Here’s what Yum Brands (YUM) are doing. This week, Taco Bell made a move on Wall Street, marking the latest attempt by a major fast-food chain to push new labor-saving technology.
Yum and Taco Bell executives showcased their AI-powered "Byte by Yum" tools for restaurant managers, announcing at an investor event in Brooklyn, New York, that they had invested $1 billion in digital technology.
“The use of AI is already starting with workforce and inventory,” said Dane Matthews, Taco Bell’s Chief Digital and Technology Officer.
To demonstrate AI's current and planned applications, COO Jason Kidd presented a video skit to Wall Street analysts. In it, a restaurant manager interacts with an AI assistant called Byte AI Restaurant Coach.
“I noticed Brad hasn’t arrived for his shift yet, and you’re heading into your last shift of the night,” the AI assistant tells the Taco Bell manager.
“Maybe he’s sick. Don’t worry if he is. I can take drive-thru orders,” the AI character responds.
About 500 Taco Bell locations in the U.S. now use AI-powered voice technology for drive-thru orders—up from 100 locations in July 2024.
A Morgan Stanley analyst called Yum’s video "very cool and a little unsettling." Yum’s CTO, Joe Park, clarified that Taco Bell does not intend to cut labor costs with AI but rather free up employees for other tasks.
“A LONG ROAD AHEAD”
Fast-food chains are increasingly turning to technology to rethink a business model that has remained largely unchanged since the 1940s. Over the past decade, self-service kiosks, digital menus, apps, AI-powered drive-thrus, and loyalty programs have proliferated.
- Chipotle (CMG) invested $100 million in partially automating its kitchens.
- McDonald's (MCD) partnered with Google Cloud in 2023 for AI deployment, though glitches in 2024 briefly disrupted orders in key markets.
Matthews said, “We have a long way to go.” Nearly 25,000 of Yum’s 61,000 global restaurants now use at least one Byte by Yum product.
In the Taco Bell video skit, the AI assistant notes that an employee was scheduled for fewer hours than usual and suggests the manager ask if she wants to stay longer to reduce customer wait times.
Noting that a "competitor across the street" had cut hours, the AI assistant also suggested extending Taco Bell’s operating hours, citing a late-night sales surge. The AI coach then offers to help calculate inventory.
“Great, that’s a real time-saver,” the manager replies.
Yum did not immediately comment on whether AI is currently performing these tasks in Taco Bell locations or if the skit simply represented future ambitions.
Yum projected 8% same-store sales growth at Taco Bell this quarter.
Bernstein analysts who attended the event said Yum’s proprietary software suite "really excited us" and suggested the company could eventually sell it beyond the Yum ecosystem.