Reinventing the food industry can be fraught. Because labor is fairly cheap and the taste is so important, food may be one realm where people do not mind getting stuck with version 1.0. That hasn’t stopped some Silicon Valley brands from trying to add technology into the mix, though.
Zume Pizza, a tiny start-up that is a few miles from the sprawling headquarters of Google, wants to redesign the way pizzas are made. Zume has programmed robots to make pizzas that are put into a van and baked while making their way to customers. Ovens are timed to finish cooking in sync with the vehicles’ arrival at their destination, so the pies are always piping hot.
In recent weeks, spies from rival pizza companies and food-delivery firms have been driving by in unmarked cars taking photographs of the office and the vans, said Julia Collins, one of Zume’s co-founders. To protect its business, the start-up has patented its process.
The company is in Mountain View, but has expansion plans. Since its founding last year it reportedly has raised $6 million from investors, among them Jerry Yang, a co-founder and former boss of Yahoo.
Tech entrepreneurs have had their eye on the food industry, but their principal focus has been on delivery services or payment systems. Actually making the food is a fresher opportunity. Restaurant chains have been slow to invest in technology because the cost of labor usually is fairly cheap, said John Glass, an analyst at Morgan Stanley.
And tech is not easy. For example, grilled cheese fast-food chain the Melt boasts about its technology that keeps the sandwiches warm, developed with former NASA engineers. It has struggled, and has replaced its CEO.
Zume and others, even if they are at the cusp of a shift to robots in restaurants, find it hard to achieve scale. The company’s robots cost about $100,000 each, which is the equivalent of hiring two experienced employees for a year, said Alex Garden, Zume’s other co-founder. So while Zume said buying them pays off rapidly, it is capital-intensive for a digital company.
At the same time companies like Zume are trying to build technology on the front end, tech-enabled delivery services are growing as well, offering another cost-savings route. Plus, competition is fierce. While pizza fast food is worth an estimated $34 billion a year annually in the U.S., Domino’s, Pizza Hut and Papa John’s have taken even more of the market in recent years. It will take a long time for Zume to make any dent in the share of big established brands.
Copyright 2013 The Economist Newspaper Limited, London. All Rights Reserved. Reprinted with permission.