Restaurant Ideas Robots Have Struggled. Is The Kernel Bucking The Trend?
Last month, the NY Post reported that Chipotle founder Steve Ells plans to return with an auto-heavy restaurant concept called Kernel.
According to the Post, which viewed the site of the first steakhouse, Ells plans to build a chain of restaurants that serve food in ghost kitchens and serve food in small grocery stores. The central production area and restaurants will include a large amount of robots and automation to produce food and keep the number of workers low. According to materials reviewed by the Post, the company says it believes “the three-person workforce model can work.”
The company has already started building its manufacturing facility in NY and plans to launch its first restaurant in NYC in the fall of 2023. Ells is currently funding the company but is looking for investors (that’s why it’s an investor site).
As I wrote yesterday, robot restaurant concepts tend to struggle. But given Ells’ experience in building a highly successful restaurant chain, it’s worth asking: Will Kernel buck the trend?
I think they might. Here are a few reasons Kernel might have a chance to succeed where others have failed:
Ells is a Proven Restaurant Operator
Unlike the founders of Eatsa, Spyce and Zume, Ells is a restaurant manager with a proven track record of building a restaurant brand from the ground up. During his time as CEO of the company, Chipotle pioneered this concept of fast and had one of the most successful IPOs in the restaurant market. Clearly, he knows something about creating restaurant concepts.
Ells Has an Intuitive Understanding of Food Unit Economics
In the early days of Chipotle, Ells was focused on the economics of the burrito business unit, calculating how many he needed to sell each day to make a profit. It is that kind of focus on the different costs that is necessary when predicting the cost of building a self-service restaurant business that will have high capex costs but, in the long run, should ultimately create more efficient restaurants with lower daily operating costs, and cannot run into a major employee benefit problem.
The Hub & Spoke Model Can Work If Done Right
Some ghost kitchens have struggled for a variety of reasons ranging from low to high costs. However, fast-casual products have proved a logical pairing with mid-sized commissary kitchens, especially in rental markets like NYC (where Kernel plans to open more locations). Chains such as Fresh&Co have grown leading concepts throughout metropolitan areas such as NYC by using centralized batch cooking of ingredients and doing final preparation in small-footprint storefronts. If Ells can use automation to take over most of the food preparation and save money to invest in a large number of smaller stores, he may prove this model as a recipe for the future.
Don’t build them, Rent them
While many of the early funded robot restaurant concepts spent most of their money building proprietary platforms, today, a restaurant builder can use any platform available to incorporate it into their food production and food service workflow. One need look no further than a small operator like Andrew Simmons to see that restaurants can be built by integrating systems that use robotic payment structures, reducing the overall capex required and allowing flexibility to create workflows over time as needs change and lessons are learned. My guessis has is has is is is is is is is is a the Ells are designing systems to benefit from others have paid all the upfront development costs, and would be the customer benefiting from the service and maintenance agreement.
There are still many unknowns about the Kernel concept, including what automation platforms they plan to use (or create) and what the consumer experience will be like. But if Ells demonstrates the ability to build a product from his Chipotle days that wasn’t as flexible and flexible in building a production workflow that has a lower capex hit than the first robot restaurant efforts, he may be on his way to building one of the real robot restaurant chains.
