Robot Baristas Serve Cappuccinos With Convenience

Kate Dwyer

August 30, 2019

FORTUNE.COM

baristas are carving a space between coffee bars and vending machines, catering to time-crunched consumers who want quality coffee without waiting in line.

There are a few robotic coffee startups gaining traction in the U.S., such as Cafe X, Briggo, and Truebird. Each one has a different vibe, but all operate under the same ethos: To serve up specialty coffee more efficiently with a bit of whimsy.

Briggo’s Coffee Haus is a kiosk resembling a log cabin, Truebird looks like a gentrified Brooklyn street vendor, and Cafe X plays up the entertainment value of preparing cups of joe with a robotic arm surrounded by glass.

In 2017, San Francisco-based Cafe X opened a downtown location in the Metreon, near a Target and movie theater. In 2018, it opened a storefront nearby on Market Street with dedicated seating, similar to the setup at tech-reliant Luckin, China’s second-most popular coffee chain behind Starbucks. Although Luckin isn’t entirely automated, orders are filled quickly, with customers ordering and paying through its app, which provides the company detailed consumer data. Serious about further expanding its tech-coffee model, Luckin went public in May in the U.S., listing on NASDAQ with a $561 million IPO, bringing its value to about $4.2 billion.

Automated coffee takes flight

Earlier this month, Briggo signed a national deal with SSP, a leading operator of airport concessions, to bring 25 automated coffee kiosks to airports across the U.S. and Canada.

The first Briggo kiosk opened July 2018 in the Austin-Bergstrom airport, soon followed by a second one six gates away. Customers order through a smartphone app or on built-in touch screens at the kiosk. When their drinks are ready, they’re sent a text message with a three-digit code, which is entered into the touchscreen. The coffee cup is then dispensed through a door in the center.

“This is the IoT of coffee,” CEO Kevin Nater said, referring to Internet of Things smart appliances. If things go awry, there’s a control center in Austin that can monitor every Briggo coffee robot in operation.

“We realized that the airport experience related to food and beverage was challenged by crowds, and security lines and the process of trying to serve yourself,” Nater said. He explained the company has a global strategy it’s “driving very hard” through the SSP deal. “The beauty of the airports is you have the locals leaving and you have the visitors coming, so we have a definite strategy to saturate all the cities with a presence in convention centers and [corporations] and hospitals and universities, train stations, places where we would be on your path.”

Cafe X, founded by college dropout Henry Hu, also is eyeing airports, with plans to open a location in SFO Terminal 3—the same terminal where Briggo recently placed two kiosks. Cafe X’s six-axis robotic arm makes drinks starting at $3, using coffee from Intelligentsia, Ritual, and Equator coffee roasters. None of the drinks cost more than $4, even those as complex as a cold-foam-oat-milk cappuccino. Cafe X is funded by investors including Craft Ventures, Jason Calacanis, Felicis Ventures, and The Thiel Foundation, which awarded $100,000 to Hu.

A “warm and approachable” robot

New York-based Truebird is looking at airport installations as well, although it’s not the company’s focus. In 2017, the entrepreneur Kevin Ryan—co-founder and chairman of companies such as online fashion outlet Gilt, wedding registry Zola, and the database program MongoDB—noticed that morning coffee lines in New York City were out of control.

In November 2018, Truebird launched its prototype in the New Lab co-working facility at the Brooklyn Navy Yard, which caters to startups that make physical products. “That’s where we work today,” said CEO Josh Feuerstein. “The prototype ran for several months to help us learn what customers wanted, and work out any of the kinks mechanically.”

Truebird raised initial funding, but has not disclosed how much. The goal this fall, Feuerstein says, is to launch a commercially-available version of the micro-cafe. Five of these will open in New York City between now and early 2020. This first version will exclusively offer espresso drinks—espresso, Americano, cappuccino, and latte—with a choice of either Stumptown or Regalia beans and either dairy or oat milk. Feuerstein says the menu will expand over time.

“Some of the early places we’re going to put them will include office building lobbies and shared kitchens of a consulting firm or investment bank or ad agency,” Feuerstein said. Other locations could include hospitals, universities, and museums—places where he believes workers are more likely to go out for coffee to avoid office coffee machines because of poor maintenance or low-quality ingredients.

Aside from business-to-business and business-to-consumer spaces—where a host building wants to provide its business tenants with an amenity—Truebird is looking at more traditional retail opportunities.

After customers place their order on the touchscreen, Truebird dispenses a cup onto the counter in the center of three automated magnets, which maneuver it to the coffee machine, where coffee and milk are poured. The cup is then brought to the customer. The magnetic transport system, Feuerstein said, “taps into some sort of joy that technology doesn’t often tap into. People describe it as poetic.”

“We wanted to create an experience and a brand that is warm and approachable and we really don’t want it to be futuristic,” said Feuerstein of the cart’s neon bird, light-box lettering, and pale blue siding. “We don’t want it to be robotic. We don’t think that’s what people want in their coffee experience, which is part functional, getting your caffeine, and part emotional, a three-times-a-day, warm experience people enjoy. It’s a really interesting design problem, when there’s automation involved.”

A changing industry

The level of human interaction is rapidly changing in the fast-food industry across the board. McDonald’s is developing voice-activated drive-through assistants, and robotic deep fryers. Pizza Hut recently debuted “pizza lockers” where customers can order ahead and pick up their food from cubbies with their name on them. Panera and Wendy’s have also introduced touchscreen kiosk ordering.

Internationally, tech firms GBL Robotics, Moscow; Melbourne-based Aabak; and Zurich-based ABB are developing robotic coffee arms.

Cafe X’s Hu pointed out that most coffee chains now have an automation component. “For example, Starbucks already uses automated espresso machines and blenders are also technically automation equipment,” he said. One could argue that apps allowing customers to order ahead of time are technically automation.

Briggo’s Nater doesn’t see your standard coffee shop switching from human baristas to robotic arms anytime soon. “On the weekend, I’m a different coffee buyer than I am when I’m trying to get to work and get stuff done. I love a third-place coffee experience where your mindset, and what you intend to have [as] a consumer, is different than when you’re on the run.”

However, robot baristas don’t have to be devoid of human connection. Cafe X’s robot arm has an attendant to “explain what is happening when you walk in, which is very useful,” one Yelp reviewer said of San Francisco’s Market Street location. Another noted, “It looks like Cafe X is trying to figure out a balance between innovation and hands-on human help.”

“I think we should always be looking at automation,” Feuerstein said. “We will never replace the full-cafe experience, where people want to come and be in a beautiful environment and sit down and take their time. We’re not going to replace that. But a lot of people don’t want that experience every time they go for a coffee.”