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Vending machine pizza and robotic coffee: Pandemic accelerates automation

Screen-Shot-2019-12-13-at-9.02.24-AM-300x209When the founders of PizzaForno began rolling out automated, around-the-clock pizza ovens in Canada, they spent months perfecting recipes.

“We anticipated the No. 1 challenge we were going to have was convincing consumers that they could get a great quality, artisanal pizza out of a machine,” says president and co-founder Les Tomlin.

While it started out slow, he says interest has grown exponentially during the pandemic. The company’s pizza oven in the Ontario tourist town of Tobermory was the most successful pizza machine in the world by sales volume in August, Tomlin says. The company also operates outside of several convenience stores.

As Canadians become accustomed to social-distancing rules, automated food and drink kiosks are gaining appeal.

And with the pandemic accelerating the automation of the restaurant industry, everything from gourmet cappuccino and artisanal pizza to fresh salads and buttercream frosted cake can now be bought from a vending machine.

The vending machine stigma of bad coffee and stale food may linger, but experts say the robotic kiosks and automats of today are challenging the notion that increasing convenience means sacrificing quality.

The new automated restaurants are serving fresh, made-to-order food and beverages that some say rival the quality of conventional food service.

“It’s not just some microwave pizza from a vending machine,” says Dana McCauley, director of new venture creation in the University of Guelph’s Research Innovation Office.

“It’s a freshly prepared pizza.”

Tomlin claims PizzaForno has carved out a whole new segment in the pizza category. “The low-touch economy is here to stay,” he says.

The company now has 22 units in operation and another 85 on order, and is receiving dozens of licensee inquiries a week.

It’s part of a rapid growth in the automation of restaurants and cafes as consumers seek out options that involve little to no human contact.

“Access to food that hasn’t been touched by anybody is very appealing in this day and age,” McCauley says.

The demand is spurring investments in automation and robotics.

“Financially it didn’t make a lot of sense before because the demand just wasn’t there,” says Saibal Ray, a professor in the Bensadoun School of Retail Management at McGill University.

“But the pandemic has changed that. The financial investments in automation are happening much faster than we anticipated.”

For example, the Dark Horse Coffee Automat opened in Toronto’s Yorkville neighbourhood in August, offering contactless, autonomous espresso drinks.

“It’s the same quality coffee you’d get from a barista at a cafe,” says Brad Ford, general manager of RC Coffee, the tech firm behind the robotic barista.

“The only thing missing is the human element and doing the latte art on top, which we may eventually be able to do with a robotic arm.”

While the automat is an old concept that traces its origins to late 18th century Berlin, today’s automated restaurant infuses technology into nearly every step with customers often ordering and paying from a smartphone.

“The app brought back the automat,” says restaurateur Mohamad Fakih, the president and CEO of Paramount Fine Foods. The company operates multiple restaurants including Box’d, a fully automated restaurant that opened in June using a digital cubby technology.

“We knew the automat was the answer for the bottleneck in our industry. We just had to digitize it.”

The restaurant’s kitchen _ staffed with human chefs _ prepares the food and places orders in a sanitized box, which customers pick up on the other side, eliminating the need for a server or cashier.

Automation has raised concerns about robots replacing jobs, as machines take over duties once performed by humans.

But Fakih says the Box’d restaurant is able to process more orders, moving front-of-house staff into the kitchen.

“We need more chefs in the kitchen and more people delivering the food,” he says. “We’ve also created a new position called a concierge to greet people when they arrive and help them take an order if they’re not digitally savvy.”

Industry experts say automation could help some restaurants recover from crippling pandemic shutdowns.

More than 10,000 restaurants have closed since the start of the pandemic, a staggering number that increases every day, says Todd Barclay, president and CEO of Restaurants Canada.

“It’s been catastrophic,” he says. “Those who are still open say they’re barely keeping their nose above water.”

Barclay says technology will play a role in the restaurants of the future, with increasing automation continuing after the pandemic, especially in more casual dining settings.

But he says there’s also a massive pent up demand for the human connection and social interaction eateries can offer.

“Many people tell me they can’t wait to sit down with their friends and family and enjoy the hustle and bustle and noise of a typical restaurant because we’re social creatures,” Barclay says.

Still, McCauley says automated restaurants will likely thrive in high-volume settings, like food courts, as well as places that don’t justify opening a full cafe or restaurant, like a ferry terminal.

It will also help restaurants with the cost of doing business.

Jarrett Vaughan, professor in the Sauder School of Business at the University of British Columbia, says labour is often 30 to 40 per cent of a restaurant’s overhead.

He says automation could help reduce those costs and potentially be more reliable.

“It can be hard to find a labour force in some areas, especially in city centres where it’s more expensive to live,” Vaughan says.

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The way to consumers’ hearts is through their stomachs

With convenience at their core, c-stores take a bite out of the foodservice market

Screen Shot 2019-12-13 at 9.01.40 AMMilk. Bread. Tobacco. These are the traditional staples that drew customers to convenience stores. Tradition is changing. More and more it’s foodservice selections—everything from authentic shawarma to vegan pizza to gourmet burgers—that are attracting customers and keeping them coming back.

C-stores are offering more diverse food options and emphasizing high quality, hoping to reduce the stigma of “gas station food,” says Julia Taylor, c-store segment leader with Cargill Foodservice in Gibsonia, PA. “They are focusing on having desirable and distinct products that build their brand reputation to create loyal customers and build their food business by becoming a foodservice destination.” 

The efforts are paying off. U.S. convenience stores experienced a 16th straight year of record in-store sales in 2018, according to the National Association of Convenience Stores’ (NACS) most recent state of the industry report. There, foodservice sales accounted for 22.6% of in-store sales, while in Canada it’s estimated to be about 13%. This category continues to be a key focus for the convenience store channel, according to NACS, which defines foodservice as a broad category that primarily encompasses prepared food, as well as commissary foods and hot, cold and frozen dispensed beverages.

Evolving to accommodate foodservice

The growth in foodservice also has led to an increase in store size. Overall, the average convenience store is 3,230 sq. ft. However, as newer stores feature touchscreen food-ordering kiosks, add space for in-store seating and waiting areas and incorporate an open-kitchen design, the size of new stores has increased to 4,991 sq. ft. in rural locations, and 4,603 sq. ft. in urban locations.

Investing in food is time and money well spent, says Taylor. “Operations looking to offer broad mix solutions will be rewarded by their customers. Shoppers are seeking a place that gives them a break in the action of a hectic daily routine—a place that bails them out and always has their back.”

 Catering to consumers’ tastes

Indeed, selection and quality is such that many customers are turning to c-stores instead of fast food outlets. “Convenience retailers with compelling foodservice programs are a growing threat to quick service restaurants,” says Frank Beard, convenience store trends analyst at GasBuddy, an app company based in Boston. “Data show that people choose convenience stores over fast food locations because of the convenience of an all-in-one stop for fuel and food, followed by a preference for the taste of the food at c-stores.”

Diversity is a cornerstone. Today’s foodservice options go well beyond pre-wrapped sandwiches, muffins and soup. “Convenience brands are well-positioned to cater to consumers’ tastes because they aren’t pigeon-holed into one type of cuisine,” Beard notes, adding that younger consumers prefer more variety, particularly with newer menu items like burritos and pizzas.

7-Eleven Canada, for example, has added Beyond Meat Pizza to its existing Hot to Go menu. Made with 100% plant-based Italian sausage crumbles, the new slice plays a dual role for many Canadians: it satisfies their craving for pizza and their desire to eat more healthily.  “By expanding the fresh food assortment offered to our customers, we hope to provide options for every preference,” says Doug Rosencrans, VP and general manager of 7-Eleven Canada in Vancouver. “Beyond Meat has created excitement around plant-based protein alternatives and with the introduction of the Beyond Sausage and Roasted Veggie Pizza, we are providing our customers with what they want.”

Quality items that appeal to a broad customer base at the right price point are important for convenience stores, stresses Taylor. “Creating and offering signature, desirable items elevates c-stores from a convenience stop to a portable dining destination. Give customers options that go beyond the current selection and utilize promotions to encourage consumers to change up their habits.” 

Tyson Foods, Inc., for instance, has launched Pact, a new line of functional refrigerated protein snacks created to help people harness the natural benefits of food. Pact Snack Bites are literally packed with nutrition. Made with real fruits and nuts, they have 10-plus wholesome ingredients per serving and contain ingredients like kombucha, matcha and turmeric. “Consumers are looking for delicious, convenient foods to deliver essential protein and other functional benefits,” says Noelle O’Mara, group president of prepared foods for Tyson Foods in Springdale, Ark. 

Saving space

Such offerings are also space savers. Operating in the contemporary foodservice environment does not require a large investment in equipment or significant and additional space to serve up delicious meals. Combi ovens, for instance, are growing in popularity. These ovens, which enable pressureless steam, convected heat, and a combination of both in a single piece of equipment, are more expensive upfront, but save owners from buying and servicing two ovens, while also taking up much less space. 

Screen Shot 2019-12-13 at 9.02.24 AMToronto-based PizzaForno is making it even easier for stores squeezed for interior space to feed hungry customers. There are five 58-sq.-ft. PizzaForno kiosks located outside of convenience stores in Canada, providing 24-7 access to artisan pizzas cooked in an automated oven in just three minutes.

“The PizzaForno kiosks located in front of c-stores have been very effective in not only generating pizza sales, but also increasing in-store sales on items such as beverages, snacks and cigarettes,” says president and co–founder Les Tomlin, adding a turnkey PizzaForno license, including all equipment and set-up, is $150,000. “Operators are required to keep the machine stocked, which can be a daily or every other day task. PizzaForno handles everything else—all the maintenance and service, credit and debit reconciliation, as well as all marketing programs.” 

 Foodservice 101

Screen Shot 2019-12-13 at 9.02.06 AMThe concept speaks to the critical components for foodservice areas, which include bright, visible signage and food that is easily accessible. Research also indicates speed is a relative issue: customers are willing to wait five minutes for their meal.

What is essential is portability, says Taylor, highlighting the company’s Supreme Egg Bites in the U.S. “C-stores should explore ways to facilitate on-the-go eating through bite-sized offerings and packaging that supports dashboard dining.”

In Canada, for instance, Cheesewich is tapping into this trend with Bacon N Eggs to go, as well as its award-winning Cheesewich egg and salami sandwich without the bread.

Cargill also works with c-store owners to enhance their foodservice offerings. “We hold innovation sessions to build relationships and find trends in the market,” says Taylor. “And, we can work with our research and development team to create proprietary SKUs for c-stores that meet the unique needs of the segment.”

 That segment is changing as more and more customers turn to c-stores for lunches, snacks and on-the-go meals. Oh yes, they might pick up a carton of milk and some bread while they’re there.  

Originally published in the November/December issue of Convenience Store News Canada. 

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Join the $50B North American pizza market with PizzaForno

PF-ConvenienceEmail-03North America’s first automated pizza oven chain, PizzaForno, is changing the way Canadians enjoy pizza, and wants you to be part of the revolution!
With PizzaForno’s licensing opportunities, you can offer customers high-quality, artisanal pizza with zero on-site labour and nearly zero product waste. The patented PizzaForno ovens bring in profit 24 hours a day, seven days a week, while only requiring 50 square feet – inside or outside!

Contact the PizzaForno team for more information.

Kaitlin Hazen | 416.898.8565

Visit the PizzaForno website.