Farmer’s Fridge founder develops his own tools
Image courtesy of Farmer's Fridge
Since Luke Saunders founded the company in 2013, Farmer's Fridge has earned a lot of loyalty from customers looking to grab a freshly prepared salad on the run.
While Saunders loves to talk about the farms and markets whose products are featured in Farmer's Fridge kiosks at work sites and transportation hubs, the most notable feature of this rapidly expanding business is the personal imprint Saunders has left on every aspect of it.
As mentioned in part 1 of this two-part series, Saunders came up with a business model for just-in-time delivery of freshly prepared food to a kiosk based on the machine's sales. In executing this business model, Saunders also ended up developing most of his own tools.
Most entrepreneurs in the self-service space rely on commercially available equipment and management software. However, Saunders and his team opted instead to develop their own kiosk design and software systems in a way that would allow them to monitor inventory, transactions and temperature in real time.
|Farmer's Fridge uses fresh ingredients in freshly made menu items that are delivered on a daily basis.|
Timely reporting is vital
Timely reporting is crucial to the ability of Farmer's Fridge to review machine sales, tweak menus, prepare food and deliver it to the locations on a daily basis.
Operating from a central commissary, the company's temperature-controlled vehicles service the kiosks five to seven days a week. All data — operational, web/mobile and consumer — sits on the cloud.
"We get a report every day that tells us exactly what we need to make for every fridge," Saunders said. "We make that to order — we're literally chopping the lettuce as that number comes in, cutting avocados on the line. The whole idea is to get the product to the fridge as fast as possible."
The company uses a "cost function" algorithm that determines the probability of a specific product selling at a particular location. The software also customizes the product mix based on purchasing patterns at a location. The maximum number of stock-keeping units in a machine is around 30.
If the machine exceeds 40 degrees for a specified period of time, the temperature sensor will send an alert to operations and shut down machine functions in order to prevent sales of potentially spoiled product.
Either remotely, via the Farmer's Fridge app, or on site using the machine's 32-inch touchscreen, customers can review a menu and ingredients and determine product availability. Customers can shop the machine by category: sandwiches; snacks; bowls; salads; proteins; and drinks. Customers can even place an order using the app and pick it up at the machine by entering a code.
"You add it to your cart and check out," Saunders said. "There's also an opportunity to enter a coupon as you check out." Customers can pay by card or mobile phone. The machine does not accept cash.
Once the product has been selected, a belt-driven elevator system transports it to a delivery bin. The bin is situated at waist height so that the customer doesn't have to reach down to retrieve a purchase, as is usually the case with traditional vending machines.
Utensils and napkins are available from openings on the side of the machine. There's also an opening where customers can deposit their used plastic food container for recycling.
Customer rewards drive sales
|Utensils, napkins and a recycling bin are located|
in the side of the machine.
About 70 percent of customers enter their phone number into the system to earn "Fridge Green" rewards for future purchases. Customers see their rewards balance any time they open their app.
"Every time you buy, you're earning Green," Saunders said. Customers can also earn extra Green by referring others to Farmer's Fridge.
Special promotions are not uncommon. For instance, if there is a snow day, Farmer's Fridge will send out a discount coupon for employees who make it in to the office.
The system is also able to upsell products, suggesting possible add-ons and identifying best-selling items.
"Once you are actually engaged with the fridge, we are making recommendations," Saunders said.
Charting new territory
Getting distribution has been the biggest challenge, Saunders said. This isn't surprising, considering that the business is built around a new and unfamiliar concept. To broaden its footprint, Farmer's Fridge offers to share a portion of revenues with the host location in some instances.
Besides transportation hubs, hospitals and food courts, Farmer's Fridge machines can be found in some Walgreens and CVS stores. The retailers view the Farmer's Fridge machines as traffic builders.
"The connection between traffic and basket to [the retailers] is very high," Saunders said. "It also drives higher loyalty."
The company's outlook is positive, having closed last year on a $10 million funding round from Cleveland Avenue, an investor group run by former McDonald's CEO Don Thompson, and Danone Ventures, the venture capital arm of the Paris-based yogurt giant.
The VC funding will help Farmer's Fridge to add 100 new units to its existing 180 or so, bringing Saunders that much closer to his goal of taking the concept nationwide.
Images courtesy of Farmer's Fridge.
Elliot Maras is the editor of KioskMarketplace.com and FoodTruckOperator.com.