The Future of Food Service
Artificial intelligence (AI) and related technologies are transforming the way food service operators work. Advanced analytics, forecasting, automated procurement, improved font of the house operations. You name the function, and you'll find multiple tech companies seriously working on it.
The digital transformation of food service represents significant potential advances for the industry.
A 25-75% food waste reduction – millions of dollars in savings – automated ordering process, streamlined food risk management ensuring no incidents, to name a few.
But, except for a handful of organizations, the industry is slow to take advantage of these new, cost-saving opportunities, especially for back-of-the-house operations.
Most food service organizations still rely on expensive, error-prone legacy processes. This industry inertia puts pioneers in a great position.
But before we move on, let’s drill down on some definitions.
Definitions of terms:
1. Digital transformation — A business ecosystem with the predictive capabilities of integrated technologies, big data, and advanced analytics reduce costly errors and spits out business growth insights.
This transformation doesn’t happen overnight. It’s a function of digitization and digitalization, which is why you should start working on it today.
2. Artificial intelligence (AI) — focuses on developing systems that can act and execute ‘intelligently.’ The main goal of AI is to enable task completion with built-in ‘learn and grow’ capabilities without human interventions.
3. Machine learning (ML) is a subset of AI. ML learns from data and can be ‘trained’ to predict results and optimize outcomes. It’s not ‘nearly sentient & autonomous’ as AI is, but it does the job.
Digital transformation means drawing accurate, actionable, and timely insights from integrated tech solutions. In a digitally transformed environment, all processes & systems across the value chain interconnect and ‘talk.’ There are no data silos that hide valuable data. This way, tech solutions can sift through millions of data points to make strategic business suggestions at all levels.
Why Digital Transformation in food service?
Start now; a business-wide digital transformation doesn’t happen overnight.
We’ve talked to hundreds of food service executives over the last few years, and what’s keeping them up at night falls into three broad categories:
· Keeping your supply lines open — supply/demand imbalances due to COVID and the war in Ukraine are not over, and everyone in Supply Chain has their hands full dealing with the consequences.
· Managing inflation — there’s little room to maneuver on menu prices. Your success depends on cost efficiency.
· Eliminating human errors — from menu engineering to procurement mistakes you don’t know about until you do an audit. It all adds up.
This is all high-level stuff. Working on it with spreadsheets and legacy systems is not the best way to tackle it. It gets twice as difficult when you’re doing it for hundreds of individual units.
At its core, digital transformation lets you do your job faster, better, and leaner. There are two reasons why you should start planning to adopt it:
1. Everyone’s thinking about it, but most players are still out — big chains are testing business applications of AI, almost exclusively in front-of-the-house activities. They are still trying to figure out how to implement it into existing processes. That´s where significant opportunities are; the full potential of digital transformation depends on new approaches that leverage the latest technological capabilities.
2. It takes time to achieve digital maturity — transformation doesn’t happen overnight. You need to test, iterate, experiment, fail, and test some more. There´s plenty of opportunity in back-of-the-house functions. The sooner you start, the better.
Get your foot in the door sooner, and you will reap the benefits of digital transformation:
· A level playing field between yourself and emerging, digitally native competitors.
· New business models to turn to when digitally native technologies are fully leveraged.
· A ‘fail fast’ mentality that results in quick turnarounds for ‘go-to-market’ initiatives.
· Access to innovative products/services to replace aging concepts.
· End-to-end visibility of your value network.
Wouldn’t that be something?
At Nazar, we strongly believe in the power of back-of-the-house operations. Tracing the entire end-to-end supply chain holds significant opportunities, and we are working very hard to make that happen.
We would love to chat if you want to learn more about end-to-end traceability! Feel free to reach out!
Elcio Grassia has 44 years’ experience as an entrepreneur, independent consultant and executive, in companies such as Nestlé, Martin-Brower, McDonald´s and Havi Global Solutions, having lead projects in restaurant operations, logistics, supply chain strategy, process reengineering, benchmarking and systems restructuring.