As the evolution of innovation continues across foodservice, all eyes are on the industry’s biggest brands to see what their next move will be. The decisions made today could very well influence our forward progress long into the future, and Yum! Brands knows this well. Accelerating its vision for innovation, the company has completed its acquisition of Dragontail Systems Limited for approximately $69 million ($93.5 million AUD). This purchase comes shortly after the successful implementation of a previously announced share scheme of arrangement in accordance with Australian corporations law.
“A key growth driver for our business and our teams is the continued acceleration of our digital and technology strategy, including how we leverage our global scale with investments in technology initiatives that enhance the customer and employee experience, strengthen restaurant unit economics, and provide a competitive advantage for our franchisees,” said David Gibbs, Chief Executive Officer, Yum! Brands. “We’re excited to welcome Dragontail and its world-class talent to the Yum! family and look forward to deploying its AI kitchen order management, delivery, and other technologies globally to our brands and franchisees over time.”
According to a press release, Yum! Brands acquired all of the issued and outstanding common shares of Dragontail for $0.17 ($0.235 AUD) per share in cash. Dragontail is now a wholly owned subsidiary of Yum! Brands, and the company estimates that this all-cash acquisition will have an immaterial impact on its 2021 financial results.
Dragontail’s platform is focused on optimizing and managing the entire food preparation process from order through delivery. Its connected, intelligent, end-to-end, AI-based solution automates the kitchen flow and the process of dispatching drivers. It helps restaurants sequence and time each order while planning optimal delivery routes and combining orders by location. The technology offers consumer-facing capabilities that enable customers to track their order en route and can operate with outside food delivery partners. This purchase also brings more of Dragontail’s emerging technologies, including its QT AI camera quality control system, to Yum! Brands’ operations.
As Yum! Brands focuses on the continued acceleration of its digital and technology initiatives across the globe, its efforts are geared toward providing customers with new and seamless ways to access its brands, simplifying the lives of restaurant teams, and improving unit economics for franchisees. Delivery, which Yum! Brands offers in over 39,000 restaurants, is a key part of the company’s strategy, driven by a combination of expanded aggregator partnerships and continued investment in its own branded channels.
“Dragontail’s cutting-edge restaurant technology allows us to tap into the power of AI to optimize the end-to-end food preparation process and accelerate and further enhance our delivery technology capabilities,” said Chris Turner, Chief Financial Officer, Yum! Brands. “We believe Dragontail will make it easier for team members to operate and run a restaurant, help our franchisees strengthen their store operations, and provide a superior experience for customers.”
Dragontail’s kitchen order management and delivery technology is deployed across nearly 1,500 Pizza Hut restaurants, which are banners under Yum! Brands, in over 10 countries. Many of the restaurants leveraging Dragontail’s platform have already seen a positive impact on sales, order fulfillment, and customer satisfaction scores, including product freshness and delivery time, the release continued.
“It is exciting to see the completion of the acquisition of Dragontail by Yum! Brands, who we have been collaborating with for years,” Dragontail's Managing Director Ido Levanon commented. “This transaction is a positive one for Dragontail shareholders and it provides Yum! Brands with even more innovative technology. We look forward to working together to deploy this technology to more Yum! Brands restaurants around the world.”
This is Yum! Brands’ third technology acquisition in 2021, signaling that further purchases may be on the horizon.
To track how these strategies play out for Yum! Brands, please continue following along with Deli Market News.