CNBC Upstart 100

Inside the robot pizza company that delivers healthy pizzas to Google

Robots take on pizza at Silicon Valley startup

On Super Bowl Sunday, some 48 million Americans ordered takeout or delivery, and a big slice of the pie was pizza. Engineers at Alphabet's Google celebrated the big day at the company's Mountain View, California, campus in true Silicon Valley fashion: with robot-made pizzas.

"What the Google crew tells us is that they love our pizza because it's far more nutritious than typical delivery pizza, and it tastes really good," said Zume Pizza co-CEO Julia Collins. "They have been incredibly supportive, and we have done several events for them."

Zume Pizza (No. 1 on CNBC's Upstart 25 list), which is delivery-only, is replacing human chefs with robots, slashing labor costs in half and reinvesting those savings into higher-quality ingredients to carve out a portion of the $40 billion annual U.S. pizza business.

Zume employs 76 workers, split equally between delivery, kitchen and engineering staff. That's far fewer employees than the average pizza chain, but they get full benefits, education subsidies and shares in the business. The company — which made its first hire on Sept. 8, 2015 — has never had an employee quit, which is unusual in the restaurant business, said Collins.

The workforce of the future

"We're a co-bot situation," said Collins. "There are humans and robots collaborating to make better food, to make more fulfilling jobs and to make a more stable working environment for the folks that are working with us."

The Super Bowl was Zume's biggest night since launching in June 2015. The company made and delivered more than 350 pizzas — triple its usual Sunday average, said Collins. The Google Super Bowl party Zume catered was hosted by a group of African-American Googlers, said Collins.

"They invited us, which was really neat, because as an African-American co-CEO, it's really nice to be part of that community and to be serving pizza," she said.

Zume uses locally sourced ingredients for their pizzas
Jeniece Pettitt | CNBC

Zume's co-bot workforce provides a model for what the future of many industries might look like: Within five years robots and so-called intelligent agents will eliminate many positions in customer service, trucking and taxi services, amounting to 6 percent of U.S. jobs, according to a September Forrester report.

For Americans afraid of that future, Collins has this message: "Since the Industrial Revolution, the American workforce has learned to adapt with the advent of new technology, so as a country, as a people, we know how to do this."

Within Zume's kitchen, the repetitive tasks have been automated first. For example, there are three bots for squirting and spreading tomato sauce on pies, and a bot similar to ones used on a car assembly line to place those pies in an 800-degree oven hundreds of times a day.

"That's a highly repetitive task and one that can be dangerous for human beings, so integrating robots into that makes a lot of sense," said Collins.

The company will always need humans for food preparation, recipe development, taste tests and to improve their pizzas based on customer feedback, said Collins.

The cost of man vs. machine

Zume's robots are manufactured by global manufacturing company ABB — whose robots are typically used in large manufacturing settings — and integrated with the help of Silicon Valley software company L2F.

"We have co-developed the entire pizza production process that is robot-enabled," said Collins. "The individual pieces of equipment come from these large global manufacturers, but the integration of those robots within our ecosystem is something that we have designed and that we actually have the intellectual property on."

The bots cost between $25,000 and $35,000 each, but the investment will quickly pay off, said Collins. Other restaurants and food-delivery services are ripe for robot disruption, she said.

Julia Collins is the co-founder of Zume Pizza.
Jeniece Pettitt | CNBC

"That cost is a lot lower, as you can imagine, than the salary of a human being with benefits," she said. "I think you would be hard-pressed to find any food type that wouldn't benefit from this kind of intelligent automation that we're using."

Yum Brands' Pizza Hut and Domino's, along with Papa Johns and Little Caesars, dominate the U.S. pizza industry and have also been experimenting with robots. Pizza Hut has deployed robots in selected restaurants in Asia, and Domino's has introduced pizza-delivery droids in New Zealand.

Once the Zume pizzas are assembled and partly cooked at headquarters, they're loaded into a specially designed "Baked in the Back" delivery van, each equipped with 56 ovens to finish the cooking en route to customers, plus refrigeration to store additional 112 pies. The trucks can be topped up by vans carrying more pizzas so they never have to return to the depot.

By crunching all the data about customer orders, Zume knows which pizzas its customers want before they even place an order.

Zume developed its own special delivery truck with 56 ovens so the pizza can cook while en route to customers.
Jeniece Pettitt | CNBC

The company — which sold its first pizza on April 1, 2016 — closed a series A funding round and raised $23 million in December 2016 at a $50 million post-money valuation, according to Pitchbook. Collins hopes to be able to service the entire Bay Area from its one central facility — with 44 trucks and supporting delivery vehicles — by the end of 2018. Over time they will expand to Los Angeles and take the service nationwide.

Collins is one of nine female co-founders of start-ups named to the Upstart 25 list. That said, Collins' fellow women alumni from Stanford Business School have had a harder time raising venture capital funding than their male counterparts, she said.

"As more and more funds bring on additional female partners, I think we'll see that balance change a little bit, but it's something that we all have to be conscious about, that we have to keep talking about, and that we all have to really keep working on," she said.

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