Paul Brown1:11
Thank you, good morning. It's great to be here at this conference. I look forward to talking about the restaurant industry's journey facilitated by technology and what's happening with Inspire. Given the audience, I'll start with a personal story that is a bit embarrassing and related to technology. I graduated from Georgia Tech 30 years ago. My first job was coding as a consultant on a large project for an Atlanta-based airline. I used COBOL and SQL, and I became efficient at embedded queries to reduce typing. However, during a performance test on an IBM 3090 with 128 megabytes of storage, my program, intended to run overnight, took months. I tried to optimize by splitting the code across six CPUs, but it consumed all resources and brought down production systems for seven hours. This taught me that coding wasn't for me, so I went to business school. Interestingly, my first project there in 1994 was analyzing how the internet would change business in the airline industry.
Looking at the restaurant industry, labor productivity as measured by the government shows a flat curve since 1987, unlike banking, retail, airlines, and hotels which have seen significant improvements due to technology. The restaurant industry is a $600 billion industry in the U.S. and $2 trillion globally that has yet to be fundamentally transformed by technology. Reasons include its manual processes, fragmented nature with 700,000 units in the U.S. and 15 million worldwide, and lack of technology vendor focus until recently. Transformation is expensive and requires vision and patience, especially in a transitioning industry.
In 2014-2015, we saw an opportunity to create a different kind of restaurant company by consolidating successful brands and building a scalable, extensible technology platform. This led to the foundation of Inspire Brands. Today, we have six brands, including Arby's, Buffalo Wild Wings, Sonic, Jimmy John's, Dunkin', and Baskin Robbins, making us the second-largest restaurant company in the U.S. with $30 billion in system sales, 32,000 restaurants in 70 countries, $7 billion in digital sales, and 650,000 team members.
It's not just about size; culture matters. Our core behaviors are Mavericks, Allies, Visionaries, Achievers, and Good Citizens. We invest in eight core capabilities, underpinned by technology, to outperform competitors. Nearly 50% of our headquarters staff are in technology, data, or analytics, making us more like a technology company.
Ten years ago, restaurant customer relationships were limited to physical interactions. Now, digital sales account for about 25% of the industry, enabling better guest reach and operational efficiency. For Inspire, digital sales increased 91% from Q1 2020 to Q1 2022. Examples include Sonic, which leveraged its drive-in model for mobile ordering, growing digital sales to $1 billion in three and a half years. Buffalo Wild Wings is transforming its dine-in experience to allow seamless server and app integration, enabling dynamic pricing. At Dunkin', we're innovating drive-throughs with geofencing for order preparation. We use AI to predict sales in 15-minute increments for labor scheduling, fundamentally improving efficiency. Automation, like the Flippy robot for frying, is also being tested to enhance operations.
I'm fascinated by the journey in the restaurant industry. Having worked in hotels, airlines, and Expedia, I've never seen such early-stage opportunities to transform an entire industry end-to-end. It's a win-win for customers, business models, and team members. Thank you for having me speak about Inspire's journey. Enjoy the rest of the conference.
