Table of Experts: Latest technology trends in hospitality – San Francisco Business Times – The Business Journals

At a Sept. 8 virtual forum sponsored by Comcast Business and hosted by the San Francisco Business Times and North Bay Business Journal, panelists Jonny Barr, general manager at three Michelin-star Healdsburg restaurant SingleThread Farm-Restaurant-Inn, Hanson Li, chief executive of Lazy Susan Restaurant in San Francisco and managing partner at Salt Partners Group; and celebrity chef Robert Irvine discussed how technology usage in hospitality environments has evolved as a result of the COVID-19 pandemic; and how business in the industry can prepare for the tech-enabled experiences of the future. The discussion was moderated Mary Huss, publisher of the San Francisco Business Times. Panel comments have been lightly edited for length and clarity.
What technologies are your restaurants implementing to keep guests safe and healthy while providing a first-class experience ?
LI: When the pandemic hit in March 2020, there was a lot of we didn’t know about how the virus spreads. A good friend of mine and his two colleagues decided to start a company called R-Zeroright in March. They were working on adopting ultraviolet-C technology from hospitals, where it was used to sanitize operating rooms and hospitals, to make it cheaper, more accessible, and more mobile for use in schools, restaurants and hotels.
One of my restaurants was the first to prototype and use this UV-C disinfection robot in our restaurant, where I was able to sanitize a 1000-square-foot dining room in just eight minutes with UV-C light. That company has gone on to support many school systems, restaurants, hotels, sports stadiums with this adopted technology.
BARR: We use a booking platform called Tock, which is really beneficial to restaurants like ours, where we sell the experience as a ticketed event. We only can seat 72 guests a night, so we’re not dealing with massive cover counts. Between questionnaires and live persons reaching out to those guests as they book, the platform allows us to create unique experiences for the guests that are dining with us.
Tock also demonstrated its value to us during the pandemic. Our following is very large, but when the pandemic hit, we had to pivot. We pivoted from a three Michelin-star, 10-course tasting menu to daily to-go menus.
We also started a gifted giving program, leveraging the Tock booking process, where guests had the ability to donate $10, $15 or $25. That allowed us to provide meals for up to 300 people a day, outside of our to-go offerings.
IRVINE: COVID created a whole new spectrum for our restaurant and hospitality group. We shut down. We went into ghost kitchens. We went into technologies that we’ve never used before.
And technology has changed dramatically since COVID. Today, we talk about inventory control systems, we talk about scheduling. There are more and more technologies coming out that make life a lot easier for both chain restaurants and independent restaurants. I think that’s exciting right now.
What role does technology play in engaging your customers?
LI: The pandemic changed consumer expectations. They now expect to use technology to reach any restaurant. Whereas before, at least in the U.S., delivery was mostly limited to pizza and Chinese takeout, and then people would go to restaurants to eat or buy groceries to cook at home. Those were the main categories of how people would spend money on food.
Now, though, you can get anything delivered. You order from your phone and pick up food anywhere. Consumers expect to be able to reach any restaurant via mobile apps, through the restaurant’s website, over the phone, by walking in, or through third-party apps. There are a lot of different ways for consumers to order and get food from restaurants now. That changed very quickly.
A lot of independent restaurants are still trying to catch up in terms of being able to cater to and serve consumers wherever they’re coming in from. I built my restaurant Lazy Susan, a Chinese takeout restaurant, specifically for takeout and delivery. It’s primarily takeout. There’s a counter and a couple of tables. It’s not full service. We do that to keep our cost structure intact and to offer great food at a reasonable price for consumers.
We use a lot of technology to enable an omnichannel experience for consumers because the customers are reaching us not just by walking in, but also digitally. Right now, I’m testing a lot of different channels for reaching those customers digitally — through social media, through advertising digitally, through mobile tracking and geofencing services. That’s all new for us.
How are you integrating technology into your dining rooms and kitchens?
IRVINE: The youth of today want instant gratification. They want an amazing product, consistently.
And collectively, we as an industry are facing a real problem. Our biggest problem right now is people. We don’t have the people. It doesn’t matter whether you pay them $27 (an hour) or $44.
In Vegas, I pay $27 for a cook, because it’s union. I’m okay with that, whatever it is. But as inflation rises and as new bills are passed increasing minimum wage, that hurts the restaurateur’s bottom line.
And by the way, there’s not a lot of bottom line. If your restaurant makes $1,000,000 in revenue in a year, good luck walking away with $80,000 of it, for all the hours you work.
With the struggle of finding people to do the dish washing, the mundane stuff, technology is taking over. We now have robots in McDonalds.
Other restaurants — I won’t name them — have robots flipping burgers, making french fries, and doing dishes. I think that’s the technological future of our business. I’m not saying Dominique Crenn, a three Michelin-star chef, is going to have a robot flipping eggs.
But for the high volume, quick-service restaurants, it’s happening, and that’s because we do not have enough people coming into the industry.
Technology says, “Hey, let’s change that.” We now have — literally — robotic lawn mowers doing NFL stadiums. We have hamburgers. We have robots making tortilla chips. But we still crave that personal touch. Maybe a restaurant doesn’t want an identical amount of salt and pepper on each chip, or maybe they don’t want a precisely defined concentration of lemon. The trick is to program this robot to be able to make it the way a human being would do it.
BARR: We probably have two to three team members per guest. We have a fairly large team. So we’re on the opposite end from the conditions Robert’s describing.
We were able to keep our whole team staffed through the pandemic through programs like our to-go menu and the Sonoma Family Meal. Then, we were able to grow after the pandemic. We purchased a 26-acre farm that now has its own store attached to it. We grew our wine business through the pandemic. We opened a retail wine store, which has taken off.
Where we have to be careful with technology is ensuring that we hold onto that human touch. During the pandemic we did contactless payment. Everything was done via your phone or an app, or when you got home. You were able to leave the experience, go home and complete your payment. That allowed us to open our doors and keep guests safe.
But we found that guests really liked not having a transaction to conclude their experience. It really does feel like you’re coming into our house — that you’re a part of this dinner party.
And it may be that you’re trying to impress a date or a business associate, and you don’t want them to see what you’re spending on the meal. So it’s all done behind the scenes. If you dine in the restaurant, you never see anybody on any screens or behind point-of-sale systems. It’s all done behind the scenes. As we integrate new technology, we want to keep it a high-touch, bespoke experience.
How do you map out your technology needs to find the right solutions? Who do you turn to for advice?
IRVINE: I’m not a tech guy. Or at least, I wasn’t a tech guy until 11 years ago. I literally had Comcast Business come in and tell me what to do. I needed somebody to help me combine all the business data that I had into a single reporting system, not just from our restaurants, but our packaged food, spirits and clothing businesses too.
I’m a great chef, or a good cook, so I can do that part. But where the technology comes into play, you need a trusted partner to come in and say, “Here’s what I would do based on where you are, and where you want to be five years from now.”
That kind of advice was one of the biggest reasons that I first partnered with Comcast Business almost 11 years ago. Mom-and-pop operations just weren’t aware enough of how technology was going to change our business. So I’m no tech wizard. But I love technology and what it’s doing for our businesses.
BARR: Here in our small corner of the world, I find it’s really about leaning on other industry members. Hanson and I were talking about Slack, which both of use in our restaurants. It’s a communication app.
And Hanson brought up this use case for it, where he uses it to instantly translate English sentences into Spanish for his Spanish-speaking team. So right after this meeting, I’m going to meet with my human resources manager, and we’re going to install this app and make sure everybody can access it. Because communication is one of the hardest things in the restaurant business.
So in our industry, I look towards what people like Robert are saying and ask, “How can I learn from him?” That’s where I get my resources. It’s where I learn best practices. It’s all from asking, “What’s new? What’s working for all your restaurants? How can we adapt it here?”
LI: I was a technology investor before starting my restaurant group. I live in San Francisco, in the middle of Silicon Valley.
So I’m lucky that I have a lot of connections and exposure to startups and other companies trying to serve the restaurant and hospitality industries. I look at companies or software through my investment lens. I want to know, “Is it useful for my restaurants?”
And my restaurants become guinea pigs. When there’s alignment there, I become a customer, I become an investor, and I become an advisor. I’ve been lucky in that I’ve had some successes in doing all of those together.
We’re still really early in this transformation. One of the things Chef Robert observed earlier is that the restaurant industry is one of the last to go through this technology transformation. The “e-commercification” of a lot of other industries already happened. We all remember when Zappos started. “Buying shoes online, what is that?” Now everyone does it.
I think the one disadvantage for restaurant industry is that consumers are way ahead us, in terms of using technology to buy things. We are all trying to catch up. So the companies, especially the software companies, that are trying to serve the restaurant industry — they’re only just getting started.
It’s a very exciting time as a potential investor. It’s exciting for independents like us to try these things.
But it’s also very complex, because we find all these different systems don’t talk to each other. And who has the expertise to weave it all together? Achieving that information flow is a big challenge. We have a lot of great data in our restaurants, but the systems don’t talk to each other.
Chef Irvine, tell us about the aluminum can alternative you’ve developed.
IRVINE: I’ve been working on it for four years. One of the biggest issues the military has is cans. We use canned goods in our restaurants, so aircraft carriers, warships, deploying forces, that’s what they take with them. The problem is, they’re metal. They’re heavy to ship and hard to get rid of. So 20 years ago, the military put out a request for proposal to replace the can.
For years, nobody was able to do it. Well, it took me four years, but we’ve finally done it. It’s literally a biodegradable pouch in which I can put the same amount of food I would put in a can. I can drop it from 5,000 feet. On a crush test, it doesn’t hurt anything, which is really important, because that’s what we do in the military.
But I see its usage transcending the military and a retail pouch arriving really quickly. Right now, we’re using military-size cans or pouches, but I can see them getting smaller and smaller. We talk about global warming and pollution. Well, look at what we make: plastics, and cans and all that. You have to think on a big scale now.
How do third-party apps for ordering, delivery and reservations affect restaurants’ ability to engage with their customers?
LI: When someone orders off a third-party delivery app, they should be both the app’s and the restaurant’s customer. When you buy something from Amazon, you’re the customer of Amazon, but you are also buying the brand.
So it’s interesting how third-party apps have effectively built walls around their data. And it’s not even so much about the customer data. For me, one of the struggles I’ve had with third-party app is just the inability to deliver hospitality. I have no idea how to apologize to customers if I’m doing something wrong. There’s no way to say, “thank you.” There’s always a middleman.
With hospitality turning to technologies like contactless payment, voice controls and contactless check-in, how do you retain the personal, human touch?
IRVINE: I remember years ago, there was a hotel in San Francisco that was the first to offer check-in, room keys, room service, everything through your phone. I stayed at the hotel. I ordered towels on an app and within 30 seconds those towels came to the door. That never happens at hotels.
But grocery checkouts are now self-service. I went to a restaurant the other day where the food was delivered on a robot. I’d never seen that before. It was very intriguing. But there was no personal contact. Somebody came and took an order. But then food came, and we just helped ourselves. It’s like the conveyor belts at sushi restaurants.
BARR: 90% of our guests are completely paid for by the time they dine. They can pre-purchase any wine pairings, Wagyu supplements, etc.
But there are guests who don’t want to make their wine selection in advance. They want to peruse our list of over 3,000 bottles. It’s an award-winning list and they come here specifically for the list. That’s when there’ll be a transaction.
But we’re never processing that transaction in front of a guest at any point. It all happens behind closed doors. So we blend technology in, but we also try to hide technology from what we do here.
It’s been a great learning experience, going from requiring a deposit only to full pre-payment. And as Robert was saying, inflation is one of the hardest things restaurants are dealing with right now. We’re to the point where if people decide not to show up to their reservation, it is prepaid and that allows us to protect the business.
LI: There’s a lot of talk about robots. One of my favorite robots that are in all our restaurants is the dishwasher. The dishwasher is a machine that replaces what used to be human work. That’s already here. We all have adopted it. It helped us to run restaurants more efficiently.
And by the way, it’s also more sanitary to use the dishwasher to wash dishes. The robot moving on the floor or the software that helps guest engagement — all that’s being discovered right now.
IRVINE: Look at the car business. How many people actually screw things in and bolt things in anymore? Not many, because it’s done by robot.
Because it’s quicker, it’s more efficient, they don’t call in sick. Of course, expectations differ depending on the restaurant or hotel. It depends on the levels. But automation is coming whether we like it or not, because we don’t have the skilled, trained people — or even unskilled — to do dishes anymore.
BARR: You see different kinds of guests. You have the guests who want to be able to go through the booking process, pay for everything up front, type in their dietary restrictions, answer the questions, and have it be done.
Then there’s the type of guest who’s going to book using the technology, but they still want the human aspect. And we still have the ability to provide that human aspect when guests are going through our reservations team. We have a reservations manager and several concierges dedicated to it.
We also pull out technology when we need to. The other day we had to shut down the restaurant, because we lost power to the AC. Rather than just hitting “cancel” and refunding their money, we had a team working around the clock, reaching out and creating future experiences through conversations. We wanted to have the human element.
What’s great about technologies like Slack is that they allow us to better communicate as a restaurant. Say a guest arrives, walks in through the front door, sees the open kitchen, and starts observing the prep. Maybe they’re one of those guests that just blew through the booking process, didn’t fill anything out, didn’t respond to emails, and didn’t return any calls.
This is their chance to get in front of their own experience. They might look into the restaurant and they see raw fish preparation going on. Then they make a comment like, “Oh man, I don’t eat raw fish.”
With Slack, we’re able to do a quick little slide, type, type, type, and it’s all taken care of. By the time that guest gets to their dinner table, they’re thinking, “Wait, I didn’t mention that I don’t eat raw fish. How did this happen?”
Well, we heard, we communicated that with our team. They don’t need to know that we’re using technology.
It’s the same thing if they come into the inn and say, “Oh honey, I forgot it was our anniversary.” We overhear that, message our team who’s back in the restaurant. They print a card, they run downstairs, get all the signatures. Before the guest sits down, that card is on the table. It’s kind of like a magic show for some guests.
So though we hide technology, we still need technology to move forward. That’s the truth. If you’re closed-minded to robots working in the restaurant in the back doing dishes, you should know the day is coming where people won’t want to work for $25, $27 an hour. They won’t want to work in the back of a kitchen, sweating, period. So we have to embrace technology here, but also make it work for our guests.
How can the hospitality industry better prepare for the future?
LI: For a lot of independent restaurants, it might be the case that up until a few years ago you didn’t even need Wi-Fi, because your kitchen printer is hard wired to your POS.
But now with ordering coming digitally into your shop, there are more Bluetooth devices around the restaurant. There are base infrastructure needs that weren’t critical before.
But when the digital orders can’t come into my shop, that’s critical. And that requires connectively in a much more reliable way than before.
If someone was asking me for advice about opening a new restaurant, I would say “invest in your infrastructure.” Front and back of house Wi-Fi network, hard ethernet connections — those matter a lot more now, because they’re a part of your revenue and sales channels. The customer is going to be going through those digital channels. They’re not just going to walk in.
IRVINE: Again, it comes down to customer expectations. What do customers expect when they walk in somewhere, and how are we going to deliver that?
Eating great food and having an exceptional experience that you can share with the world is increasingly important. Taking selfies, taking pictures of the food. That’s an extension of our business that we never had to think about until recently. I talk about this all the time in dining facilities and restaurants that don’t have reliable internet, because when I sit down, I also want to FaceTime my wife, or my friends, and say, “Hey, look. Look at what I’m eating right now.”
It’s a humanistic thing. We want to brag that we are in this restaurant, this hotel, this place, having an amazing meal.
I want to come to a restaurant and be blown away by the service. No point-of-sale stuff going on in front of me. I don’t want to see someone chewing gum when I walk in the door. There are all these things we expect, and when we experience something different, we do one of two things.
We either use social media and say, “It’s not that good, it’s not what I thought it would be.” Or, “It’s amazing, you’ve got to come here.” And that’s the double-edged sword of social media, it can make or break a business really quickly.
BARR: I think communication and collaborate with other restaurateurs is critical. You can listen to leaders like Robert, see what he’s doing, see the information that he’s seeing, find out what’s successful for his restaurants, then find a way to adapt it to what you’re doing.
We talk about this thing called “kaizen” daily in our lineups: constant good change. Part of that is being open to change, being open to thoughtful leadership, and not always thinking you know best. If you think you know best, you’re only hindering yourself. So listening to leaders like Robert, like Hanson, and being open-minded is the best advice I can give the hospitality industry. We all have each other’s back. We saw that during the pandemic. The world might not have seen it, but we stood together.
Meet the panel
Jonny Barr, General Manager, SingleThread Farm-Restaurant-Inn. Jonny Barr is general manager at the SingleThread Farm-Restaurant-Inn, a farm, inn and wine retailer located in Healdsburg, California, anchored by a three Michelin-star restaurant. He brings extensive hospitality and leadership experience to the team. Originally from upstate New York, Barr moved to southern California at a young age, where for five years he held management and operations titles in various restaurants, nurturing his passion for hospitality and beverage programs. In 2015, Jonny moved to New York City to become general manager of Contra, located in the Lower East Side of Manhattan. In 2017 he joined SingleThread Farm-Restaurant-Inn, where he’s been since opening day. In this role, he strives to set the tone for a unique and unparalleled guest experience, polished service, and gracious hospitality to ensure that every visitor feels like they’re guests in his home.
Robert Irvine, Host, “Restaurant Impossible.” Robert Irvine is a well-known chef and entrepreneur as well as philanthropic supporter of the United States military. As the host of Food Network’s hit show “Restaurant: Impossible,” he’s given more than 200 struggling restaurateurs a second chance to turn their lives and businesses around. In addition to his restaurants, located in Las Vegas and inside the Pentagon, he is the owner of FitCrunch, which provides protein bars, powders and snacks available at stores nationwide; Robert Irvine Foods, which distributes prepared, restaurant-style dishes to grocery stores; and Boardroom Spirits, a Lansdale, Pennsylvania-based craft. A portion of the proceeds from all of Irvine’s endeavors benefits the Robert Irvine Foundation, a 501(c)(3) nonprofit organization that gives back to servicemen and women and first responders by raising service dogs, making mental health and wellness services available to veterans in need, providing mobility devices for the disabled, and more.
Hanson Li, CEO, Lazy Susan Restaurant. Hanson Li is the co-founder and CEO of Lazy Susan, a Chinese take-out start-up located in San Francisco that draws inspiration from the long history of Chinese food in America while adopting it for today’s taste and consumers. In 2014, Hanson Li founded Salt Partners Group, a San Francisco-based food, beverage and restaurant group that is currently the managing partner of Humphry Slocombe Ice Cream, High-Proof beverage group and B-Side. Prior to founding Salt Partners, Hanson was managing director at The Hina Group, a China-focused investment bank and private equity firm. Li is an active advisor and investor of a variety of companies at the intersection of food and technology including Bikky, PlateIQ, Workstream, Entrée, Ritual, Expo and Territory Foods. He’s also an investor in several food and beverage companies including Sunday Group, Sanzo and Bacon Bacon. He founded his first dining concept in 2002 with Halcyon, a coffee bar and lounge that now has four locations across Texas.
Moderator
Mary Huss, publisher, San Francisco Business Times. Mary Huss is Bay Area market president and publisher of the San Francisco Business Times, the No. 1 source for local business news and information in the San Francisco Bay Area, as well as its sister paper, Silicon Valley Business Journal. During her tenure, the paper has grown to be one of the largest and most profitable publications in the American City Business Journals portfolio. Outside of her publishing duties, Huss serves on the boards for the Bay Area Council, the San Francisco Chamber of Commerce and the San Francisco State University Foundation.
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