AI in Restaurants: Why it's booming, how it's being used, and real-world results
What's inside
Is artificial intelligence (AI) becoming a real thing in restaurants? According to Popmenu’s 2024 study of 362 U.S. restaurant operators, 79% have implemented or are considering AI for everything from taking orders and preparing food to business operations and marketing.
Pairing nationwide research with tasty real-life examples, this report explores the market dynamics accelerating AI adoption, how the technology is being applied online and on-premise, and the impact on operators and guests. The report also dispels popular myths, identifies pitfalls to avoid, and shows you how to grow your business automatically.
Let's get started.
First things first, what is AI anyway?
In simplest terms, AI is technology that can perform tasks that typically require human intelligence. Think answering phones or managing a waitlist, for example.
In the case of Ruby’s Jamaican Kitchen, AI is exercising creative muscles. Owner Bridgett Richardson works 18 hours a day to make authentic food from scratch and run her restaurant—which leaves little to no time for marketing. One day, she saw a mad rush at lunchtime and couldn’t figure out why they sold out of a less-popular dish, brown stew, in under 2 hours. Bridgett later learned that her husband began using an AI tool that automatically creates a full month of emails, texts, and social posts based on the dishes, reviews, and events on their website. That day, the tool promoted brown stew in a text to guests.
What’s more, once the technology launched, revenue from Ruby’s Jamaican Kitchen’s marketing efforts jumped from an average of $2,000 per month to $6,300 in February and then doubled from there.
Why AI is playing a bigger role in hospitality
There are three key reasons why more restaurants like Ruby’s Jamaican Kitchen are looking to AI to support their business:
Labor issues
AI is helping restaurants to bridge a labor gap that continues to impact service and drive up payroll expenses. Restaurants reported a 34% average increase in labor costs in 2023, an issue exacerbated by ongoing minimum wage legislation. Today, 60% of operators are having a difficult time filling jobs and 39% have lost revenue opportunities due to a shortage of staff.
Are you having a hard time filling certain roles?
No
Yes
Have you lost revenue opportunities because you can't fill open roles?
No
Yes
Lack of time
A byproduct of the labor gap is the need for operators to juggle even more responsibilities, often putting other priorities on hold. When asked what they would focus on if they had more time, operators ranked training and developing staff highest (62%), followed by planning and executing marketing (58%), and tracking business results and strategizing on how to grow (47%). By automating functions, their “to do” list shrinks.
What do you wish you had more time for at your restaurant?
Train and develop staff
Plan and execute marketing
Track business results and strategize on how to grow
Manage budget and inventory more effectively
Greet guests and check on tables
Recruit new staff members
Create or evolve dishes
1 in 4 operators wish they had more time to actually cook.
Budget-conscious consumers
Competition for guests has intensified over the last several months as a prolonged struggle with inflation tempers their spend. Although restaurant industry sales remain healthy, consumers today spend 30% of their individual or family food budgets on restaurants each month, on average, down from 40% in May 2022. Operators are not only competing with each other, they’re also competing with refrigerators at home.
Percentage of consumer food budgets that are spent on restaurants each month, on average
40%
2022
30%
2024
Benefits of AI, according to operators
While tech companies are only scratching the surface of what’s possible for AI, restaurant operators say there are tangible benefits already at play in terms of revenue and profitability, quality and speed of service, and better experiences for staff and guests.
90%
Make my day and my staff’s day easier
65%
Increase margins and profitability
61%
Increase revenue
54%
Reduce errors
53%
Improve speed of service
49%
Improve the guest experience
How restaurants plan to use AI: calls, reservations, and orders
Operators say they are open to using AI to help them in a variety of ways, including keeping guests engaged and staying on top of ordering needs:
75%
Answer questions on my restaurant website/app
62%
Answer phones
31%
Manage tables, reservations, and waitlist
30%
Take in-person orders
Dos Salsas, a 3-location restaurant in Texas, used AI phone answering to field 41,000 calls with custom responses and save 308 hours for staff. The technology, which promotes specials and instantly sends links for orders and reservations, helped generate $440,000 in online sales and book 5,800+ reservations for the restaurant.
Local’s Pub & Pizzeria in Wasilla, AK, saw a 132% increase in online orders within 90 days just by answering the phone more often (with AI tech).
How likely are you to encounter a robot chef or delivery driver?
14% of operators are considering AI for food preparation while 16% are considering drones for delivery.
How restaurants plan to use AI: marketing
When asked to identify their biggest marketing challenges, the most common responses among operators were “I don’t have time” and “I don’t know what to say.” From building marketing calendars and copywriting to understanding customers better, operators are finding value in AI’s ability to consistently and automatically promote their restaurants to guests. The majority are interested in adopting AI to:
74%
Create marketing content
68%
Automate marketing messages to guests
64%
Gather information on guests’ preferences
79% of operators would rather edit marketing content instead of create it from scratch.
Earlier, we shared how Ruby’s Jamaican Kitchen uses AI to create a month’s worth of emails, texts, and social posts that are specific to their brand. Fado Pub & Kitchen, located in Dublin, OH, implemented the same tech, stating that it used to take them 4 to 5 days to build their marketing content each month. With AI, it takes less than 2 hours.
Restaurants are using tech to stay in front of guests and personalize messages based on preferences and behavior. GIOIA Pizzeria in northern California has collected contact information and preference data for over 15,500 guests and earned more than $200,000 in online ordering revenue through targeted marketing. One guest received 66 emails (45 automated) and spent $8,100.
How restaurants plan to use AI: business operations
As operators contend with heightened competition, labor headaches, and high food costs, more are considering AI to monitor demand, spend and return, and guide business decisions:
57%
Analyze business performance
45%
Manage inventory and purchases
40%
Schedule staff
38%
Determine demand-based pricing
33%
Predict peak ordering times and corresponding popular dishes
With the help of automated performance tracking, Tunji Junard, CMO and Co-founder of Steam Boys in Tennessee, sees how marketing campaigns influence website traffic and sales, so he can double down on efforts that have the largest impact. Using these business insights, Steam Boys generated over $61,000 in online sales through a special offer strategy.
The same tech has helped the owner (and sole marketer) of Ocean State Sandwich Company drive over $70,000 in online sales while creating more time back to focus on other priorities.
Popular AI Myths
All of the success restaurants have seen with AI might make it sound too good to be true, so what are some of the biggest hesitations some operators might have when it comes to implementing this new technology?
Myth: Guests won’t like it
Busted: Consumers widely report openness to engaging with AI at restaurants, especially if the alternative is no service or outreach.
Myth: AI is complex
Busted: Many tools are designed to be incredibly user-friendly. Some have you speak to it like you would another person, others run off the push of a button.
Myth: AI is expensive
Busted: While the most effective tools are going to come at a cost, the returns restaurants see from their use of AI are often well worth the investment.
What to be aware of:
When weighing AI solutions, consider how well they integrate with and learn from your existing systems. While free solutions like ChatGPT might be helpful for brainstorming, without extensive information from your restaurant it’s likely to pump out generic copy that sounds similar to everyone else using the tool (Taco Tuesday, anyone?).
On that same note, recommendations from AI are only as good as the data that goes into it. Limited or incomplete data on guest interactions, campaigns, or ordering trends (courtesy of disparate systems) can compromise the quality of business analysis and recommendations.
Psst…Popmenu offers AI solutions that connect seamlessly with your online ordering system and website, incorporate billions of guest data points, produce custom content, and track results in real-time.
That's a wrap
The restaurant market is more competitive than ever, and operators are short on time and resources. Adoption of AI technology will continue to grow as operators look to mend labor gaps, attract more guests, and make their business more efficient and profitable. The majority of operators (70%) expect AI to become a staple in restaurant operations in the future…which may not be too far away.
Methodology
Popmenu conducted an anonymous survey of 362 U.S. restaurant owners and operators from April 5 to April 26, 2024. The survey included single-location and multi-location restaurants of all types across regions.
Popmenu also conducted an anonymous, nationwide of 1,000 U.S. consumers, ages 18 and older, from April 16 to April 17, 2024.
About Popmenu
As a leader in restaurant technology, Popmenu is on a mission to make profitable growth easy for all restaurants. Digital marketing, online ordering, and on-premise technologies headline a powerful product suite infused with artificial intelligence (AI), automation, and deep data on guest preferences. The company consolidates tools needed to engage guests, serving as a digital control center for more than 10,000 independent restaurants and hospitality groups in the US, UK, and Canada. For more information, visit popmenu.com.
