Who needs restaurants?
Luke Saunders // WTF FOOD
In offices, drugstores and airports in and around Chicago, a new vending machine concept has sprouted.
Luke Saunders and his company, Farmer’s Fridge, are bringing consumers meals they’re used to—fresh salads, wraps and more—by using a device they’re not expecting. It’s attracted media attention and a new $30 million round of investment from former Google CEO Eric Schmidt and others. When he thinks What the Future, Luke Saunders wonders what it means to be a “restaurant” and how willing people are to let vending machines step in to that space.
GenPop: Your question was essentially what would it take for vending machines to play a bigger role. Why is this an important question for the future of food?
Luke Saunders: I think for Farmer’s Fridge, the goal had already been to create a restaurant experience through the vending platform from a quality perspective and from an experience perspective.
GenPop: We’re getting a wider range of products from vending machines. You can get an iPad at the airport, for example. Are we getting used to vending machines being a part of our consumer experience?
Saunders: I do think there’s a behavior change in the pattern of shopping. For example, if you [look at] banking, it was probably very common 30 years ago to show up at a bank on Thursday or Friday and wait in line for people to cash their paychecks. Then the ATM machine started to get introduced, and that pattern of behavior shifted relatively slowly. It has more to do with the way you spend your time and how you can plan ahead differently.
GenPop: No one has really disrupted the vending industry.
Saunders: Yes. When you think of the vending model, [it has been stagnant] for the last 50 years. The products in it change, but the concept is similar. You buy third-party products and sell it to consumers through a route-based distribution model.
GenPop: What has changed that allows you to offer this now? Was there a technological shift somehow?
Saunders: I think there are four or five phenomena that are really important. One is the cost of the technology, from an electromechanical standpoint, has come down quite a bit, as well as the internet connectivity and software side of things. We don’t own a single server. Two, the ability to organize the information that we’re getting and create personal relationships with consumers through a digital medium has definitely changed – not just vending but people’s comfort level with purchasing things with little or no human interaction. You’ve become used to this idea that you don’t need to touch and feel something. People are seeking better quality meals, but they aren’t necessarily making more money. So that creates an opportunity for businesses to consider how to [meet that need]. And I think it’s important for our BtoB partners and investors that you now have previously proven models for consumers shifting [their] behavior from a physical interaction to a kiosk model like ATMs and Redbox.
GenPop: Looking at the survey data, it seems like if you can crack the hot food problem, people are receptive to the idea that a vending machine can be as good if not better than a quick serve restaurant. Will that be possible?
Saunders: I had my first hot meal yesterday and it was excellent so I’m excited about that. It was a variant of the almond butter oatmeal that we currently serve cold.
GenPop: What’s possible in the next few years?
Saunders: [In the next few months,] we’ll be launching some meals that can be heated. There will certainly be a space in the marketplace for serving a hot meal from a machine. In fact there’s a pizza concept that exists and a french fry machine and a machine that is microwaving frozen burritos. There are businesses that [were] built around trying to serve food from a vending machine, but they failed because the food quality [wasn’t] matching restaurant quality.
“When you think of the vending model, [it has been stagnant] for the last 50 years.”
GenPop: What do you think all of this says about the future of the concepts of fast and convenient?
Saunders: I think consumers want everything faster and cheaper and more convenient. So, to the extent that the model can deliver from a quality perspective, ultimately that’s the path for the consumer market.
GenPop: What food items wouldn’t work in a vending machine?
Saunders: I think customizing through a vending machine presents quite a few challenges. And I’m not talking about mixing and matching a couple of different things. But if you walk into a salad chain, the number of possible outcomes for your salad is limitless. I don’t think fine dining or anything above the QSR category is really in play.
GenPop: In terms of convenience, how do you see the interplay of vending and delivery?
Saunders: We see our model as a node in that delivery network. There are delivery services out there that would just go anywhere and pick up anything. We actually see those orders through our platform now. We see ourselves as complementary.