Celebrity Restaurants, Tipping Robots, and Foodservice Tech Layoffs
I’m thinking more and more about whether it’s a good idea for personalities to get involved with the restaurant business. The exposure can be great but the downside could hurt the very asset they cherish the most - their personal brand.
In the world of foodservice, celebrity endorsements and personality-driven food concepts have long been a popular way to generate buzz and attract customers. However, with the rise of social media and the increasing scrutiny of celebrities, the question of whether these collaborations are still worth it is becoming more and more relevant.
On one hand, celebrity partnerships can undoubtedly bring a lot to the table. Celebrities have large followings, which can help increase brand awareness and attract new customers. They can also help create a positive image for the foodservice brand and even help launch new products or menu items.
However, there are brand-damaging issues that could have a significant impact on celebs. In June 2023, MrBeast - quite possibly the best personal brand on Youtube himself filed a lawsuit against the company that operates MrBeast Burger, alleging that the company was using his name and likeness without his permission and that the food quality was so bad that it was damaging his reputation. The lawsuit is still ongoing. There is a lot more to this story that really puts the blame on Mr. Beast (Jimmy Donaldson) did not understand the restaurant business nor the tireless hours of significant dedication to the craft of running an operation.
Then there is the Story of Shaq - who has invested and is integrated into many restaurant franchise systems and recently launched his own brand Big Chicken. What he has done right is adding talent to the roster of these operations, probably coming from his years of playing with Kobe and understanding it takes real talent to build around you if you plan to create a legend.
So, is it still worth it for celebrities to collaborate or start a restaurant business? It depends on the specific circumstances. If the celebrity and/or brand is willing to invest the money and time, and if the celebrity is a good fit for the brand, then collaboration can be a great way to boost business. However, it is important to weigh the potential risks and costs before deciding.
Tipping the Robot
Is tipping the robot a new concept as more and more locations have little to no Front of House Staff.
As the foodservice industry continues to automate, more and more customers are finding themselves interacting with robots and self-service instead of human staff. This has led to some interesting questions about tipping etiquette at the register.
This past week on a trip I had a chance to run into this very issue in a full self serve checkout the final register screen asked for a min 20% tip. My first question was why and then who? This could be a new model for back of house employees or even other staff that are involved in the tech or something like that.
However in a recent X poll - the issue was raised and the results were unanimous - Tell the robot to get a real job and leave the tip for the real workers.
More Foodservice Tech Layoffs in 2024?
The foodservice industry has been hit hard by layoffs in recent years, and this trend is expected to continue in 2024. This is due to several factors, including the shifting mindset of consumers looking a fewer occaisions, add this with brands starting to explore their own tech stacks is putting some pressure on foodservice technology companies.
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Here are some of the most notable foodservice tech layoffs that have occurred in 2023:
DoorDash laid off 1,200 employees in March 2023.
GoPuff laid off 1,500 employees in April 2023.
Spoonful of Rice laid off 80 employees in June 2023.
Delivery Hero laid off 400 employees in July 2023.
Has there been a land rush on restaurant tech that is causing a slowdown or a potential full rethink of the tech stack for the future? 2024 will be the year that this will most likely resolve an answer as less and less money is available in the retail investor space.
The tide is starting to turn. In the first half of 2023, venture capital funding for restaurant tech startups fell by 40% compared to the same period in 2022. This decline is due to a number of factors, including the rising cost of capital, the increasing scrutiny of restaurant tech startups by investors, and the economic downturn.
As a result of this funding slowdown, many restaurant tech startups are struggling to raise money. This is forcing them to cut costs, lay off employees, and even pivot their businesses.
Some experts believe that the decline in VC funding for restaurant tech is a sign of a broader bubble bursting in the industry. They argue that many restaurant tech startups were overvalued and that their business models were not sustainable.
Others believe that the decline in VC funding is simply a temporary setback. They argue that the long-term outlook for restaurant tech is still positive, as there is a growing demand for new technologies that can help restaurants improve their operations.
Only time will tell what the future holds for restaurant tech. However, it is clear that the industry is facing several challenges, and many startups will need to adapt to survive.
Here are some of the reasons why VC money is drying up for restaurant tech:
The rising cost of capital: The Federal Reserve has been raising interest rates to combat inflation. This has made it more expensive for startups to raise money, as investors demand higher returns.
The increasing scrutiny of restaurant tech startups by investors: Investors are becoming more cautious about investing in restaurant tech startups, as they have become increasingly aware of the risks involved. Many restaurant tech startups have failed to live up to their promises, and investors now demand more evidence of traction and profitability before investing.
The economic downturn: The global economy is facing several headwinds, including the war in Ukraine and the rising cost of living. This is causing businesses to tighten their belts, and they are less likely to invest in new technologies.
Tech Stack Going Opensource - more and more restaurants are beginning to self-develop their tech stack with more and more devs and platforms available; it’s no longer an insider’s club for building your own tech. This trend may continue to even more exposure as Web3 and blockchain begin to create a new layer on the next internet.
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