TECHNOLOGY: FOR REIS & IRVY’S, DISRUPTION IS DISH BEST SERVED COLD
Robot Ice Cream Vendors Bring In $16M in FY2019
Sunday, July 7, 2019
A developer of robots, automation and AI technologies, San Diego-based Generation NEXT Franchise Brands Inc. is the parent company to Reis & Irvy’s Inc., its robotic machines subsidiary that serves seven flavors of ice cream, frozen yogurt, sorbet and gelatos with six options of toppings in about 60 seconds or less to customers.
Nick Yates, CEO and chairman of Generation NEXT, said these robots are close to making their debut in the Golden State, maybe as soon as this summer.
“California is the only site we haven’t yet received approval on. But we just secured the health permit in the state and now we are in the last stages,” Yates said, adding that Qualcomm, Alvarado Hospital, adjacent to San Diego State University, and Kearny Mesa’s Zion Market are just some of the San Diego locations ready for their robots pending approval. “We are hoping that this month we will be in the clear and to have units on the ground four to six weeks after that.”
Founded in 2013, Generation NEXT launched Reis & Irvy’s in 2016 after it bought four patents for a pre-existing automated ice cream machine from an interactive robotic kiosk company called Robofusion.
1,000 Scheduled Installations
Today, Reis & Irvy’s has 325 frozen yogurt robots deployed around the globe and close to 1,000 more, including 30-40 throughout Southern California, scheduled to be installed this year, according to Yates. He adds that the company’s revenue for fiscal year ending June 2019 was $16 million and is expected to reach $50 million in the FY. In total, Reis & Irvy’s has 300 franchisees and pre-sales of approximately $160 million, Yates said.
There’s a minimum investment of $120,000 per franchisee, which includes two machines.
Once approved by the California Department of Public Health, the company has to go through one additional step with the California Department of Food and Agriculture, said Yates, before shipping and beginning all installations.
“We saw how Robofusion had tried to do it, but when we bought the patents, they stepped aside so we could develop a technology that had a much smaller footprint and could be placed in different locations and categories,” said Yates, who said the previous company spent a lot of time and money attempting to develop a similar technology to no avail. “We also improved it from a software perspective and also the entire technology – down to the pouring of a cup of consumable ice cream, the right amount, the right temperature, the right consistency.”
Paula Peter, marketing professor at San Diego State University, believes today’s consumer will be intrigued by Reis & Irvy’s experiential and immersive aspect. “From the front of the machine, you can see the process going, so, it entertains people, especially kids,” she said, adding that the ease of purchase will also entice buyers. “There are so many different types of ice cream stores now but no one has necessarily come up with the new ways of getting the ice cream and getting the consumer more involved than what is already out there. These guys have the ‘first movers’ advantage by making the experience more of getting the consumer more involved than what is already out there. These guys have the ‘first movers’ advantage by making the experience more tailored and more immersive.”
Reis & Irvy’s machines are 15 square feet wide, three feet deep and about six feet in height, said Yates. They are on wheels, so they can be easily moved despite weighing 1,500 pounds, and hold up to 200 cups and 12 gallons of product each that is released through two barrels. They can be installed anywhere as long as there is an outlet that matches the electrical specs of the machine’s plug, Yates said.
The way the company works is it sells machines to franchisees, who are required to buy a minimum of two robots each, according to Yates. Reis & Irvy’s San Diego-based team then finds homes for the robots, whether that is an amusement park, a hospital or a convention center.
Maintaining the machines.
It is the job of the franchisees, though, to perform the required maintenance on the automated dispensers, said Yates. Reis & Irvy’s franchisees are contractually mandated to make two visits a week per location in order to add more cupps and/ or product and/ or toppings, as well as give the machines a cleaning and collect the money. There is a third visit that takes place weekly, Yates said, which is for flushing out the entire unit with sanitizer, deep cleaning and filling it up again with product.
Reis & Irvy’s are manufactured by a company called Flex LTD out of South Carolina. Reis & Irvy’s has an exclusive contract with dairy food company Dannon, as well as a new partner, a soft-serve company that operates out of Wisconsin.
As for robots replacing the human workforce, Reis & Irvy’s says it employes plenty of people.
Everything from the cleaning of the robots to the restocking is done by local professionally vested operators. Reis & Irvy’s itself creates manufacturing jobs, service jobs, and franchisee support positions, to name a few. The company said it employs 50 employees at its headquarters dedicated to franchisee support for the life of its contracts.