Will fears of robot overlords taking over the world start with acai bowls? A startup called Kernel is the latest venture that will leverage robots to improve efficiency and cut costs. Steve Ells, the founder and former CEO of Chipotle Mexican Grill Inc. (NASDAQ: CMG), announced his return to the industry with a dining experience featuring a meat-free menu and robotic automation.
Scheduled to open its first location in Manhattan, New York, Ells and the Kernel team have ambitious expansion plans, with at least a dozen more restaurants slated to pop up across New York over the next two years, according to a report in The Wall Street Journal.
In March 2020, Ells stepped down from the Chipotle board as CEO Brian Niccol assumed the role of chairman. Ells started Chipotle in 1993.
Kernel's approach includes using robotics and human staff members to optimize operational efficiency and reduce waste. Each restaurant will operate with a skeleton crew of three people, working in harmony with robots. They will offer a menu featuring meat-free burgers, faux chicken sandwiches, salads, acai bowls and sides such as cucumber with wild rice. A typical Kernel meal might include a veggie burger with salsa verde and pickled onions on a toasted brioche bun accompanied by crispy potatoes on the side.
A key element of Kernel's innovation is its investment in robotics to handle various aspects of food preparation that are typically managed by a human. A customer's order triggers a series of automated actions. For example, a robotic arm places food-laden pans into the oven, a programmed toaster flips a bun for warming, and conveyor belts move dishes through the kitchen.
Human workers add the finishing touches to the dishes before packaging the food and placing it in cubbies for customer pickup. Ells emphasized the strategic reduction of human interaction while maintaining just enough for a personalized touch, telling The Wall Street Journal, "We've taken a lot of human interaction out of the process and left just enough."
Ells launched Kernel with $10 million of his own capital and secured an additional $36 million from investors. He appointed Stephen Goldstein, a food delivery industry executive, as president of the company, signaling a strategic move to blend innovation with industry expertise. Goldstein previously served as chief operating officer for food delivery startup Wonder and Deliveroo, a London-based grocery and restaurant delivery firm.
Kernel's introduction of robots aligns with a broader trend in the fast-food industry, where companies seek ways to cut costs amid rising food prices and wages. The challenge of hiring staff and improving efficiency leads firms like White Castle and Chipotle to explore automation technologies.
In response to increasing minimum wages in states like California, Ells affirmed that Kernel would reinvest efficiency savings into higher salaries and improved benefits for its staff, differentiating itself from other fast-food chains.
Beyond economic considerations, Ells sees Kernel as a step toward reducing greenhouse gas emissions, drawing inspiration from Bill Gates's book "How to Avoid a Climate Disaster." The menu emphasizes legumes and vegetables over newer plant-based meat alternatives, contributing to a more sustainable approach to fast food.
The chain's approach reflects confidence in demand for the plant-based meat market, with analyst firm Data Bridge Market Research pegging the market at $5.37 billion in 2022. The market is expected to grow to $16.55 billion by 2030 at a compound annual growth rate (CAGR) of 15.1% during the forecast period.