Artificial Intelligence

ResTech: Voice AI Ordering in the Restaurant Industry

If you’ve been reading about the technology explosion in the restaurant industry, you’ve undoubtedly come across voice AI. In fact, even if you haven’t been all that interested in ResTech, it’s still hard to miss. Some of the big players in this segment include Conversenow and SoundHound, companies that are industry pioneers and using voice AI to improve order accuracy, reduce wait times, simplify operations, and streamline the ordering process.

One of the areas gaining ground is drive-thru technology. Instead of a human, a voicebot takes your order. The theory is that customers will receive what they order without any mix-ups and in record time. Unfortunately, this hasn’t always proven to be the case. 

McDonald’s and AI-Powered Ordering Tools

One of the tools in voice AI is voice recognition. In 2021, McDonald’s partnered with IBM to develop and deploy AI software. That same year, Chris Kempczinski, CEO, noted that the technology was accurate about 85% of the time. 

On June 13, 2024, McDonald’s relayed to their franchisees that they were ending their AI trial in the U.S. The test period ends with over 100-drive-thrus removing their AI-ordering technology by the end of July. The plausible reason for their departure is simple: mistakes and viral videos. 

TikTok was the first to shed light on the challenges and frustration faced by customers when ordering in the drive-thru lines. In one TikTok video, a person ordered one large cup of sweet iced tea but received nine. In another, the AI voicebot decided to add bacon to ice cream. Yet another TikTok video showed women laughing as hundreds of dollars of McNuggets were added to their tab. Apparently, a sense of humor comes in handy when ordering from a voicebot.

Despite their setback, they’re committed to trying again in the future. 

IBM remains in the market, working with Dunkin’, Hardee’s, and Wendy’s on voice AI and drive-thru orders. Other brands considering the use of AI along the same lines include Del Taco and Carl’s Jr. According to The Wall Street Journal, Yum Brands, the parent company of KFC, Taco Bell, Pizza Hut, and Habit Burger Grill, is also taking an AI-first mentality.

AI and the National Restaurant Association

Food On Demand shared their take on the recent National Restaurant Association Show, noting the prominence of vendors in the AI-powered voice ordering sector. This technology aims to enhance a restaurant’s efficiency and effectiveness while reducing the still prominent labor pain point.

One of the standouts at the show was Givex AI. Based out of Toronto, Parker, their animated voice AI character, not only takes orders but also upsells and walks customers through the ordering process in kiosks and drive-thru lanes.

When asked what it recommended for a friend with a hangover, it replied, “I’m so sorry to hear about your friend. For a hangover, staying hydrated is the key. I recommend fresh juice, like orange juice.” 

And the world is transformed.

The Market and Voice AI

In a May 9 news release, Keyvan Mohajer, CEO of SoundHound, stated, “Voice AI is fast becoming a must-have tool for customer service, and that’s reflected in the demand we’re seeing for subscriptions.” The company reported a 2024 first-quarter revenue of $11.6 million, an increase of 73% compared to the previous year. Their income is derived through subscriptions and bookings, which showed a backlog of $682 million. This figure demonstrates a remarkable growth of about 80% year over year. The company also reported a net loss of $33 million and a cash balance of $226 million.

With its acquisition of SYNQ3, SoundHound has become the prominent provider of voice AI for restaurants. It currently has over 10,000 active locations, including Applebee’s and Church’s Chicken.

In general, some of the biggest players in voice AI to date include Amazon, Apple, Facebook, Google, Microsoft, and Nvidia.  

As the AI race continues, investors are keeping a watchful eye on the major players. With breakthroughs occurring almost daily and billions of dollars moving into the sector, the companies harnessing the power of AI are undoubtedly reshaping the restaurant industry. 

At EMERGING, we’re breaking through the hype and exploring which AI solutions are really benefiting restaurants. Ality is one such solution. Using a realistic AI voice, it understands the context of messages, condenses them, and relays them to the appropriate staff. For instance, it may direct a question like, “I have a guest that is a vegetarian and always orders the Avocado Toast but wants to try something different. What do you recommend?” to the appropriate employee for an answer.

Ality also listens to conversations with guests, sends suggestions, and reminds servers when they need to return to a table. 

It is a brave new world we live in with AI taking the lead. The EMERGING Fund is excited to be part of the process, diving deep into emerging groups and determining the best investments and partnerships in this crowded field.


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