More robots are coming to Chipotle (CMG), and one could assemble your burrito bowl in the future.
On Tuesday, the burrito chain announced it is testing an automated digital assembly line in partnership with Hyphen, a food service platform, to fulfill digital orders.
On top of the line, an employee will continue to fulfill orders by assembling burritos, tacos, or quesadillas. But underneath, the line will create salads and burrito bowls by positioning bowls under each specified ingredient and portioning them out (with the right amount of salsa so as to not make it too saucy).
Chipotle’s chief customer and technology officer Curt Garner told Yahoo Finance that as digital sales growth picked up during the pandemic, the team realized it was time to figure out “how to set up the crew members on the digital line to be successful.”
Now, bowls and salads account for 65% of all Chipotle digital orders. Last quarter, digital sales made up 38% of total food and beverage revenue, which came in at $2.5 billion.
The company began working with Hyphen in 2022, and the burrito bowl invention is part of a larger $50 million dollar venture fund, Cultivate Next, which was introduced in April 2022 to accelerate growth through innovation and technology investments.
The team is having active discussions on “how many of these technologies are complementary to one another,” Garner said, and whether they’ll all be at one restaurant or separate. But at the end of the day, Garner emphasized that the crew is crucial to the operation.
“The best solutions for restaurants and guests are those that have a co-pilot or are co-biotic in nature,” he said. “It’s about capabilities that improve human experiences.”
Still, Chipotle isn’t quite ready to fully automate its restaurants. Garner said that the robotic assembly line is still “months away” from being tested in a restaurant.
When fully rolled out, though, this sort of innovation at a large scale will likely come at a cost to the company.
“There’s certainly a lot of potential for automation in the restaurant space, the issue that you run into is a lot of this equipment is really expensive,” Morningstar analyst Sean Dunlop told Yahoo Finance over the phone.
Dunlop said that may be why we haven’t seen Chippy get rolled out yet.
“For perspective, Chipotle has been working Chippy through its stage gate process for the better part of a couple of years,” Dunlop said. “If the return on investment (ROI) were really there and meaningful, we would see this rolled out to corporate stores already like we have with Chipotlane.”
In the background, its fast-casual peer, Sweetgreen (SG), is seeing early success with its first automated production line and restaurant design, dubbed Infinite Kitchen, which has brought in restaurant margins of 26%, significantly higher than any new restaurant opening in its first month at the company.
Sweetgreen plans to open a second Infinite Kitchen location in Huntington Beach, Calif., later this year.
Source : Yahoo