IFMA forecasts operator spending for 2024. Taco Bell updates its Go Mobile prototype. Google unveils a robot while Brix Holdings tests a cobot. These stories and more This Week in Foodservice.

Foodservice operators will increase their spending by 0.2% in real terms in 2024, per the latest forecast from the International Foodservice Manufacturers Association. In addition, IFMA also projects foodservice industry inflation will increase at a rate of 5%, which means overall operator spend will increase by 5.2%.

IFMA based its projections on several key assumptions, including rising interest rates, labor shortages, and many white-collar employees continuing to work remotely rather than in the office.

Segments IFMA projects will grow in 2024 include c-stores, grocery, college and university, lodging, and hospitals, among others. Segments IFMA projects will decline to include midscale dining and casual dining, among others.

Foodservice News This Week

• Urbanspace is in the midst of restructuring its food halls, per a report by Eater. In April, Hospitality Firm became the new owner of food hall leader Urbanspace. The consulting company will now set out to restructure its food halls. In New York City location in the Union Square neighborhood, three new vendors joined the operation. The challenge food halls in urban areas face is the simple fact that customer traffic in many areas is not what it was prior to the pandemic and nor are traffic patterns as reliable as they once were. Despite these and other challenges, Hospitality Firm believes food halls remain viable.
• Google’s latest development has the potential to significantly transform the foodservice industry. Google’s Robotics Transformer 2 (RT-2) is a vision-language-action model that enables robots to perform novel tasks without extensive training, per a Food Institute story. By leveraging web data, RT-2 embodies adaptability and can transform the way people interact with technology in the culinary world. This breakthrough gives rise to context-aware robots that can perform a diverse range of actions with far less training, unlocking a new era of culinary creativity and personalized service.
• Add Brix Holdings to the list of restaurant companies kicking the tires on the use of robotics. The multiconcept operator is partnering with a robotics manufacturer on its latest culinary innovation. Brix is using collaborative robots to make pizzas. Sometimes called cobots, these “automated robots are specifically designed to work harmoniously and safely alongside staff in a shared workspace,” per a Technology magazine article. The robots can complement the intelligence and problem-solving capabilities of their human counterparts.
• Taco Bell says it’s on track to reach 10,000 units systemwide in the coming years, per a company release. Achieving such a lofty goal will require leveraging a variety of restaurant formats, including its Cantina and its Go Mobile locations. As the name implies, the Go Mobile prototype emphasizes orders placed via the chain’s app or other digital means. Go Mobile units measure 1,325 square feet, significantly less than the 2,500 square feet the average Taco Bell unit occupies. Go Mobile units also feature dual drive thru lanes, including one that’s a priority lane for customers who order via the chain’s app. Go Mobile units also use what the chain describes as a smart kitchen that’s integrated with its app and they offer curbside pickup. Go Mobile units don’t offer indoor dining but do include dedicated parking for mobile and delivery orders, an outdoor pickup window and grab-and-go-shelves. Taco Bell will incorporate more of these features in future units. The chain opened its first Go Mobile unit in 2021 in El Paso, Texas and just opened another one in Columbus, Ga.
• Can a 750-unit restaurant chain double in size in 10 years? Qdoba thinks so. The Mexican-themed fast-casual chain plans to open 40 restaurants in 2023 and another 60 in 2024, per a Fast Casual magazine report. As part of its march to get 1,500 locations systemwide Qdboba plans to open 80 restaurants a year starting in 2025. Qdoba is 80% franchised.
• Krispy Kreme sees plenty of opportunity to grow by developing partnerships with quick-serve restaurant chains. Krispy Kreme has been providing fresh-made doughnuts to 160 McDonald’s locations in Kentucky as part of an ongoing test program. And Krispy Kreme is happy with the way this program continues to play out, saying it has learned a lot about how QSRs operate, per a Restaurant Dive report. Further, McDonald’s eliminating its McCafe menu may have created a menu gap that Krispy Kreme can fill. As a result, Krispy Kreme sees plenty of potential to grow further through this and other partnerships in the future.
• BradyIFS has acquired Rancho Janitorial, Inc., a distributor serving the California market.

Economic News This Week

• Inflation remains moderate as the interest rates imposed by the U.S. Federal Reserve are slowly having the desired effect. The Consumer Price Index rose 0.2% in July, per the U.S. Bureau of Labor Statistics. Over the last 12 months, the all-items index increased 3.2%. Moderate inflation paired with a cooling labor market has many feeling the U.S. economy may have a soft landing after all, per a Reuters report. In fact, one economist feels this progress means it’s time for the central bank to hold off on raising interest rates moving forward. Specifically for the foodservice industry, food away from home prices increased 0.2% compared to a 0.3% increase for food at home prices.
• The Producer Price Index for final demand increased 0.3% percent in July, per the U.S. Bureau of Labor Statistics. In addition to being the highest jump since January, it’s also 0.1% greater than what most economists predicted, per multiple published reports. Final demand prices were unchanged in June and declined 0.3% in May. (See table A.) The index for final demand advanced 0.8% for the 12 months ended in July.
• Consumers’ perception of the U.S. economy remained relatively steady in July. The University of Michigan Consumer Sentiment Index came in at 71.2 in August, down slightly from 71.6 in July. To give this data some context, the index’s historical average is 86 and August’s results are 42 points greater than the study’s all-time low achieved in June of 2022.
• The NFIB Small Business Optimism Index increased 0.9 in July for a reading of 91.9. This marks the 19th consecutive month the index was less than the 49-year average of 98. Twenty-one percent of owners reported that inflation was their single most important problem in operating their business, down three points from June. Looking ahead, owners expecting better business conditions over the next six months improved 10 points from June to a net negative 30%, 31 percentage points better than last June’s reading of a net negative 61%. This is the highest reading since August 2021 but historically extremely negative.
• Initial jobless claims increased 21,000 for a total of 248,000 for the week-ending August 5, 2023, per the U.S. Department of Labor. The 4-week moving average was 231,000, an increase of 2,750 from the previous week’s average.