Chili’s Is Testing Drones and Robots to Save on Delivery and Labor – Business Insider

Fast-food giants, such as Starbucks, Domino's, and Chipotle, are typically the first movers when it comes to restaurant innovation. Casual-dining chains are often the last to adopt new technologies.

But Chili's is looking to blaze its own trail by pulling the industry's version of a technological hat trick. The 1,200-unit chain is leaning into three robotics and automation technologies: autonomous rovers, drone delivery, and robot food runners and hosts.

"We don't want to be laggards," said Wade Allen, the senior vice president of innovation for Chili's parent company, Brinker International. "We need to be thinking about innovation. We need to be thinking about robotics in the restaurant and making life easier for operators."

The timing is right for Chili's. Food-service robots and drones are taking off as the pandemic and a challenging hiring environment have fueled faster adoption of cost-saving labor and delivery tools. Investors are taking notice, pouring millions into robotics and autonomous logistics startups, such as Coco, Serve Robotics,Bear Robotics, Miso Robotics, and Flytrex.

Allen said he researched various startups and went with drone delivery by Flytrex, self-driving rovers by Serve Robotics, and robot food runners by Bear Robotics. Here's why.

Company: Bear Robotics

Technology: Robot food-service assistants

Job duties: Rita the Robot, a play on the chain's famous margaritas, tackles multiple tasks, such as escorting guests to tables, singing birthday songs, helping servers deliver meals, and busing tables.

Deployment: In 2020, Chili's tested the first robot at one restaurant in Dallas. Six months ago, the chain expanded the pilot to 10 restaurants in California, Texas, and Florida. In April, the company added a Rita the Robot to 51 more restaurants, bringing the total to 61 locations.

Chili's take on the tech: Adding robot food assistants is not a labor-replacing move, Allen said. "Humans matter," he added. But there's a lot of "mundane tasks that go on in the restaurant" that don't necessarily have to be solved by humans, such as delivering dishes or clearing tables.

The Bear Robotics robot zips around the dining room like a Roomba, but with multiple trays for carrying dishes and glasses. It also escorts guests to tables to ensure that hosts never have to leave their station.

Each of the 61 restaurants has one Rita. With "just a few clicks," Allen said, Rita can change roles on the spot.

At the start of a shift, Rita can seat guests, then shift to clearing tables. In between, the robot can add to the "fun and exciting environment" of a Chili's by leading servers in Chili's happy-birthday song, Allen said.

Allen said Brinker went with the SoftBank-backed Bear Robotics because it has a "pretty strong foothold in both Korea and Japan with some of their technology in the casual-dining space." The company has hundreds of robots deployed in restaurants around the world, including Denny's restaurants in the US and Japan.

Company: Flytrex

Technology: Drone delivery

Job duties: Delivering food orders via drone to customers' front and backyards.

Deployment: Flytrex is testing drone deliveries out of two Chili's restaurants in North Carolina and Texas. Delivery is free to customers during beta testing.

Chili's take on the tech: Consumers have grown accustomed to the convenience of delivery, but the fact remains that "third-party delivery is continuing to be expensive" for restaurants, Allen said, referring to costly commission fees charged by operators, such as DoorDash and Uber Eats .

Allen said drones and self-driving robots make sense for the industry as cost-effective alternatives to third-party delivery, whose fees hurt restaurant margins.

Drones, for example, can travel "longer distances more efficiently than a driver of a half-ton vehicle," he said.

Flytrex is one of a handful of logistics companies that have won Federal Aviation Administration approval to pilot drones in the US. Flytrex specifically specializes in food and grocery delivery, having tested its model with Walmart, Starbucks, and El Pollo Loco in North Carolina and California.

Eligible households in North Carolina and Texas can order Chili's food via the Flytrex app. Once orders are placed in the drone, the flight time is about five minutes to someone's home. To keep it simple during beta testing, Brinker is offering drone drops only for its virtual chicken brand, It's Just Wings. Brinker introduced the virtual brand during the pandemic, and it's delivered from more than 1,000 Chili's and Maggiano's Little Italy restaurants, which act like dark kitchens.

"We've delivered thousands of orders between the two restaurants," said Allen, adding that the North Carolina deliveries started in October.

Eventually, Allen said, consumers would be able to order drone deliveries directly from the It's Just Wings app, which is under development. "We started simple. And then we'll scale."

Company: Serve Robotics

Technology: Self-driving robots

Job duties: Food delivery via sidewalk rovers

Deployment: Not yet announced

Chili's take on the tech: Allen said he looked at five rover startups before settling on Serve Robotics. Like Bear Robotics, Allen said he liked that Serve was "further along in their technology" compared to rivals. The California startup has been around for a few years as it was originally the robotics division of Postmates . After Uber bought Postmates in 2020, it spun off Serve, but it remains a key backer of the startup.

Allen said he went with Serve's sidewalk robots because they are fully autonomous, while other rovers are remote-driven. The delivery robots market size is expected to reach $957 million by 2026, up from $212 million in 2021, according to MarketsandMarkets Research.

Neither Serve nor Brinker has disclosed the location or timing of the first deployment.

Allen also didn't disclose the fees associated with rover deliveries. But he said the cost structure would "tend to be cheaper" than third-party food-delivery companies because it is less labor-intensive and more efficient.

He said of autonomous delivery, "That's where I think the world has to go in order to make this a viable solution."

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Chili's Is Testing Drones and Robots to Save on Delivery and Labor - Business Insider