Innovation, at its root, is the backbone of growth. That was the takeaway from the keynote address from Nathan Lester, senior director, drive-thru innovations for Scooter’s Coffee, who spoke during the keynote address kicking off the Fast Casual Executive Summit in Louisville, Kentucky, on Oct. 8. The keynote was sponsored by Botrista.
The event, run by Networld Media Group, draws executives from leading brands to share successful ways to build and manage restaurants. Networld Media Group is the parent company of Fastcasual, Pizza Marketplace and QSRweb. The media company’s next event is a virtual conference for QSR leaders, #QSRNext, scheduled for Nov. 8.
Scooter’s Coffee, which has more than 700 locations, is a specialty coffee drive-thru concept. Now heading up drive-thru innovations for the brand, Lester says he has yet to really launch major technical advances at Scooter’s, but it’s poised for significant growth — Lester said the brand will hit 1,000 units by next year.
“We have been growing exponentially here, and that is important,” Lester said. “It’s important to use technology where technology makes sense.”
Lester, a former tech exec for McDonald’s, helped the Chicago-based burger brand launch several breakthrough restaurant innovations such as voice-activation order takers, automated French fry and protein tech and coffee bars using robotic gantry arms.
“We still wanted to use humans to finish off the product,” Lester said, adding that that final human touch is difficult to replicate by machine. “It was about streamlining productions, making it efficient and about getting rid of those mundane tasks that nobody wants to do anyway, and getting our people, our employees, in front of our customers to provide hospitality.”
McDonald’s technology, Lester said, was 18 months ahead of the industry, making it a leader in the field.
Lester admits he had never heard of Scooter’s Coffee when a recruiter contacted him to head up the brand’s drive-thru innovation, but he saw potential, and moved his family from Chicago to Omaha. Scooter’s was a small footprint, a drive-thru kiosk concept, that was highly efficient and offered a pared-down menu, and was essentially the same thing he was pitching to McDonald’s — a connected restaurant.
Though Lester said he went in to the Scooter’s business with a fervor, ready to pitch automation and heavy technology, the brand resisted.
“The issue was there was a missing link between innovation and our company strategy,” Lester said, “and that’s an important piece. It doesn’t matter what size of a company you are, it’s linking innovation and strategy. Innovation is a component of strategy. Strategy leads innovation, and innovation helps to shape strategy.”
Instead, Scooter’s created a growth council which included all of the c-suite executives with the goal of making sure everyone was on the same page. When Lester was hired, the brand was going through exponential growth, and they hired a president to lead the brand, Joe Robert Thornton. Thornton created five c-level executive roles within the company, and together, the c-suite team was built with the idea of supporting franchisees and preparing Scooter’s for massive growth.
“We needed to align with innovation,” Lester said, adding that Scooter’s is comprised of less than 10% company-owned units and that franchisees are the brand’s backbone. Franchisees have their own roundtable.
“You want to make sure that you are aligned with your company,” he added. “That you understand the appetite of innovation. At McDonald’s, the initiative was called breakthrough restaurant efficiency. We were all about breakthrough innovation.
“There’s the other end of the spectrum, which in incremental innovation. It’s making small, little incremental improvements, and over time we do a big business. There’s nothing wrong with either end of the spectrum. Some companies bounce between them.”
In between breakthrough innovation and incremental innovation are seven levels of growth:
“As we talk about the seven levels of growth, if you think of them as steps, the bottom step going up to the top step, you’re also increasing disruption,” Lester said.
Lester also spoke about de-risking assumptions, an important step that isn’t dependent on the size of a company — all companies should be doing it. The biggest risks to the success of an idea, and when testing that new idea, are:
For example, Scooter’s Coffee wanted to lessen its brand dependency on Red Bull by launching its own energy drink, called SCOOOT! Energy. Did people want it? The brand knew its beverages with energy drinks were good sellers and that Red Bull has a fervid fanbase. But the brand also knew there were benefits to launching its own energy drink. Scooter’s tested their proprietary energy drink with a focus group, and found that while some wouldn’t replace their Red Bull and it was a difficult discussion to have with the system, the brand truly believed launching their own would be a benefit. To de-risk those assumptions, the test market helped them learn how much education both franchisees and guests would need to take on.
In March 2023, Scooter’s Coffee built its own small innovation lab to help it test and learn quicker. It brings in business consultants, franchisees and field trainers, and uses generative Artificial Intelligence to build programs to help the brand automate quickly.
“This lab has saved us a lot in terms of equipment costs, labor costs, disrupting our stores and basically getting learnings, and also the side benefits, too — it’s really getting us front and center with our vendors to help define and build new innovations that are specific to Scooter’s Coffee,” Lester said. “We’ve been running this lab for a while, and we’re starting to see great things coming out of it.”
Lester said it doesn’t matter the size of a company. Any company can still align innovation with strategy, focus on growth and prioritize resources.
“You need to go after the ones that make the most difference,” Lester said. “So are they desirable ideas? Are they feasible (and) are they viable? Can you make money? … The whole point of innovation is growth.”