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Yum Brands ( YUM ) cites $1 billion investment in digital and

technology

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Yum Brands ( YUM ) says 500 U.S. Taco Bell locations have

AI-enabled

drive-throughs

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AI restaurant 'coach' can advise managers on operational

efficiencies

By Waylon Cunningham

March 6 (Reuters) - Tacos with a heavy serving of AI,

please.

That's what Yum Brands' ( YUM ) Taco Bell chain served up to

Wall Street this week, the most recent effort by a major

fast-food chain to promote newfangled labor-saving technology.

Executives at Yum and Taco Bell showcased their "Byte by

Yum" artificial intelligence-powered tools for restaurant

managers, disclosing on Tuesday at a Yum investor event in

Brooklyn, NY, that it has invested $1 billion into digital and

technology.

Use of AI is "already beginning around labor and inventory,"

said Dane Mathews, Taco Bell's Chief Digital and Technology

officer, at the event.

To demonstrate its current and planned use of AI technology,

Chief Operating Officer Jason Kidd showed Wall Street analysts a

video skit with a restaurant manager talking to a human

character playing the role of an AI assistant, which Yum calls

Byte AI Restaurant Coach.

"I noticed Brad hasn't clocked in yet for his shift, and

you're heading into your last shift crew for the night," an

actor playing the AI assistant says, addressing the Taco Bell

manager.

"Maybe he's out sick. Don't worry if he is. I can work the

drive-through," the AI character tells the manager.

About 500 Taco Bell U.S. locations have AI voice technology

to take drive-through orders, according to a slide that the

executives showed following the skit. That is up from the

roughly 100 locations that Yum cited in July 2024.

One analyst, from Morgan Stanley, called Yum's video skit

"very cool and slightly unsettling." Yum's Chief Technology

Officer, Joe Park, said Taco Bell does not plan to use AI to

reduce its labor costs, but rather to free up its employees to

do other tasks.

'LONG ROAD AHEAD'

Fast food corporations are increasingly turning to tech to

overhaul a business model that until recently had remained the

same since the 1940s. The last decade or so has seen a

proliferation of kiosks, digital menus, apps, AI-assisted

drive-throughs, and loyalty programs.

Chipotle's $100 million venture fund has helped spur

its efforts to partially automate its kitchens. McDonald's

announced in 2023 a partnership with Google Cloud to in

part deploy AI tech to its locations, though that backfired for

a day in 2024 when system outages made ordering impossible in

some of its largest markets.

At Yum, Mathews said there is "still a long road ahead of

us." Nearly 25,000 of Yum's 61,000 restaurants globally use one

of its in-house "Byte by Yum" tech products, Yum said in a

February 6 statement.

In the Taco Bell skit, the character playing the manager's

AI-assistant computes that a worker has been scheduled for fewer

than her usual weekly hours, and prods the manager to "see if

she wants to stick around the next hour" to reduce customer wait

times.

Also noting that a "competitor down the street" reduced its

hours of operation, the AI-coach suggested that the manager

expand his own restaurant's hours, citing a surge in late night

sales. The AI-coach offered to help the manager calculate

inventory. "Awesome, that's a real time-saver," the manager says

in the skit.

A Yum spokeswoman did not immediately reply to a request for

comment on whether AI is currently performing these tasks at any

Taco Bell locations, or if the skit only showed its future

ambitions.

Yum disclosed a projected 8% increase in Taco Bell same

store sales in the current quarter.

Yum's in-house software suite "really excited us," Bernstein

analysts who attended the event said in a note for investors.

Yum could potentially one day sell the software "outside the Yum

ecosystem," they said.

(Reporting by Waylon Cunningham; Editing by Muralikumar

Anantharaman)