Will K-Robots Thrive Amid California's Minimum Wage Increase? – Jay Lee’s U.S. Report (128)

California's Minimum Wage Increase: Is a K-Robot Era Coming? - Jay Lee's US Dispatch (128)

Labor Shortages and K-Food Boom Could Present Opportunities

△ Lee Jong-chan, CEO of J&B Food Consulting

Starting from April 1 this year, a fast food restaurant chain in California with more than 60 locations raised its minimum wage by 25%, from $16 to $20 per hour. Many small businesses are struggling with rising labor costs as California’s minimum wage has already reached $16. Customers are also refraining from dining out due to the price increases. Particularly for Korean restaurants, lunch menus often cost over $20, and with tips included, the total can reach $25.

Compared to Korea, the adoption of robots in the US is still slow. While the pandemic triggered the need for robots due to labor shortages, the level of robot use in restaurants is still behind Korea. In Korea, not only are serving robots used, but each table also has a tablet for direct ordering. Whenever I visit Korea, I often find myself confused by how to use all the new technology.

Recently, due to the minimum wage increase in the US, Korean payment companies (POS providers) are offering tablet ordering systems and serving robots for sale or rental. These machines likely come from Korea. Especially with cooking robots and automation equipment for Korean and snack foods, which are uniquely made in Korea, there seems to be an opportunity abroad where the K-Food boom is taking place.

Therefore, when Korean franchises expand internationally, providing robots and various automated machines alongside their products could create a huge synergy. It would help in standardizing the taste and reducing labor costs.

The emergence of robot-operated restaurants is rooted in the labor shortages that the foodservice industry has been facing since the pandemic. According to the National Restaurant Association, the total number of workers in the US foodservice industry at the end of last year was 15 million. With the increase in minimum wage, the time has come to replace some of these workers with robots.

Particularly in the US, the tipping culture has led to increased resentment from consumers about tipping. Introducing robots or automated ordering systems could reduce the burden of tipping for customers.

Over 70% of serving robots in the market are made in China. Given that Korean products are struggling in terms of price competition, it’s necessary for Korea to develop differentiated robots.

Baedal Minjok, a major Korean food delivery company, created a subsidiary called “B-Robotics” in 2019 to offer serving robot rental services. Their flagship product, the Baemin Robot S model, goes beyond just serving functions and provides table-order integration services and robot control programs. The company is preparing for global expansion, both domestically and internationally.

Now is the time to prepare for the international expansion of K-serving robots and automation equipment, which will follow the path of K-Food.

Tag: #FoodRobots #K-Food

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