genuine worries and concern, maybe this is making me sound.

You know, dating myself a bit, but it's, that people are just gonna turn it on and leave it and think it's gonna fix all their problems.

So I was in an operation, I was there for six years. It probably took me two years to be able to analyze the business to the point where I could. Effectively order and we changed 40% of the menu every week. So it was a constant juggle to make sure that we didn't end up with a bunch of stuff after the course of a weekend or a week. So I, think that the more it's incorporated into menu sales inventories that's gonna be a huge aid to a lot of folks.

Again, I was reading a couple articles about how many chefs are leaving. The industry now. Yeah. And there is a, they're just burnt, you know, whether they were working during the covid lockdown or not coming back and having the whole world come through your front doors you know you can handle it for a little while, un until you can't. Right. So the problem being is that unemployment is so low and there's so few people out there for a particular opening now.

A lot of restaurants and restaurant companies. By default I have to start looking at stuff like AI stuff at robotics in order to bridge that gap.

I was reminded of, you know, the Chipotle commercial of the girl with the big bowl of, guacamole, you know, spooning it. Yeah. And then this morning I came across an article where they're gonna start rolling out this smart robot called Auto Cado which, takes the same good name. Which, takes you know, two cases or three cases of avocados, cuts, it, pits, it, scoops it, dices it and saves about 50 in 50% amount of the time.

So I see things like that as becoming more and more prevalent in the industry. And not to mention that, you know a lot of, this AI technology is also getting rolled out in drive-throughs. Right. And weren't, you telling me about particular technology? Tell us about that. Yeah, so

And before the person actually even gets to the, place where they're gonna order it has already recognized if they've been there before, what they ordered last time, what you should try to sell them this time, what you should recommend, and so on and so forth.

So I can't remember the stat but it was a substantial, you know, double digit, 10, 15, something like that, percent increase that they were finding an average guest spend using a technology because you're basically, you know, you already understand what this person likes and wants and you have a chance to recommend it to them before they. You know, even get to the window. So some really cool stuff that they're

How AI could impact the future of the restaurant industry. Could question Mark fully automated drive-throughs, automated fruit food prep and I guess Chipotle also tested a robot that makes tortilla chips. And there's already on the west coast a fully automated burger joint, which is pretty interesting. Automated food delivery. And so ch GrubHub and some of these other online delivery platforms are already. Leveraging AI just in a little menu that you see, right?

Because I went on it the other day and all of a sudden it's popping up all this stuff into my face and I'm like, oh, I didn't, yeah, because I had ordered that, you know, six months ago or whatever. Yeah. So it's a powerful thing. And yet it might prove either cost prohibitive for some, for smaller organizations. It could be that, you know, if you skew a little bit older with your clientele, They're not gonna get it. Yeah, Or there, there may be a little bit a little bit tougher thing.

But Jim, what do you think about an idea of like, it being able to write a better schedule?

Because this is something you talk about a lot.

You know, you can look at all the data points like sales per labor hour of a server, or covers per labor hour of a business, or you know, percentage of sales that are upsells or, you know, whatever those different metrics are that a person might look at in terms of a, salesperson or a servers from a front of house perspective, their ability. But it's still never gonna be able to, or maybe I shouldn't say never, cuz.

You know we're, probably never's not a thing anymore, but where I see the opportunity for management to still be involved is making decisions on, okay, should I put this person in this section or shift or, you know, time of day or whatever it might be, because of the way that they interact with people. That's gonna be the hard part to, to replicate. But I think doing 90% of the schedule for sure, yeah, doing 90% of a back house schedule too. No problem.

You know, and so yeah, I think there's, lots of opportunity there

Right. And there's another phenomenon called AI phone answering. A couple reports said that 83% of customers will move on and find another restaurant if they try to call and get voicemail more than once. Yeah, 83%. So that's why a lot of restaurants are adopting technology. IPhone answering can take messages, make reservations, add a guest to the wait list, are even answer commonly asked questions.

And this is years ago, even pre pandemic, but it was saving hours and hours a week without having to have person, a person there waiting to answer the phone. There's so many different ways that we can, you know, consider using ai. And I think the, what Adam and I really wanted to make sure that everybody listening was sort of understanding was that, you know, take the dummy in the room kind of approach right?

And, really sort of sit back and think that we don't know all the answers to this stuff and, really think about what the objective is, right. The writing of the menu thing is such a good example. You know, think about what the objective is and, really go from there. So my recommendation and I, know I speak for Adam on this too, is that, you know, sample this type stuff, play around with it, get involved, ask lots of questions and, I think just don't rely on it to run the business for you.

But get involved for sure. And you know, again, we talked a little bit about a vocalized being a, resource that does really good, a really good job of getting. You know, people who want to get all the way there from an automation perspective can do that, but they, the biggest takeaway that I had from hearing Shannon from Smoothy King on the show a couple weeks ago was, I mean, this is the CMO of this company or the VP of marketing for a massive company.

And she was even talking about more involved, the onboarding is detailed, we're learning, you know, and all that kind of thing. So so much good opportunity there.

You know Stratos more Hogan and the Brooklyn Dumpling Shop. I think they have one employee that works at a time. And basically it's just to make sure that the equipment is wor working properly as far as I understand. But they're fully automating, you know, a dumpling shop like you were saying. It's funny that you reminded me, but my biggest fear is is just losing the human element of, hospitality.

Data compilation on a whiteboard and figuring stuff out and dropping it off. So it took somebody that wasn't, Frontline in the operation to sit down and get that stuff and then roll it out in a very, small scale to their franchisees to figure out what's working for them. So it might be a three to four month process before it actually sets. The other thing that I wanted to mention is, you know, when, so V came along, which was which is a cooking process by which, you know, food is bagged.

And an oxygen, less environment and then cooked in a water bath, a low temperature over a long time. I love my cv, which basically pasteurize the food. There were restaurants in, France that all of a sudden in the back of the house, it was a big pot of water, two cooks in a pair of scissors. You know, and everybody was kind of crapping all over that saying that there was something missing. And I. You know that was contradicted by the fact that they were always busy.

Yeah. Because the food, was consistent and they were doing a great job in the front of the house. So your point about hospitality is incredibly important, and that's why I've come back to that article by Nation's Restaurant News about it. Authenticity is job one for us, and it always has been, and it never will. Yeah. And so cool. AI's a AI's in the restaurant business and, is here to stay great. It's an augment, it's a tool.

It's something that we can bring to bear to better manage the overall environment, but it'll never replace authentic authenticity, creativity passion, even though I use that word very Yeah, a passion is, it can sometimes be a bad thing especially for somebody who sacrifices everything to see their passion realized. And there's plenty of chefs out there who have have. Have suffered under that.

And yeah, it maybe not treated their people as well as they could because the mission was all that really mattered. And I put my hand up and say, for a portion of my career, you know, I was that person who yeah, you know, would sacrifice almost everything to, make sure that perfect plate went out. I regret that time. I, regret the fact that I didn't early in my career understand how important the human.

Element was, and taking better care of my people because that was something that became a hallmark of mine in my later years. Yeah. So at least I smartened up flew.

Right? Maybe, and this is a whole nother conversation for another day, but just kind of in, wrap up here. Maybe one of the things that we haven't talked about is that AI is gonna allow people to focus more on people and hospitality because they're not so worried about some of that other stuff.

Because p o s companies have done a really great job at being able to produce more and more data to the point where, you know, it's paralysis by analysis. So it's sometimes a good thing can be.

Can become too much. And so there's a sweet spot where I'm getting just the information I need in order to make great business decisions. And the rest of this can get compiled in other ways. So to, to rely on the technology as, a way of making my business more profitable or or grow my business, I think is a step too far, at least this point. Agree. Cool. Yeah. Excellent conversation, Jim. So happy always so grateful to be with you as always.

And I want to thank everybody all our listeners and continue to

make turning the table, one of the highest rated restaurant podcasts in the nation, certainly in Canada. And we're grateful for the support. So please, Share the show, tell a friend, and until next week, see you. Welcome to. I did the wrong one. Thanks for joining us on this episode of Turning the Table with

me, Adam Lamb and Jim Taylor. We're on a mission to change the food and beverage industry for the better by focusing on staff mental health, physical and emotional wellbeing, by proactively measuring and managing staff workloads. Join other hospitality professionals co-creating the hashtag new hospitality culture by subscribing to our weekly newsletter at ww dot. Turning the table podcast.com/news.

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