El Pollo Loco Will Airdrop Tacos With Its 'Air Loco' Drone Delivery Service

Sarah Favot

Favot is an award-winning journalist and adjunct instructor at USC's Annenberg School for Communication and Journalism. She previously was an investigative and data reporter at national education news site The 74 and local news site LA School Report. She's also worked at the Los Angeles Daily News. She was a Livingston Award finalist in 2011 and holds a Master's degree in journalism from Boston University and BA from the University of Windsor in Ontario, Canada.

El Pollo Loco says it will become the first national restaurant company to experiment with door-to-backyard drone delivery.

On June 24, the Costa Mesa-based restaurant chain, known for its fire-roasted chicken, will test "Air Loco," its drone delivery from restaurant kitchens to customers' backyards.


As more and more people ordered delivery during the pandemic, restaurants are looking for alternative cheaper and more efficient ways to bring food to customers' homes. In 2016, Amazon was one of the first companies to discuss using autonomous aerial vehicles to deliver packages to customers' doorsteps in 30 minutes or less. But Amazon Prime Air has yet to get off the ground and into widespread use.

With the Federal Aviation Administration recently approving rules for delivery services to people's homes, it is expected more and more drones will be taking to the skies to make restaurant and other types of deliveries.

For El Pollo Loco, delivery service became a larger part of its business during the pandemic, growing by 250% over the last year, and the drone service is a way to avoid service fees from traditional delivery services like Grubhub, Uber Eats, DoorDash and others that charge up to 30% in transaction fees. It also is a way to make more deliveries more quickly and is expected to be more cost effective and convenient for customers.

"We wanted to lead the way and be the first to deliver a memorable experience to our customers in a cost efficient, fun, and reliable fashion in a way no restaurant brand had previously attempted," Andy Rebhun, El Pollo Loco's Vice President and Digital Officer said in an email.

Other restaurants have tested drone delivery to designated pickup sites, like parking lots, wherein a delivery vehicle will pick up the order from the drop-off site and deliver it to the customer's home for the last leg of the trip. Rebhun said El Pollo Loco wanted to take the step of delivering the items directly to the customer's backyard or front door.

He doesn't think drone delivery for the restaurant industry will be a passing fad.

"I believe drone delivery is one of the more sustainable and cost-effective mechanisms for food delivery in the future," he said. "I believe there will be a bifurcated delivery model in the future where businesses will choose to operate in the most efficient and margin positive mechanism."

El Pollo Loco is launching the pilot with Tel Aviv-based drone startup Flytrex, which manufactures and operates automated drones that travel at 32 miles per hour and use a wire release mechanism to gently lower food orders from 80 feet.

The drone for the service is also outfitted with a fastened delivery box that keeps orders intact, which means customers will receive their orders packed in El Pollo Loco's new special packaging — used to keep food hotter for longer — more quickly than it takes for a conventional delivery to arrive.

When the order leaves the restaurant, the food will be loaded on the Air Loco drone and once it takes off, it will ascend to about 200 feet and start the flight to the destination, Rebhun said. The drone can carry up to 6.6 pounds of food. Once the food is lowered from the 80-foot wire, the tamper-proof sealed delivery bag will detach from the crane and the customer can retrieve their food.

El Pollo Loco will begin its pilot at 10 restaurants, which will be selected within the next 45 to 60 days, the company said. Once the test is completed, it plans to expand to more of its 480 restaurants depending on demand and regulatory approval from the FAA. During the pilot, a select number of El Pollo Loco's Loco Rewards members in Southern California will be surprised with one of the first flights, the company said.

It doesn't appear as though delivery orders will slow down for restaurants.

Analysts predict that online ordering will grow this year even as restaurants open back up to traditional full-capacity dining service. The global online food delivery market is expected to grow from $115.07 billion in 2020 to $126.91 billion in 2021.

The growth rate for online food ordering and restaurant delivery has been 20% in the last five years and is expected to comprise about 40% of all restaurant sales by 2025.

Flytrex launched a pilot program with Walmart in Fayetteville, North Carolina to deliver select grocery and household essential items. It also delivers Starbucks beverages and pastries.

Earlier this year, Pizza Hut Israel said it would deploy drones to deliver pizzas. But rather than delivering directly to customers' homes, the company said the drones would drop-off the orders at a government-approved landing zone, like a parking lot, and from there a driver would make the final leg of the delivery.

In 2019, Uber Eats started testing drone delivery for McDonald's in San Diego.

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NFT Startup Unblocked Raises New Funding, Teases Collectibles Beyond Music

Harri Weber

Do you know something we should know about L.A. tech or venture capital? Reach out securely via Signal: +1 917 434 4978.

Harri is dot.LA's senior finance reporter. She previously worked for Gizmodo, Fast Company, VentureBeat and Flipboard. Find her on Twitter and send tips on L.A. startups and venture capital to harrison@dot.la.

Courtesy of Unblocked

Backed by venture giant Tiger Global, Jay Z’s Marcy Venture Partners and pop star Shawn Mendez, NFT startup Unblocked could soon move into ventures beyond music after closing on a $10 million seed funding round.

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How LA Beverage Startups Are Using NFTs to Build Their Brands

Perrin Davidson
Perrin Davidson is the publisher of⁣ LAeats, an L.A.-based food community covering the food industry, food entertainment and food tech.
Image courtesy of Bored Breakfast Club

While you can’t drink an NFT, that isn’t stopping some beverage startups from looking to capitalize on the blockchain-enabled craze.

Non-fungible tokens have gained traction in the art world, where artists and creators are using the digital assets to create closer connections with fans and collectors.

The idea of building a creative community around a product is not unfamiliar to beverage brands. After all, generations of beverage aficionados gave us the concept of the bar, the tea house and the coffee joint.

As brands increasingly take to the digital world to increase their exposure, many beverage companies are now experimenting with NFT technology to build interest around their products. Budweiser, for instance, recently signed a deal to mint collectible tokens, as have Bacardi, Fountain Hard Seltzer and the Robert Mondavi Winery.

Three new L.A.-based beverage brands–Bored Breakfast Club, Yerb and Leisure Project–are also using the blockchain to build their companies and engage with customers in different ways. Each is using NFTs to kickstart their direct-to-consumer businesses and build interest in their brands.

The goal is to use the transparency and equity inherent in blockchain technology to attract early adopters—giving them an opportunity to test ideas and products before they’re finalized—and encourage them to invest in a community built around their drinks.

Time will tell if each brand can deliver on that promise.

Bored Breakfast Club Bored Breakfast Club's NFT tokens feature the Bored Ape characters and serve as a subscription membership.

Bored Breakfast Club

One L.A.-based effort, Bored Breakfast Club, has looked to leverage the popularity of Bored Ape collectible NFTs to help jump start a new coffee subscription service.

Frogtown-based marketing agency Kley is leading the effort to use Bored Ape Yacht Club (BAYC) and Mutant Ape Yacht Club (MAYC) intellectual property to build direct-to-consumer coffee subscription memberships that are sold as NFTs on the Ethereum blockchain. The tokens themselves feature a breakfast scene that include BAYC and MAYC characters, and each functions as a coffee subscription membership.

BAYC and MAYC are considered two of the most popular and expensive NFT collections, according to OpenSea, a secondary NFT marketplace that also tracks their value. BYAC NFTs are valued at approximately 74.69 ETH ($244,041) on the platform.

Kley co-founder Brad Klemmer said the idea was to parlay the success of the Bored Apes brand into a new direct-to-consumer offering. Owners of the NFTs get two free coffee shipments and the possibility of more, if the project is a success.

Klemmer said the idea is to build a regular clientele for his coffee brand by shipping it directly to consumers, rather than relying on them to go to a coffee shop or grocery store. “You need a brand and community that puts their product on [consumers’] doorstep on a weekly basis,” he said.

Bored Breakfast Club launched the project on Jan. 10, offering 5,000 NFTs for .08 ETH (approx. $250) each, and promising token holders they would receive a 12-ounce bag of a different variety of coffee for each of two NFT sales thresholds the company surpassed. The NFTs have since sold out, meaning that the project will ship two bags of coffee to each token holder by the end of the month. The company has also created a “community coffee wallet” that could entitle token holders to still more coffee.

Bored Breakfast Club A graphic explains Bored Breakfast Club's "wallet" concept.

That’s because the “wallet“ collects funds from a 5% royalty on its NFTs that are bought and sold on the secondary market. Once it collects enough funds, the company will send additional blends to its 5,000 token holders. (Klemmer said they’re waiting to get data from their initial shipments to determine how much it will cost to ship additional bags). That communal “wallet“ will also pay to produce extra bags of coffee and Bored Breakfast Club merchandise to sell to non-NFT holders.

Klemmer said he sees the NFT offerings as a “fun way to buy coffee.” Also, there were “similarities around NFT communities engaging with each other and what the DTC subscription model is trying to be.”

Bored Breakfast Club works with Yes Plz Coffee, which sources, roasts, packages and delivers the coffee to NFT holders.

Yerb yerba mate drink

Yerb

Yerb was born out of entrepreneur Brett Fink's habit of drinking yerba mate with friends, many of them creatives who were looking for a coffee alternative. The traditional South American drink is said to provide a calmer caffeine-imbibing experience than coffee.

Like Bored Breakfast Club, Fink is hoping to use NFTs to drum up interest in his business early on. But instead of relying on the popularity of a particular NFT brand, Fink sees an opportunity to use the blockchain to heighten awareness of his own brand and, hopefully, develop buy-in for its first product.

Fink, who has past experience building and growing consumer-packaged good (CPG) brands, including cannabis brands, thinks NFTs can help build a creative community around a product.

“If you believe what we believe, and want to create a product for the creative process, you can benefit from it, as there is a massive untapped opportunity in NFT and CPG projects,” Fink said. “You need to get people to believe what you believe, then have them be involved and take ownership of that product.”

Yerb’s first yerba mate drink will be bottled in 12-ounce cans but sold through NFTs that cost 0.039 ETH (approx. $77 USD). The company started offering the tokens in February of last year; each entitles the holder to six cans of Yerb’s first release, as well as an additional six-pack of cans every year that they hold the NFT. Yerb is hoping that the offer will help it identify early adopters who will buy-in to the brand as repeat customers.

Non-NFT holders will be able to purchase the drinks once token holders receive the first shipment. Yerb is targeting April 2022 for that release after hitting supply chain issues last year.

Leisure Project

Leisure Project

Venice-based Leisure Project is taking a similar approach to Yerb by targeting creatives with an emphasis on community development.

The startup, which bills itself as “the world’s first co-created beverage brand,” hopes to market a kind of natural Gatorade for entrepreneurs, creators and innovators.

Leisure Project was started by former NCAA Division I athletes and brothers Steve Michaelsen, who works at Nike LA, and Alex Michaelsen, who works at TikTok marketing agency GO Ventures in Beverly Hills. The brothers, who have been bootstrapping the project themselves, have spent almost two years creating the brand’s first three flavors.

In December, the Michaelsens announced plans to experiment with minting NFTs that would provide token holders with the first run of their beverages, cheaper pricing on additional flavors and the opportunity to pitch new products. Leisure Project has been sampling its drinks at local NFT events to drum up publicity.

Down the line, the company hopes to use the blockchain to give token holders access to a yet-to-be-defined “creator database” of potential partners and grants.

Leisure Project is in its early stages, but its founders hope establishing buy-in through NFTs and social platforms like Discord will help build an authentic community for their brand, and give them a potentially vital advantage over more-established competitors. “Big brands can’t go backwards and do something community-orientated after the fact,” Steve Michaelson said.

Correction: An earlier version of this post said Bored Breakfast Club would ship four bags of coffee to early NFT holders as sales thresholds were met. The company has since changed that number to two.

Office Hours: JibJab CEO Paul Hanges on Creating Viral Joy

Spencer Rascoff

Spencer Rascoff serves as executive chairman of dot.LA. He is an entrepreneur and company leader who co-founded Zillow, Hotwire, dot.LA, Pacaso and Supernova, and who served as Zillow's CEO for a decade. Through his startup studio and venture capital firm, 75 & Sunny, Spencer is an active angel investor in over 75 companies and is incubating several more.

Image courtesy of JibJab

Even if people don't know the brand by name, JibJab CEO Paul Hanges is happy to see the company's greeting cards resonate and its mission to make people laugh continue to thrive.

On this episode of Office Hours, Hanges talks about JibJab, a pioneer of internet comedy that has evolved into a subscription platform for exchanging ecards, as well as a studio that produces video shorts and commercials for clients including Sony, Nickelodeon, PBS Kids, NBC in Disney. JibJab was acquired by Catapult Capital in 2019.

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