Which restaurants are winning through the labor crisis?
All these headlines and more represent our thoughts and views on the world of restaurants, technology and off premise food in our round up of the last week’s hot news stories - subscribe today to the Monday Minute and register at www.learn.delivery for more bonus content.
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TRANSCRIPT
Carl: AI telephone, ordering Brinker's virtual brand sales performance, and which restaurants are winning through the labor crisis. That's all ahead on this week's Monday Minute.
Monday Minute works like this. We're going to ask each other five questions about headlines that have caught our attention about the worlds of restaurants off-premise and technology that in some way, relate back to our book, Delivering the Digital Restaurant. Are you ready? Let's go.
Meredith: First question is for you this week. Carl QSR magazine has put out NPS scores for labor. And first I just must say as a Bainie, I love the NPS. For those of you who weren't at bay, you might wonder what is the NPS? It is the net promoter score. And it takes all the people who love you and subtracts out [00:01:00] all the people who hate you and the net of those is your score and people who are just like, eh, in between: not a great place to be. QSR asked this of the labor, which is super interesting. And what stood out in the report that came out?
Carl: Yeah, this is an excellent article by Danny Klein of QSR. Let's start on some industry information here Meredith first of all, about in June of this year, there were 1.3 million job openings in the accommodation and food services field, and just over a million hires.
And there were 918,000 separations. So. Why do I share that? Well, the labor crisis continues One of the quotes from Danny was restaurants have fewer workers to pick from and smaller staffs to operate with. Right? So the point is this continues on. Now in the article, it's very much centered around a company called William Blair equity research consumer group that has looked at the employee satisfaction scores from 350,000 Glassdoor reviews which is important because it doesn't necessarily suggest that the company has revealed certain information. And there's a lot of stuff in there about pay that might not indeed be accurate, but it does cover across about 90 or so different concepts. Headlines - satisfaction has dropped versus 2021, but employee satisfaction is still above where it was
in 2019, about 36% higher and across most of the categories. And I'm going to touch on those categories in, in a moment or two. Cause I think they're really important here. One of those categories was diversity and inclusion, which has risen 26% in a year, which I think is great.
Another quote from Danny - "corporate purpose is no longer a perk. It's a core vital that employees take the temperature off before signing up." Love that I couldn't agree more with what Danny says. But let's do this. Let me bring this up here first of all, because as you rightly say about NPS. What this is trying to do is talk about the percentage of employees who would recommend their job to a friend.
And so have a look at this list here In-N-Out by far are the company that has been recognized and they have been recognized now at the [00:03:00] top of this list for the last seven years, it's the only brand that has maintained its presence in the top 10, since 2016. Although I will tell you, it has been a slightly dropping - I think in 2019, it was something like 93%. Now reasons why.
Let's look into some of these other things here. Let me just make this a bit bigger, cause I know your, I know your eyes aren't good these days Meredith, so let's help you out a bit.
Here we go. OK, good. So they do this for QSR, but they also do it for fast casual. They do it for specialty and casual dining. So you'll see In-N-Out burger here for the overall employee rating, Chick-fil-A also does pretty well, but everyone else is pretty much in this kind of middle zone here.
So what kind of goes into this well, culture and values in an out 4.4 senior management four work life balance 3.8. Compensation benefits way above. They are obviously based in California. so their average pay rate is typically higher than what you'll see across the rest of the US. And then career opportunities are 4.3 and then similarly, 4.3 on diversity & inclusion.
Now I, I share that really, because those categories I think are really important to think about because they, in many ways are the ways in which restaurants now can distinguish themselves from others. You know, when you look at fast casual, Raising Canes on four of those seven measures, Dutch Bros beat out Starbucks.
When you look at that, it's pretty much across most of those categories where you see a lot of those companies really stand out. By the way Snooze am. And Cooper's Hawk stood out on casual dining. So HR leaders, operational leaders -equate the cost of turnover. Consider that cost on an annual basis.
Look at what you can do to, to invest in those types of things, the programs, the education, the benefits, the culture, by the way, the biggest growth wasn't in wages. It wasn't something which has improved, but it wasn't wages alone that really was the thing that made the difference as to why people were recommending the likes of In-N-Out
This is great to be able to identify restaurants that are succeed in, in this space and hopefully addressing some of the turnover numbers. To give you an idea, Dutch Bros, as I mentioned, [00:05:00] their turnover is 66% - way better than the industry average. They had 64,000 people apply for their 603 stores and hired about 3500 of them.
And in Q2, I think turnover was low double digits.
Meredith: Yeah. Those stats are remarkable because that is the natural question does getting a higher score, lead to lower turnover, numbers, lead to more applications, better outcomes in your hiring.
And at least with that one example that you gave that is certainly the case.
Carl: Absolutely. Okay. Second question this week we were looking through some earnings reports and Brinker stood out. Tell us about what they were saying on virtual brands in particular.
Meredith: Virtual brands now make up 6% of Brinker sales, which is quite a number. to give some perspective to that if you were to launch a limited time offer in the restaurant industry, you would be pretty happy if it did 5% of your sales. They've now got some brands that have been out there for a while. They're they're not necessarily even something that's new news and they're still mixing at six percent which [00:06:00] is amazing.
Now the downside of that they go into detail in the earnings report, is that, mm, maybe they need to redesign them a little bit. I, I would say not redesign is a strong word. They need to tweak them a little bit to make sure that the virtual brands are not bringing in too many unique ingredients.
They're not stressing at certain stations and that truly they are incremental to the base business and the way that they're making use of what's already there in the kitchen and the excess capacity that they may have. So they talked a lot about that. And then also the fact that they need to make sure that they continue to focus on the core brand because it is doing quite a bit more in delivery and take out sales than the virtual brands are. So not forgetting that they have a great core brand there. The virtual brands really are meant to create incremental sales on top of volume that you're already doing. It is meant to be something that is easy for your kitchen to execute on and [00:07:00] bring additional sales, but not be the business itself. there are few and far between out there of examples, I can think of like Clustertruck and Byte to Bite who have made a business of virtual brands. But most people it's just riding along the top there and contributing to the business, but not defining the business.
Carl: Yeah, I think it's gonna be really interesting as casual dining kind of returns through the course of this year, as we're seeing how it copes with the excess capacity, it once thought it had and what that means for quality of those virtual brands and the execution of them.
Meredith: That's right. All right. This next one, I had to ask you what these words even meant, because I am not a Facebook user. I confess . So, you might have to give background to some of our listeners too, as you know, the Facebook average age has gone up. So we might have some younguns out there who don't know what you're talking about. DoorDash has recently done an agreement with Facebook Marketplace to deliver the product bought and [00:08:00] sold on the marketplace. Tell us about that.
Carl: I don't what you mean. Facebook is definitely your space, unless you are in the MySpace era and you just gave up then. You, you're definitely not a TikToker. I know that much.
Meredith: That is true.
Carl: I was going to start by asking, have you ever sold anything on Facebook marketplace? No, clearly, clearly not.
Imagine a zone where people can sell stuff from their home to other people. And the marketplace is like a competitor to eBay for all intents and purposes. So what, what have DoorDash done here? Well they've offered up their logistics, right? It's always the most annoying thing. When you try and sell something on eBay, you've got it to a local neighbor or on Next door.
Well, now they're saying - as long as it can fit in the trunk of your car. As long as the person is only 15 miles away, the purchaser from the seller. And as long as they can wait up to 48 hours, then Doordash will support Facebook marketplace. It's not clear where it's been offered yet. They're not actually revealing which cities they're doing this in.
But this is similar to what Uber did with Mercari, the resale marketplace last year. And again, it comes back to what we've been touching [00:09:00] on pretty much all the way through this year. Around what the marketplaces are doing to expand the utilization of their delivery fleet. Specifically in this example, I'd suggest for off peak periods.
And in that sense, it's a win-win all round because I think meta has been struggling with some of its sales, certainly from an advertising perspective. So I suspect [Facebook] marketplace will get a bit of a boost by having some of Doordash's logistics capability here.
Meredith: Yeah. As Brandon Barton said in one of my recent favorite quotes from him on LinkedIn, it was for those in the back row: it turns out the DoorDash is a logistics company. And I think that just further proves that we think of them for restaurants, but they're doing a heck of a lot more than that.
Carl: Right. This question is definitely up your street because telephone ordering, as we know, is still a huge part of off-premise, but your husband's also involved in artificial intelligence.
So the question to you, is will tech, will artificial intelligence, will the human voice be removed from telephone ordering?
Meredith: Yeah. [00:10:00] I think when you first see this title, those of us who are a little bit older, tend to think of calling the bank in like the early nineties and getting the IVR and being so frustrated.
Like, no, that's not what I said, listen to me. I want option four and imagining trying to order food through an interface like that seems impossible, right? Like I don't want pickles add more cheese. how is it ever gonna figure that. Well, technology has changed a lot in the intervening years and the ability of computers to understand it's what's called natural language understanding to be able to, I would say it as the computer understanding how a human speaks, rather than requiring the human to speak the way a computer understands.
It's just leaps and bounds forward from where it's been. And as a result, I think technology is going to play a huge role in ordering whether it's people who still pick up the phone and call the pizza place, which I did last night, [00:11:00] or it could be, gosh, I'm driving. I can't type in on the app what it is that I want to order. I want to be able to talk to my car and say, Hey, get me this, that, and the other thing. That will absolutely happen. It is easier to talk into a computer than to type as my six year old son can tell you, he texts his cousins and his aunts and uncles all the time, all through voice.
So as these things become much more commonplace, I think we will be ordering this way a lot and not just to replace those phone orders, but also to replace what we're currently doing with our thumbs.
All right, last one. I'm going to mispronounce this one. Carl, Precitaste? got 24 million in series A funding. We always like to celebrate good news. Correct my pronunciation please. And tell us what that's all about.
Carl: Good try. I'm going go with Preci-taste because I think it's a, a play on precise and taste - who knows we'll find out whether someone will correct us I'm sure in the comments, but you're right. This is another bit of good news in a time where the, the [00:12:00] money is tightening up. This is another great example of a concept that is clearly getting some success and has been around for a while.
The company actually was founded in 2012, would you believe? And today they've got 1500 restaurants on their platform. They're tracking 19,000 meals, every five minutes specifically in the fast casual and QSR space. They're also working with , in store baking processes for one of Europe's largest grocery retailers.
So what are they doing exactly I guess is your next question] here, right? Well, They're help with addressing food waste in particular because they develop a forecast, supply and demand like many platforms do these days, whether it be employee scheduling or other types of platforms, and it's helping the employees understand how many items to prep in advance.
And in that sense, there's a number of bits of technology involved. It's, it's observing the crews that are in the, in the back, it's generating a level of AI information to help assist the team live on site. And then it's really around just being able to have cameras, [00:13:00] monitor the ability of how things are being done on a consistent basis, because yes, it's saving on food waste, but it's also helping on order accuracy.
And that obviously also supports the ability for the demand based forecast that comes out of this as well. And they're saying up to 40% of the kitchen tasks are consolidated which is absolutely great, and the company reports they're able to serve customers five times faster. Excellent piece of technology.
I'd love to see it live at some point. You can certainly see why this makes sense, right. And we'll see where they decide to scale further from this point forwards, cause it's been bootstrapped up to this point. I think we've been saying this term quite a bit this year Meredith and that is slow and steady wins the race.
And maybe that's the case for this AI software provider.
Meredith: One of the funnest things in the story is what you said about them being founded in 2012 and having 1500 customers. They are clearly taking a much more patient approach at building this than dumping money and trying to acquire as many customers as quickly as possible.
So I'm excited to see what they do.
Carl: Alrighty, well that is it for this week's Monday Minute. As ever Meredith and I would love to hear from you. What do you agree with, what do you disagree with? What comments do you have about what we've shared this week and perhaps what would you like us to cover in a future edition?
But until next time, thanks, for listening.
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