How AI will transform restaurants

By Christian Berthelsen|Apr 5, 2024|7:04 am CDT

Over the last 12 months, the adoption of AI within the restaurant industry is the single most common topic of conversation I have with our customers. As a career-technologist leading a tech company, it’s unsurprising that AI is something I am heavily invested in. But you may ask why our partners in industry are placing so much emphasis on their own AI adoption strategy. I believe our customers have come to the same conclusion as I have – AI is set to transform the restaurant industry.

The AI imperative

Running a successful restaurant business has always been challenging. Margins are tight and the imperative to increase efficiency is always front of mind. It is well documented how tough the last few years have been, and those challenges are still with us in 2024.

Demand volatility, rising operational costs and supply issues are eating into profits, even as sales rise – we call this ‘profitless growth’. A raft of legislative changes increase costs and force operators to constantly adapt to new rules and regulations. Add to that the growing admin burden that keeps managers tethered to their computers for huge chunks of their shift, and you have an industry still looking for new ways to relieve some of the pressure.

This is where AI comes into play. With the ability to predict demand, automate tasks, optimise processes and provide real-time decision support, it provides solutions to an industry looking for new ways to combat rising costs and volatile operating conditions. The potential applications of AI are endless, it can be used to accurately predict revenue, anticipate exactly which menu items will sell and in what quantities. It can then optimize employee scheduling, purchasing and preparation to ensure customer demand is met as efficiently as possible. AI can be embedded directly into the systems and applications already in use in restaurants.  Soon, Generative AI copilots tailored to restaurant use cases will emerge to provide conversational decision support to teams throughout the entirety of restaurant operations.

As AI adoption becomes mainstream, and leading operators start to leverage the technology effectively, the competitive advantage it offers will become more noticeable. Operators that embrace AI and succeed in applying it to their specific use cases will cut inefficiencies, maximise profits and give their teams more time to focus on what they do best. Restaurants are inherently human businesses, and deploying AI to handle repetitive admin tasks frees up workers to perform uniquely human jobs, such as maximising guest experience.

How to embrace AI

For restaurant operators set on embracing AI, how to go about it is the first hurdle. There is no shortage of Machine Learning (ML) technologies, capable of prediction and forecasting, while tools for Generative AI, like ChatGPT, have exploded in popularity. These technologies have broad applicability to restaurants, but successfully training and implementing them for specific use cases still requires a significant degree of technical knowhow and investment.

The question of how to adopt AI is often framed as ‘build vs buy’. In reality, outside of the tech sector, building a truly in-house AI capability is only practical for a select few companies. We know from our own experience at Fourth the effort and determination required to build solutions that truly generates value, such as our highly successful AI Forecasting.

For most restaurant operators, working with a technology partner is a far more practical and cost-effective approach to adopting AI. Even then, there are two broad options to consider:  generalized tools v domain specific solutions.

Generalised tools may seem attractive by offering a cheap and flexible way to get started, but they still require technical expertise to embed into real-world processes, like scheduling or stock control. Moreover, since these tools are generalized, the AI models underpinning them lack industry specificity, which can significantly reduce their effectiveness.

For AI to deliver meaningful value for restaurant operators, it needs to be domain specific, trained on relevant industry data and embedded into existing processes and technologies.

The Fourth AI platform is built up from three core layers:

Data Foundation

As the name suggests, the ‘foundation’ of our platform is all about data. It seamlessly ingests and processes data in real-time from our customers data sources including EPOS, supplier portals, people and financial systems through an extensive set of integrations. External sources like weather and events can also be incorporated to enhance forecasting and planning. This solid ‘data foundation’ is not only fundamental to implementing Fourth’s well-established suite of solutions, it’s also the perfect basis for the application of AI.

 AI Engine

To embed AI across Fourth’s suite of solutions, we have built an ‘AI Engine’ to build, train and deploy AI applications. The range of AI applications available include machine learning forecasts, text-based document processing, recommenders for suggested ordering and recruitment ad optimization.

Our AI models are trained on the largest dataset in the industry, ensuring they deliver significantly greater accuracy and relevance over generic AI solutions. Fourth’s customers can further refine the effectiveness of the AI with their own proprietary data, creating outcomes tailored to their own business. Each AI model is periodically trained, ensuring they continue to learn and adapt to new data points and behaviours.

The primary benefit of the ‘AI Engine’ is that it makes it incredibly easy to embed AI into any of the Fourth solutions, with the same AI application often finding utility in multiple solutions (e.g. AI Forecasting). In essence, we have done all the heavy lifting for our customers when it comes to building the AI they need.  They can simply focus on using it through the Fourth solutions they already rely on for their restaurant operations.

AI Powered Solutions

Finally, we have the layer of the Fourth platform most familiar and tangible for customers, our AI-driven solutions. As a market leader in workforce and inventory management solutions, 1000s of restaurant businesses around the world use our solutions to power their operations.  Those solutions are now increasingly powered by AI, further increasing their ability to drive profits, maximize efficiency and empower workers.

AI-driven forecasting is core to our scheduling solutions, predicting demand to 15 minute increments throughout the day. AutoScheduling features can then be layered on top of this and will recommend optimal shift patterns. This ensures operators can maximize labor efficiency without understaffing and potentially jeopardising the customer experience. It also removes hours of weekly administrative work for managers, freeing them up to get out on the floor with their guests and staff.

Launching in Spring 2024, Fourth’s inventory solutions can also leverage AI forecasting to optimise purchasing, prep and stock control. They enable operators to reduce the administrative burden of manually optimizing ordering and inventory, while also controlling costs and avoiding food waste.

Looking ahead, we have a steady pipeline of new AI capabilities rolling out, with AI-driven ‘suggested ordering’ in our purchasing solutions among the exciting new features launching soon.

Fourth at the forefront of AI in Restaurants.

As restaurants continue to find new ways to thrive in the challenging circumstances facing our industry, I have no doubt that AI will only grow in importance as a transformational technology. I truly believe that every restaurant business should already be embarking on their own journey to adopt AI across their operations.

While this may seem daunting, or even unachievable, there is no need to do it alone. For decades restaurants around the world have relied on Fourth’s solutions to ensure they continuously deliver efficient operations across their workforce and inventory management. By introducing the Fourth AI Platform, we offer our customers a straightforward, yet impactful, means to embrace AI in a form that is tailored to their specific use cases. It will further supercharge their operations and set them up for success in the years ahead.

To find out how you can use AI to power the growth of your restaurant, contact the Fourth team today.