Deliver the Goods: Our Interview With Luke Saunders, Founder and CEO, Farmer’s Fridge
With consumer grocery shopping, cooking and eating behavior upended by the pandemic, what better time to catch up with Luke Saunders, Founder and CEO of Farmer’s Fridge, the innovative refrigerated vending (and delivery) company headquartered in Chicago, Illinois. We've been watching Farmer's Fridge since it launched and have been impressed by how the company checks so many boxes in terms of innovatively meeting consumer eating needs —especially in a food culture that increasingly seeks high-quality, fresh foods in a broad range of settings and for diverse eating occasions. The idea of selling "wholesome and delicious" meals, snacks and beverages from refrigerated vending kiosks (and newly pandemic-influenced delivery services) really has upended the notion of convenience for consumers, even during COVID-19.
The Hartman Group (THG): With all the changes brought about by COVID-19, especially consumers quarantined at home, how have changes in consumer behavior impacted your business? For example, your machines appear to be located in high-traffic locations, and we notice you've added delivery.
Luke: COVID-19 has definitely meant a lot of changes for our business. When the pandemic first hit and folks started working from home, we saw revenue dip almost 85 percent pretty much overnight. The majority of our Fridge locations are still closed 8 months later. However, we were able to move quickly to launch new lines of business and make up for lost revenue over the subsequent months. We launched a home delivery service using existing infrastructure and now are delivering straight to customers’ doors in 4 states. We still have big plans. Our business has doubled in size every year since our launch in 2013, and we’re on track to be at 100% growth year-over-year in 2021 despite the setbacks we’ve faced.
THG: Since the pandemic, have you seen any changes in terms of demand for your salads vs. your bowls and sandwiches? We've seen consumers eating both with heightened "functionality" goals (to boost health, immunity and resilience) and also indulging. Are there any particular ingredients you’ve found consumers are avoiding or seeking?
Luke: The most popular dishes for our home delivery program have definitely been items that would involve a lot of prep or that require customers to have a lot of ingredients at home, so we are helping them save time. Things like flavorful salads or bowls can be challenging to prepare at home, especially when people aren’t grocery shopping as often and may only have a few minutes between meetings or be juggling work and childcare. Eating healthy is still important in these scenarios, though, and that’s where we’ve found the most success.
THG: We've also noticed consumers are a little bored with what they’re making at home and interested in new tastes, especially when it comes to lunch and dinner: have you seen any changes in terms of demand for products offering global ingredients and tastes?
Luke: Definitely; some of our new products with globally inspired flavor profiles have been very popular. We launched a Hong Kong Noodle Bowl with Stephanie Izard that’s been our #1 best seller since it launched. We also launched a Kimchi Rice Bowl that’s done very well and have a Thai Noodle Bowl that’s been consistently popular.
THG: Given that many consumers continue to work from home and breakfast has largely shifted from an on-the-go eating experience to an at-home occasion, how do you envision breakfast shifting for your target consumer? For example, on our end, we see consumer views on breakfast evolving to include a broader view on what can be eaten for breakfast as well as when it can be eaten...
Luke: It’s funny you mention that — we have actually seen a big increase since the pandemic in terms of people “hacking” our product by using it as a base and then doctoring it up to create a meal, with breakfast being the top category where this happens. Customers love to use our Burrito or Kimchi Bowls as a base for an egg scramble, add their own toppings to our overnight oats at home, or even pair our Enchilada Roja with avocado and scrambled eggs as a savory breakfast side.
THG: The pandemic has increased consumer interest in supporting businesses that incorporate more localized supply chains. Do you see this influencing how you communicate your supply chain to customers?
Luke: Yes, we’re continually tailoring our marketing efforts to emphasize that we’re a Chicago company through and through and that money spent with us supports jobs here in the city. While this has always been a pillar of our marketing, the pandemic has certainly given us ample additional opportunities to reiterate that.
THG: Related to the previous question, we find consumers increasingly interested in transparency and the narratives of ingredients and the producers behind products — how does Farmer's Fridge communicate topics linking to sustainability to its customers?
Luke: Similarly, we’re always looking for ways to weave our sustainability efforts into our marketing, whether it be through an Earth Day campaign or weaving that language into product descriptions online. One ongoing campaign that’s been successful is sharing how customers find creative ways to reuse our jars. We have seen so many clever ideas and love amplifying those photos through email and social media.
THG: Pre-pandemic, consumers were increasingly vocal about their interest in reducing single-use plastics, yet we have found pre-packaged foods to be more appealing to consumers as a safety measure since the onset of COVID-19. Are there any initiatives you have on the horizon that speak to how your products are packaged?
Luke: We’ve actually just completed a project investigating what a closed-loop packaging system (otherwise known as a jar-return program) could look like at Farmer’s Fridge. The findings were extremely exciting, as this is something our customers have asked for and something our team is really excited about. While we aren’t sure when we’ll be able to implement a closed-loop system, it’s something we’re actively discussing.
THG: As you continue to innovate in fresh vending, it seems like there's a significant opportunity given the current state of affairs. Do you see opportunity for a new set of customers given the shift in how consumers are outsourcing their needs for prepared foods these days?
Luke: Yes, as food away from home grows exponentially in popularity, we see a huge opportunity to reach a whole new group of consumers. Before our delivery program, our available customer base was limited based on physical proximity to a Fridge. Now that we offer home delivery, there is a huge opportunity to reach new customers, which is what we’ve been very busy doing. We’re excited about the opportunity.