Revolutionizing Pizza Delivery: Stellar Pizza's Robotic Trucks Speed into the Future

Step aside, traditional pizza delivery—there's a new slice in town, and it’s rolling your way. Join us as we sit down with the visionary Benson Tsai of Stellar Pizza, whose fully automated mobile food trucks are dishing out pizzas faster than you can say "extra cheese, please." Benson, who's traversed from the electric vehicle industry to a SpaceX collaboration, now marries his chemical engineering savvy with his culinary curiosity to dish out delectable pizzas on the go. Discover the unexpected journey that led this innovator to reimagine the pizza-making process, and how his high-tech approach is taking Los Angeles by storm, particularly among hungry college students and corporate event-goers.

In a whirlwind of efficiency and technology, Benson unveils the operational wizardry behind Stellar Pizza. Imagine a world where pizza production hits warp speed, churning out a fresh pie every 45 seconds. This isn't your average food truck; it's a glimpse into the future of fast food, combining prep work genius with sophisticated commissary logistics. Benson's tale is a tantalizing peek into how automation is slicing labor costs and revolutionizing how we satisfy our pizza cravings. So, grab a slice of this action-packed episode to feed your curiosity and perhaps spark your own entrepreneurial spirit in the bustling world of tech-driven gastronomy.

Transcript

Speaker 1 0:00

We're here at Create this week and recording some very special podcasts for Nations Restaurant News. We're going to be interviewing eight different executives from restaurants and also from the Ambassador Community to explore different themes of each of the chapters of the path to digital maturity.

From Space X to Pizza

Speaker 2 0:51

Live at Create. I am here with Benson Tsai and we are going to talk a little bit about stellar pizza and how you are bringing pizza to the people literally bringing pizza to the people and talk about how that has evolved over the time that you've been working on it.

Speaker 3 1:09

Yes, for some context, stellar pizza is a pizza company powered by fully automated mobile food trucks. I think the initial ideas were around being able to cook inside the truck while it was driving to your house, but as we learned more about the industry, we realized that the automation alone was really cool and mobility is interesting, and so we paired those together and made a truck that goes and finds demand where people are gathering to eat food. So we decided to take our heat-seeking missile and go and find the large gatherings of people in Crack Out Pizza.

Speaker 2 1:42

That's funny. One interesting thing you said in that sentence was as we learned about the industry, so tell us a little bit about where you came from.

How automation increases throughput

Speaker 3 1:49

Yeah, so early days I started in the electric vehicle world. I started an electric truck company and then joined Lucid Motors when they were very small and then ended up working for Elon Musk at SpaceX. So I came from the hardware vehicle world. But my academic degree is actually in chemical engineering. So I sat in lectures where we learned how to coat frosted flakes with the right amount of sugar without breaking them. So I had some training in food production. But stellar pizza was the combination of my passion.

Speaker 2 2:19

So this is where you were able to bring food together with chemistry, together with automation and together with mobility and with the venture-backed mindset for a company. It all started to make sense.

Speaker 3 2:31

Yeah.

Speaker 2 2:32

So how many trucks do you have today?

Speaker 3 2:33

We have three Two fully operating and then our third is just coming online right now.

Speaker 2 2:37

That's exciting, and where do they operate?

Speaker 3 2:39

They operate in Los Angeles largely on college campuses, but you can also book our trucks for catering events. At lunch we do corporate events. It's a restaurant on wheels that can go and operate in very different modes throughout the day and, as I said earlier, we find demand and operate however we see fit.

Speaker 2 2:58

Yeah, Because of the automation. What I imagine is that you're able to put out a tremendous volume of pizza with less labor. Is that accurate?

Speaker 3 3:06

That is correct. We have two employees who operate as a truck, but really they're there to talk to the customers and then the food production. So our truck, it takes about four and a half minutes, five minutes to make a pizza, but then it can make a pizza every minute or so, 45 seconds to a minute, depending on when you order.

Speaker 2 3:22

That's amazing. That is amazing throughput. We were talking earlier today about throughput in restaurants and the need to be able to expand that as the market expands. It's not just the tables in front of you but in fact, the whole trade area. Now that we have delivery and in your case, if you're going to all the most popular places that must want pizza, then they need to get it out very quickly.

Speaker 3 3:44

That's right.

The purpose of pizza: we are here to lower the cost of living for all Americans

Speaker 2 3:45

So part of what makes it possible to put out so much pizza in such a short time is prep and getting the right thing's ready at the right time. So that you are doing more assembly and baking and less getting ready to go and tell us a little bit about how you prep all of your products. But specifically, I think probably the dough is the most interesting because it's so critical to a good pizza.

Speaker 3 4:07

Yeah, that's right. So all of our trucks operate out of the commissary, which is how food trucks actually legally have to operate, and then we have our products. Fortunately, the pizza industry is pretty mature and pretty fragmented, so there's a lot of suppliers who ship in sausage that's pre-cooked there's no raw meats involved in our food but they all get shipped to our commissary. And even our dough is made by local bakeries. They make our recipe but they bring in the dough and then we put it in refrigerators and then it all gets loaded into the truck. So our commissary is actually very simple. It needs to be able to do ware washing and then loading of refrigerated ingredients. But our commissary operates our trucks. Every night they come home and they get cleaned, they get loaded with ingredients and the next morning they go out and we're able to store 420 pizzas worth of ingredients per outing.

Speaker 2 4:54

What do you aspire that the brand will become?

Speaker 3 4:58

Yeah, Stellar Pizza. It's a fun brand. Pizza is a fun food, so we've made the brand feel very fun. There's a subtle nod to this SpaceX history that me and my co-founders and a lot of the early team has the Stellar. But I really do think affordably delicious food is our goal with all of this technology. We're not building robots for robot's sake. We are here to lower the cost of living for all Americans.

Speaker 1 5:21

I love it. Hi, carl, here just to interrupt the show briefly to remind you that if you have yet to get your copy of either of the delivering the digital restaurant books, now is the time to get one. If you head to the digital restaurant, you're going to be able to get the best price available. You can also listen to both books with yours truly talking about them on an audible. You can get a copy of Amazon if you'd prefer to order through them, but if you haven't got the books yet, get them. They really are going to transform the way in which you look at the restaurant industry and the way in which technology is disrupting it.

Speaker 2 5:52

So talk about the price and cost of your pizza compared to a standard pizza.

Speaker 3 5:57

In this day and age, pizza traditionally already had a very high markup over the cost of goods. On average I think it's 580%. My data might be like two years old or three years old, but higher than alcohol for sure. There's a reason why pizza delivery became such a big thing back in the 90s because of the economics of it worked out. So for us we're again taking another cost center, which is labor and the real estate, and lowering the cost of that, so we can then share the cost savings with our customer.

Speaker 2 6:25

That is awesome, and do you get a big response to that?

Strong unit level economics

Speaker 3 6:29

Yeah, there's a danger of pricing it too low, where people start to question the quality of the food. So pricing has been an interesting topic, strategy wise internally. But I think our mission is still we have an operational advantage cost advantage over our competitors and so we're trying to make a difference and hopefully people will notice.

Speaker 2 6:48

Yeah, I love it. Restaurant industry-wide typically there is about a 3x markup on the cost of food to what consumers actually pay for it and restaurants typically are not super profitable on average. There are some exceptions to that of course, but that is because so much money goes into occupancy utilities insurance and then of course the labor.

Speaker 3 7:11

And then the training and retraining of the new employees that cycle through.

Speaker 2 7:14

And when you have turnover, it's so many issues that automation takes a lot of that away. And are you finding that you are able to create the pizza at a cost that is truly lower than say?

Speaker 3 7:29

where the.

Speaker 2 7:29

Domino's or Papa John's is creating.

Speaker 3 7:31

Yeah so the unit economics of our trucks are positive already and we're doing pretty good revenue right now. I'll be it. We only have to fully working at that soon to be a third soon to be a third. But the economics we're doing well because we just don't have the back of house labor and we have our employees, which we pay pretty well at the front.

Automation to lower the cost of food

Speaker 3 7:51

To be engaging with a customer and doing things that automation and robotics can't do. The hope is that level of customer service will result in a great customer experience and is the Truck all electric? It is a propane, someone who used to design electric cars and electric vehicles. The technical feasibility of that is the energy density of profanity.

Speaker 2 8:11

It's too high and the amount of energy you need to cook pizza is just so you either either have to be able to Plug into a 220 or you would need to carry a giant battery.

Speaker 3 8:20

It would be a battery the size of the truck following that truck. I have already done the math.

Speaker 2 8:24

I'm pretty sure that's how my son's Thomas the train Train's work. I have a little like tender that carries a battery and then when you look forward 10, 20 years which I'm sure you're accustomed to doing that from your time with SpaceX Electric cars as you forecast out 10, 20 years in the restaurant industry, what do you think it's likely to look like?

Speaker 3 8:45

So I'm a big space person. I launch a lot of Star Trek. I think every restaurant there's a version of our company that also has retail locations as well, and I think every restaurant is gonna operate like a spaceship and it's gonna have its own internal computer that can help augment the capabilities of a restaurant manager and help give them guidance On how to operate the restaurant. But I think technology, both at the automation in the back of house, plus the Supply chain, man, all the managerial duties, technology is gonna change the way the restaurants Operate and it's gonna make it much more efficient. We can operate with fewer people and ultimately, despite Reducing the number of available jobs in the industry, having a lower cost of food, like if millions of people can pay three dollars less for food or five dollars less for food, that's way better, right yeah, for the industry.

Speaker 2 9:36

Data Central put up a slide earlier today. I don't know if you're in the room when it happened, but they put up a slide that was food away from home and food at home inflation over a 20-year period, and he asked what do you notice about this chart? And the first thing that really jumps out is that food at home, or grocery as we know it, inflation is extremely volatile very high highs and actually goes below zero back and forth, whereas restaurant inflation is much more stable, but it only goes one way, only goes up.

Speaker 2 10:06

So what you're talking about is revolutionary, really, because the whole industry does not work this way. You're talking about taking technological advances and using them to fundamentally lower the price that consumers are paying, which is not something that's been done in the industry, I would argue, since the advent of fast food, which was in itself a technological advance. Do you think that will become something that becomes widespread in the industry, that there will be lots of not just people making pizza, but people making all kinds of things ramen and eggs and who knows what?

Speaker 3 10:39

Yeah, I think so. I think people who are able to invest in that level of innovation it doesn't necessarily have to be the whole restaurant, but people investing in automating and increasing the efficiency of a restaurant and passing that down to the consumer I think they're going to have a cost advantage, a price advantage over their competitors and long term, over the next 10, 20 years, it will hopefully be a good thing for the world. I think about in terms of plots. Early days I saw a plot of the cost of electronics, consumer electronics like television, even adjusted for inflation television prices like they're almost disposable but it's because of the automation in the factories that they've been able to do that. But if you look at everything else, everything is going up. California recently passed a new increase. They want to increase the minimum wage for fast food restaurants to $20 an hour right and rightfully.

Speaker 3 11:28

I think it just costs a lot to live.

Speaker 2 11:30

In California. In California, Although it will be really interesting, you're going to see a whole bunch of brands going.

Speaker 3 11:34

I am not fast food, not me, yeah yeah, but if you think about things that can help avoid the wage price spiral, because the consumers of fast food generally they're going to have to pay for it. They're going to have to pay for it, and some of these consumers are actually the people who work at these places, and so I think automation is one of the key ways in which we can help mitigate any sort of increases in cost.

Speaker 2 11:56

That would be an incredible future, I think, if we could bring the price of prepared foods down, in whatever way that happens. I think, that would be incredible. Thank you so much for spending some time with me. Sure, yeah it's great to see you. I sure will see you more around the conference.

Speaker 1 12:10

Yeah, thanks for having me. The Digital Restaurant podcast is available for you to follow and subscribe. Wherever you listen to your podcasts, watch us, rate us and subscribe to the Digital Restaurant on YouTube and follow along on all our social media Digital Restaurant channels. Thanks for listening.