Chipotle tests chip-making robot 'Chippy' at California restaurant

Yahoo Finance Live’s Brian Sozzi discusses why Chipotle’s ‘Chippy’ and ‘Flippy’ robots could be a tailwind for the restaurant chain.

Video transcript

JULIE HYMAN: Another story that we're tracking today, Chipotle is soon going to have a robot making its chips. We've talked about this before. This week, the company said Chippy, the robot, the tortilla making robot, is going to arrive soon to its first ever Chipotle restaurant in Southern California. Brian Sozzi says, that's great news. You know, Brian, I have to admit, I thought Chippy was already in place. We've talked so much about Chippy, but I guess it was only experimental. And now it's actually going to be in action, right?

BRIAN SOZZI: Yes, we need a little positive news. That's why we're doing a follow-up story on Chippy, of course, also related to Flippy, which is the hamburger flipper that is stationed in some White Castle restaurants now. Nonetheless, let's go run through this here. The Chippy backstory-- fired up a couple of bullet points on this one. Chipotle began testing Chippy at its California Innovation Center earlier this year. It is now going to actually go into an actual restaurant in Fountain Valley, California.

Chippy is essentially, as we saw in the photos there, a long robotic arm that cooks tortilla chips and dumps them into a bin and ultimately removing the need for an employee to be there doing this at a time of continued labor shortages in the restaurant sector. The robot was created by Miso Robotics, who we've talked to them before as well. And as I mentioned, they have created Flippy.

I think what you're getting here is a real look into the future of fast food here, trying to remove certain tasks of the restaurant that people do not want to do. This was something, I think, brought to light. And we talked to Chipotle CFO, Jack Hartung, just a couple of months ago. Here's what he said.

JACK HARTUNG: And really, with Chippy, not only can we make it fresh during the day, in the morning, which is what we do today, we have the opportunity to make them fresh throughout the day as well. So we're looking to enhance culinary and enhance the experience of our customers, make sure our food tastes, if anything, as good, if not better.

BRIAN SOZZI: I'm all for Chippy, guys. Chippy and Flippy. Get me that perfect burger. Get me that perfect tortilla chip. I am all for it. And ultimately, this might be good for stocks like a Chipotle, eventually like a McDonald's, because it is just going to drive a lot more efficiency. But here are a couple of reasons. As I mentioned, reduces labor costs in the restaurants. You invest one time in this particular robot. That's one less employee.

And yes, look at this robot as an employee. That employee is not going to be taking off days from work unless the arm falls off because the bolts fall off, and that is unlikely. Next, it improves line speed. That is very, very important for Chipotle, or as they call it, line throughput. And lastly, improved food quality. Again, I am all for the perfect chip. Give it to me. I'm willing to pay more for the perfect tortilla chip. I'm going to leave there happy, feeling good about myself.

BRAD SMITH: Weak water cooler chat with Chippy, though. I mean, yeah.

BRIAN SOZZI: No.

BRAD SMITH: No value there.

BRIAN SOZZI: They become a person, I think.

BRAD SMITH: Who fixes Chippy?

BRIAN SOZZI: I can have a great conversation with Chip and Flippy.

BRAD SMITH: Yeah? All right.

BRIAN SOZZI: I think. Who fixes it? Well, unclear, but Chipotle would be the ones fixing it. But the thing is, this is essentially like a factory worker. Factory machine. If you're a Ford, you operate robots right now. This is very much something similar. And maybe it won't wear out that much.

BRAD SMITH: All right.

JULIE HYMAN: I'm just envisioning him having a conversation with a robotic arm.

BRIAN SOZZI: I'm actually having that conversation in my head right now with Flippy, yes.

BRAD SMITH: Great job, Chippy.

JULIE HYMAN: I'm sure that you are.

BRIAN SOZZI: You're the best, Flippy.

BRAD SMITH: We'll see if it boosts the guacamole attachment rate as well, somehow.