Since March, the restaurant industry has struggled. Lockdowns suddenly forced many restaurants to close or rapidly shift to delivery services. When re-openings occurred, most allowed limited capacity only, which continued to handcuff revenues and operations. And of course, consumer concerns about exposure to the coronavirus further reduced patronage to many restaurants. Over the course, many have invested in restaurant innovations like QR codes for menus and sanitizing systems. But these new strategies have only taken restaurants so far. But one new concept may prove to be an answer to these ongoing challenges: automats.
Automats are automated restaurants that allow customers to order a meal from a vending-machine system. Naturally, automats have some appeal during a pandemic because it greatly diminishes human contact exposure. Throughout North America, more and more of these automats are popping up. And investors are beginning to see the tremendous potential these recent restaurant innovations have. But what’s even more surprising is the fact that automats are new. In fact, they’ve actually been around before for over a century, dating back to the late 1800s.
“At the end of the day, people eat in restaurants for an experience, and we’re moving away from that because we have to.” – Stephen Zagor, Consultant and Professor at Columbia Business School
The Intriguing History of Automats
You might find it hard to believe, but automats were first introduced in Berlin in the 1880s. Rows of cubbies with glass doors were constructed much like an old post office. Within these cubbies, a variety of sandwiches, hot meals, and beverages were offered that were made to order. Customers simply deposited a coin, collected their food, and they were on their way. The remarkable convenience and low-cost of these restaurant innovations eventually led to their presence in the U.S. It wasn’t long before they appeared in Philadelphia and then New York City, much to the delight of many customers.
Horn and Hardart opened the first of their automats in 1902 in Philadelphia. They then expanded their operations into New York a decade later in 1912. The fast-paced lifestyle of these cities meshed well with these restaurant innovations. For 5 to 10 cents, workers could grab a quick, hot meal, pay no tip, and be on their way. At their peak, the company had 80 automat locations, gaining in popularity after the Spanish Flu and the Great Depression. But by the 1950s, inflation and the rise of fast-food chains like McDonald’s ushered in their decline.
“We think [automats are] the next big thing. It’s going to grow really big, really fast over the next five to seven years.” – Dan Rowe, CEO of Fransmart
Automats Version 2.0
It’s not surprising that the automats making a comeback today look a bit different than those of the past. But the concept of these recent restaurant innovations is essentially the same. Most automats take advantage of smartphone ordering or touchless kiosks. Likewise, many employ misting sanitation systems and/or ultraviolet light for food cubby disinfection. And several are employing automated robotics to facilitate food order preparation and cubby placement. All of these features not only offer convenience and affordability but consumer safety as well. And during a pandemic, customers are willing to pay a premium for this.
In the last few months, several new automats have appeared. In fact, some were already in developing before COVID struck. The Brooklyn Dumpling Shop utilizes artificial intelligence and robotics in its automats. It has also recently signed with Fransmart, a franchising development company, to expand to 500 franchises over the next decade. Box’d is a Middle Eastern food concept automat chain promoted by Paramount Fine Foods. And Dark Horse Coffee Shops in Toronto are fully automated operations offering premium coffee and pastries. These are just a few of the companies investing in these types of restaurant innovations.
“We’re not looking to replace our cafes. We still believe in cafes, and we still believe people will want to come back to cafes in the long run. We believe in innovation, too, especially during COVID. And so, this is something that can exist alongside our cafes.” – Max Daviau, VP of Retail, Dark Horse Coffee
Lasting Innovation or Temporary Trend?
Notably, investing in these restaurant innovations has some risks. Should a coronavirus vaccine or other effective COVID therapies be developed, automats may lose their appeal. But many in the restaurant industry do not see this as likely. Many companies had already begun advancing the concept of automats before the pandemic with some success. Likewise, both the availability of robotic technologies and the lower expenses of automats are attractive. For these reasons, some foresee automats as being simply a new restaurant option for consumers.
An additional concern is whether automats might replace human workers in the restaurant industry. Many restaurants have been forced to cut staff in light of the pandemic. Therefore, adding robots to provided automated meals could impact this further. However, many see automats not as a replacement but as an addition to existing offerings. Individuals who enjoy the dining experience will still indulge in the restaurant experience. Automats simply provide an additional option that might be attractive to some consumers at certain times. Likewise, even with full automation, a human touch is needed. In all likelihood, restaurant workers will embrace new roles, but they aren’t likely to be replaced.
Coming to a Location Near You
As noted with Fransmart, major investors are banking on the growth of automats over the coming years. Like many pandemic-driven businesses, these restaurant innovations will attract consumer interest now and possibly shift dining behaviors in the future. If this is the case, then automats will begin appearing everywhere from coast to coast. With easy access and convenient efficiency being their main selling points, automats do have notable advantages. Combine this with automation and quality offerings, it’s quite likely automats will find their own niche in the restaurant dining landscape.
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