Technology has been at the forefront of Kura Sushi’s strategy since its inception in Japan in 1977, and since the chain’s first U.S. location opened at Irvine’s Diamond Jamboree shopping center in 2009.
That strategy is revving up, as the revolving sushi bar chain, whose domestic unit operates under the Kura Sushi USA Inc. name (Nasdaq: KRUS), takes its next step in automation with robot servers.
First tested in select restaurants in 2021, CEO Hajime Uba said last week it completed its robot rollout in all 37 U.S. stores of the chain.
Known as “Kur-B the KuraBot,” the new staff members are 44.1 inches tall with menu screens and two shelves for carrying items.
The robots are one of the more unique ways that local restaurant operators are tackling the challenges of staffing up their stores and dealing with rising wages.
Kura Sushi, which is known for its conveyer belt food delivery concept and self-ordering tablets, among other tech-focused features, expects to have over 40 U.S. restaurants by the end of this year. Southern California is its largest market with about a third of its stores in that region.
Despite the relatively small domestic footprint of Kura Sushi, the Irvine-based restaurant chain is among Orange County’s more valuable publicly traded restaurant companies, with a market cap topping $480 million as of last week.
By way of comparison, that falls in between the roughly $370 million valuation of Costa Mesa’s El Pollo Loco Holdings Inc. (Nasdaq: LOCO) and $580 million valuation of Huntington Beach’s BJ’s Restaurants Inc. (Nasdaq: BJRI).
Kura Sushi’s sales trail far behind its more established restaurant peers; it has sights on revenue of around $140 million for 2022. El Pollo Loco brought in $973 million last year, while BJ’s reported $1.1 billion of systemwide sales.
The sushi company raised a little over $40 million in proceeds when it went public about three years ago, at $14 a share. Its stock now trades around $50.
The company’s robots use movement sensors and memory of the restaurant’s layout to deliver drinks and condiments to guests. The KuraBots talk, light up, and play music on their way to the customer’s table and back to their stations to await the next order.
In the company’s second-quarter earnings call, CEO Uba told analysts of the positive reception from guests and employees, and noted an improvement in customer service “resulting from the reduction of non-hospitality focused responsibilities for our front-of-house employees.”
The robot servers were first pitched to the U.S. entity who selected China-based Pudu Robotics to be the manufacturer.
The robots were initially designed to improve and innovate the guest experience, but the rollout proved effective for labor savings, especially as the industry faces severe shortages.
Typically, employees serve five to seven tables each; they’re now able to handle eight to 10 as the robots improve efficiencies, according to Director of System and Menu Development Hideto Sugimoto.
Kura Sushi’s U.S. locations have surpassed the parent company in the robot rollout, Sugimoto told the Business Journal.
Kura Sushi has deployed over 60 robots companywide with one to two at each restaurant.
Tinkering With Tech
Kunihiko Tanaka founded Kura Sushi with innovation in mind.
In the company’s early years, a unique disposal system was created in which guests return used dishes through a slot at the table that takes plates through a water tunnel underneath the main food conveyor belt to the kitchen.
Kitchens count several rice making machines and streamlined food making processes in lieu of a head sushi chef, enabling any employee to prepare food.
With a menu of over 140 different offerings, the back of house also includes digital screens that track how many plates should be on the belt and which items are missing. This depends on location as well. The 2,276-square-foot location in Irvine—one of four spots for the chain in Orange County—may need 53 dishes at a time while a 5,694-square-foot restaurant in Austin, Texas requires over 200.
Restaurants average about 3,400 square feet.
“The founder is always leading the company with innovation in mind,” Sugimoto said. “The U.S. CEO follows that same path.”
Kura Sushi has copyrights on its tech, with 41 patents in Japan and around 145 trademarks across all entities.
The company introduced electronic tags in 2015 for the plates on the conveyer belt to track how long dishes have been revolving. Sugimoto noted the tags also help the company identify which dishes are in demand, aiding with menu innovation.
The plates also feature a sanitary system dubbed “Mr. Fresh,” with automated and ventilated plastic covers.
“We’re always revolving—not just the belt, but companywide as well,” Sugimoto said.
Kura Sushi remains in brainstorming mode, with multiple technology projects on deck at a time. For example, Sugimoto mentioned the potential of turning the customers’ phones into the ordering tablet.
“As we seek to be the leader in integrated kitchen technologies, our goal is to demonstrate the same type of leadership in technologies supporting the guest experience and access to the brand,” company officials said.