AI Adoption Is Everywhere — How Will It Impact the Food Service Industry?

The food industry is getting an overhaul in the age of artificial intelligence and other automated technology. While AI has been creeping into virtually every sector, AI in food service is a relatively new proposition. What will happen as more fast food restaurants like Hardee's and Carl's Jr. begin to adopt AI in its day-to-day operations?

Restaurants are beginning to use Presto artificial intelligence software in their drive-thru operations, CNBC reports. CKE Restaurants, the parent company of Carl's Jr. and Hardee's, already ran a pilot program of the AI software and is now rolling it out nationwide at those two chains.

One of the primary benefits of using AI in food service, particularly during the ordering process in a drive-thru lane, is that AI technology is very good at "upselling." That's when it asks the customer if they want to add anything to their order, like fries or dessert, or get a larger size of what they ordered. Presto President Dan Mosher says that AI is better at "relentlessly upselling" customers, which brings in more money to the restaurants.

Besides the upselling, AI helps free up employees to handle other tasks so they aren't so overwhelmed. The AI ordering technology runs unassisted, although employees can hear orders through headsets while they prepare orders, process payments, and interact at the pickup window with customers.

Customers may not mind interacting with AI when ordering their food, if it improves accuracy and speed with which their orders are fulfilled. But if AI begins to be used in other parts of the process, such as food preparation, it may present some issues.

Plenty of people are concerned about the potential loss of jobs due to AI, since the more tasks that can be done by robots mean fewer entry-level jobs.

Customers may not appreciate the "relentless upselling" from AI when they're in a drive-thru line, but if the service otherwise improves, they may not mind so much.

One reason the restaurant industry has been somewhat slow to adopt AI is that their margins are low, and labor costs are also relatively low. Building AI into the business model can be an expensive investment. Presto's interim CEO Krishna Gupta said that now "labor costs are going up and the technology is ready to truly be able to alleviate the labor costs as well and drive incremental revenue.”

McDonald's is working to incorporate AI into its operations as well. CNBC reported that McDonald's sold its McD Tech Labs to IBM in 2021, saying it planned to partner with IBM on drive-thru AI technology.

CKE Restaurants ran a pilot program of Presto technology at select Carl's Jr. and Hardee's locations last year. Phil Crawford, Chief Technology Officer, told CNBC the pilot exceeded expectations on metrics like speed of service, upselling, order accuracy, intervention from workers, and the overall employee and customer experience.

The parent company will roll out AI in food service at its approximately 250 restaurants across the country. Franchises run the remainder of Hardee's and Carl's Jr. restaurants, and Crawford didn't specify how many franchisees had signed on to use Presto technology so far.

It's conceivable that AI in food service could move into other restaurants. Roark Capital owns CKE Restaurants as well as Inspire Brands (the parent of Dunkin') and Focus Brands (owner of Auntie Anne's). Will AI eventually be used in all of the most ubiquitous fast-casual restaurants customers love? Time will tell.

CNBC reported that OpenAI (developer of ChatGPT) is partnering with Presto to expand the Presto Voice features. Also OpenAI CEO Sam Altman was an early investor in Presto.