In the past 4 days, more than 1,200 restaurants in major cities like Delhi, Mumbai, Bengaluru, Kolkata, Goa, Pune, Gurgaon and Vadodara have delisted themselves from the dine-in programmes of services like Zomato, EazyDiner, Nearbuy, MagicPin and Gourmet Passport, under the National Restaurant Association of India (NRAI)’s #Logout campaign.
Tough competition in the market had compelled restaurants to participate in the offers pushed by these applications. However, the heavy discounting has deeply hurt restaurants’ profitability.
Did you know that there are only 2-3% of restaurants in the world that offer online ordering facility?
In the food ordering business, traditionally, people had to make calls to place orders or drive to the restaurants for a take-out, then wait for the food to be prepared, and delivered. This presented a sub-optimal solution to consumers, especially given their increasingly busy lifestyles.
With the emergence of food delivery apps, consumers are now able to place an order online. These apps enabled users to browse through a restaurant’s menu in peace and avail daily deals and offers. Naturally, this has led to an exponential increase in the total sale value per order.
Domino’s Pizza introduced their online ordering system in 2010. Ever since, the company has grown to become the largest pizza chain in the world with the stock price rising from $8 to $200.
“In 2016, the percentage of restaurant orders placed online exceeded the quantity placed verbally over the phone”.
These advancements have done wonders to improve organisation, efficiency, and customer experience.
However, they have also brought about an onslaught of problems that are affecting the way food businesses operate.
These issues create bottlenecks which impede expected growth. Because the customer is the King, he must be kept happy. Discount schemes, though attractive to customers, are unsustainable. In essence, they cause customers to expect steep discounts each time they order food or dine-in, shifting focus from the quality of food to discounts.
Amidst ongoing protests, Zomato’s founder, Deepinder Goyal, took to Twitter, urging restaurant partners to have a collaborative dialogue with aggregators. Interesting to note is that in a series of tweets, he appealed to restaurateurs to “bring down prices” to encourage consumer spending.
With deep discounting, a business’ margins are bound to shrink. The truth is that keeping customers happy is not enough anymore. Owners of food businesses must find a way to delight customers while keeping profit margins in check. The solution lies in embracing technology in the kitchen.
If a restaurant can develop a menu of tempting meals and consistently replicate them, it is bound to attract more customers. Through automation, businesses can offer customers an enhanced dining experience in a cost-effective manner. How? Machines, unlike humans, can consistently prepare identical meals, both in terms of the dish’s aesthetics and its taste. Ultimately, this can boost customer retention.
Moreover, with apps like Zomato imposing a penalty on restaurants that fail to prepare an order in 15 minutes, speed is also a factor for success. With bots in the kitchen, not just consistency in quality, but speed is also bound to improve.
An experienced executive chef’s monthly salary in India ranges from Rs. 1,00,000 to Rs. 2,00,000, whereas a Sous chef in a leading hotel costs anywhere from Rs. 30,000 to Rs. 70,000. The amount a restaurateur will need to shelve out as salary for chefs depends upon the institute of their training, culinary experience, and skill set.
Automation can lower these costs as you will no longer need to hire for skills. Machines will take care of preparing meals that are identical, both in terms of quality and quantity, leaving businesses free to hire resources that fit the bill in terms of their budget and requirements. Automation can significantly reduce a restaurant’s payroll expenses, ultimately boosting the bottom-line.
A restaurant runs on two categories of expenses – fixed expenses such as cost of equipment and infrastructure and recurring expenses such as salaries. Installing machines and robots is a one-time expense and hence, the ROI is much higher in the long run as compared to shelling out monthly salaries for the staff.
Mukunda Foods is one of the fastest-growing companies in the arena of Kitchen Robotics. With an end-to-end integration with in-house R&D, manufacturing facility, and a global service network, Mukunda Foods has helped 1000+kitchens across 22 countries to realise the benefits of automation.
For instance, with a kitchen bot like DosaMatic, a South Indian food brand today is able to expand to 100+ outlets in a quarter. The kitchen bots are a one-time expenditure that can be recovered in under 6 months of operations.
The long-term sustainability of food service providers is threatened by a multitude of cost pressures. Automation can be viewed as the antidote to such woes. It helps increment overhead savings and can help with a food outlet’s long-term prospects.
In the end, it is important to understand that the goal of automation is not to destroy the ‘human’ element but to assist human effort. The idea is to streamline operations such that employees can focus on providing a better dining experience to customers, instead of staying engaged in repetitive tasks that can easily be automated.
Let’s not #Logout from Delivery platforms but instead #Login to Kitchen Robotics.
ESHWAR K VIKAS
Building the kitchens of tomorrow
Published • 1mo