Restaurant operators juggle ever-changing guest expectations and the many things that can "go wrong" daily. So, when adopting technology like artificial intelligence (AI), their main question is, "How can this truly help my day-to-day operations?"
AI in restaurants often enhances jobs rather than replacing them. Marketing AI assistants can help create campaigns, but managers need to provide input and final approval. AI streamlines operations, freeing staff to focus on delivering great hospitality.
Pre-2020, restaurant success was simple: Serve great food with excellent service. Now, it also requires a robust digital presence. In late 2022, generative AI became one of the most talked-about technologies in a generation. Let’s demystify the AI hype by looking at a few of the various real ways the restaurant industry may think about utilizing this tech in the near future.
AI-powered benchmarking for competitive pricing and operations
Many restaurant operators lack the time to benchmark or compare their performance against their peers. AI-powered tools can provide next-level benchmarking insights, allowing operators to quickly compare their performance with eateries in their area and understand local market dynamics across menu items and operational metrics.
AI and machine learning can be used to help categorize hundreds of millions of menu items. It can help benchmarking tools determine how to appropriately categorize specific items — such as whether a whiskey donut is a dessert or an alcoholic beverage. After all, no two restaurant menus are the same.
In Toast's recent Restaurant Trends Report, we explored the popularity of lunch foods at quick-service restaurants.
Hot dog sales dipped 9% in Q2 2024 compared to Q2 2023, while prices only increased 1.9% year over year. This dip could suggest that consumer eating habits have changed or that prices have reached a point where guests are no longer comfortable paying.
Couple this with bowls, a healthier option than hot dogs, which rose 1% in popularity in Q2 Q2 2024 compared to Q2 2023, and prices rose 4.6% in the same period.
Crucially, tools powered by AI can help restaurants with the perennial challenge that they frequently face: “Am I pricing my menu correctly?" AI-powered benchmarking can help them analyze their prices and better understand how to optimize their menus in order to stay attractive to customers while improving revenue.
Optimized menus for an enhanced dining experience and better profitability
AI can also provide valuable menu recommendations by leveraging data from similar establishments, helping them optimize their offerings. By analyzing restaurant data and market trends, AI can identify popular and profitable dishes, allowing operators to optimize their menus, improve satisfaction, and encourage repeat business.
Chefs can also reap significant benefits from AI. The technology aids in making informed decisions about menu changes and additions, helping menus remain exciting and relevant, and helping avoid over or underreacting to the newest trend.
AI-driven menus or suggestions from their server can direct diners toward popular and well-liked items they will most likely enjoy and toward higher-margin items, streamlining the experience and saving servers time. This can lead to quicker service, enhance the overall dining experience, and foster a connection between the diner and the restaurant, encouraging repeat visits and increasing average order value.
Cart recommendations for “always on” upselling
Rather than picking up phones, diners largely order pick-up or delivery digitally, making AI-powered cart recommendations is crucial for time-strapped restaurant operators and consumers alike. By leveraging predictive analytics, AI can analyze past purchases and trending items to suggest additional dishes or drinks.
AI can make real-time upselling smarter, modifying suggestions based on inventory, time of day, and weather conditions. For instance, on a hot day, the system might suggest cold beverages or ice cream. Increasing sales through tailored suggestions can be a game-changer for operators who often face thin profit margins.
Forecasting and reducing food waste for a better world
According to the USDA, over one-third of all available food goes uneaten. We see AI as a powerful tool to address waste in the restaurant industry, which is ultimately a drag on margins. Predictive AI could one day equip operators with demand forecasts, helping them adjust purchasing and inventory management to prevent over-ordering and spoilage.
The benefits go beyond reducing expenditures. They may potentially also include decreasing the risk of enduring governmental fines (there are some local governments enforcing fines for not disposing of food waste properly) and lessening the environmental impact of wasted ingredients.
Additionally, AI could be used to track and analyze kitchen food waste patterns and customer behavior, revealing which ingredients are often discarded and why. This allows chefs to adjust recipes to reduce prep waste and optimize portion sizes to better meet customer preferences, further decreasing waste on the plate without reducing demand, which can be a tricky consideration when it comes to portion sizes without being very data-driven.
Intelligent support that gives immediate and accurate answers
Restaurant operators with a tech question may in the future utilize AI chatbots to get the answers they need immediately without having to spend time on the phone in the back office or searching through documentation to find the right answer.
Whether it’s on mobile or web, AI chatbots can help answer operators' questions based on existing articles and content, so they can spend more time with their staff and guests, and less time searching for a solution.
Tools for helping operators thrive
The restaurant industry's "AI moment" has arrived, and it can help operators who embrace it deliver exceptional dining experiences on-premise and at home. As AI advances, its role in the sector can help improve operations and the ways we think about technology’s role within a restaurant.
AI is not merely a trend but a transformative force that can redefine the dining experience. Embracing these technological innovations can help restaurants not only stay competitive but also thrive in a rapidly evolving market.
AUTHOR BIO
Steve is the President, Co-founder, and a Director of Toast, where he leads product and innovation initiatives. Prior to Toast, he was involved in a number of entrepreneurial endeavors, including competing with Facebook while it was still a project out of a Harvard dorm room, and being an early pioneer in iPhone app development. He was also an “intrapreneur” at Endeca, helping to lead the Special Operations team that was instrumental in launching Endeca’s business intelligence platform and founding the Endeca mobile commerce business. Steve holds a B.S. degree from MIT.
This information is intended for informational purposes only, and not as a binding commitment. Please do not rely on this information in making your purchasing decisions. Some, but not all of the AI concepts discussed in this article are currently offered by Toast to customers. The development, release and timing of any products, features or functionality remain at the sole discretion of Toast, and are subject to change.
