AI and Machine Learning Enter the Kitchen at Chipotle – QSR magazine

San Jose, California-based Hyphen’s first product, “The Makeline,” is an automated system that uses robotics and a customized operating system to give kitchens a “reliable and precise way to make a fulfill orders,” Chipotle said at the time. The hallmark is it assembles all digital orders under the counter via automated production while allowing staff to assemble in-house orders from the top of the counter.

Garner said it reimagines “the intersection between makelines and digital kitchens.”

In Q2, Chipotle’s systemwide sales lifted 17 percent year-over-year to $2.2 billion, and same-store sales grew 10.1 percent. Through mid-May, comps were projected to reach the high end of previous guidance (10-12 percent), but numbers decelerated toward the back end of the quarter, which Chipotle attributed to a combination of macro pressures, normal seasonality of college-based stores, and handling growth with a relatively new workforce.

Chipotle launched an ops initiative to retrain workers on the fundamentals of business and implemented a new labor management tool to ensure the right number of employees are scheduled during certain parts of the day.

The brand also installed customer-facing PIN pads to promote faster and contactless payment options, deployed a new learning management system to provide e-learning courses, updated its POS hardware, and made computer programming enhancements to improve accuracy and throughput.

Getting more out of labor remains a key directive as turnover rates press the industry and the overall job pool sits 600,000 or short of pre-COVID levels. Labor costs in Q2 were 24.8 percent for Chipotle, up 30 basis points from 2021 due to the chain’s decision in May of last year to grow wages.

Chipotle’s hourly (crew, kitchen manager, service manager) turnover rate hit 194 percent in 2019, up from 141 percent the prior year. As noted, it raised average hourly wages to $15, added referral bonuses, and spent time refining pathways for advancement in response. Additionally, crew members can now become “restaurateurs,” which is what Chipotle calls its highest GM role, in as little as three and half years. If they get there, earning potential hikes to $100,000.

Chipotle took a 4 percent menu price increase in August to mitigate pressures.

And as this evolves, the brand will work toward streamlining operations to match its throughput goals. The fast casual said in July it wanted to reach 2013/2014 throughput levels, back when restaurants were fulfilling orders in the high 20s to low 30s on a per 15-minute basis. Chipotle laid out this goal in 2019 and it began to pay dividends in early 2020 before COVID hit.

CEO Brian Niccol said in Q2 said some stores—with teams that have been together for years—were earning $5 million to $7 million, proving restaurants have “tremendous upside” when efficiency is at its best.

“We’re confident that if we can get our team members to understand what it means to be, call it, rush-ready in their places and ready to go, there’s no reason why we can’t get back to those high 20s, low 30s on a per 15-minute basis,” Niccol said.

Chipotle, which opened 42 restaurants in Q2, 32 of which were Chipotlanes, and expects to debut 235–250 this year, reported average-unit volumes of $2.8 million last quarter, with 39 percent owing to digital. It’s tracking toward $3 million plus and even above $4 million at some point, Niccol said.