Cold cash: Farmer's Fridge raises $30M to expand vending machines
- U.S.-based Farmer’s Fridge — an automated smart refrigerator business — recently attracted $30 million in financing. The round was led by Innovation Endeavors and included Danone’s investment arm, Just-Food reports.
- Farmer's Fridge focuses on nutritious meals that are ready for market and runs 186 automated, internet-connected fridges in Illinois and Milwaukee that work like vending machines, containing “chef-curated, restaurant quality meals” and snacks. The company built a platform that uses an algorithm to determine inventory for each fridge and can use sales patterns to keep each site stocked with most-likely-to-sell items.
- The company’s customers include hospitals, universities, airports, stores and office buildings. Surplus food is donated to local food pantries.
This vending machine concept certainly seems tailored to many of today’s young consumers. By providing fast, tasty restaurant-style meals in places such as colleges, airports or offices, Farmer’s Fridge should lure plenty of buyers craving healthier options than the usual vending machine fare of candy bars or chips — but with similar convenience. Giving leftovers to food shelters also appeals to those who value social consciousness in their food and grocery purchases.
As Farmer’s Fridge says on its website, “Eating good, quality food shouldn’t be hard. If you are hungry, no matter the time or place, we’re working to have a fridge near you. We embrace the unpredictability of a human day and the paradox of finding wholesome food where you used to turn for processed pick-me-ups.”
In addition to the convenience appeal, Farmer’s Fridge is “smart” and uses technology to track sold items. Investors — including former Google CEO Eric Schmidt's Innovation Endeavors, and former McDonald’s CEO Don Thompson's Cleveland Avenue — seem keen on the idea. The smart aspect of the product seems to mostly benefit the vending company, which can learn which items sell the most and adjust inventory accordingly. It will be interesting to see if donated food becomes scarce as the new highly efficient software program kicks in.
Farmer’s Fridge is not the only company looking for ways to give vending machines healthier options. PepsiCo’s expansion of the reach of Hello Goodness umbrella of products, which range from Sabra hummus to Simply Cheetos Puffs, have performed exceptionally well in vending machines. According to PepsiCo, studies show that adding a Hello Goodness machine to a vending bank boosts sales between 12% and 59%.
Others are using technology to encourage consumers to make healthier food decisions as they plug coins into vending machines. Scientists have developed a system that triggers a 25-second time delay when a consumer selects a highly caloric snack item from a vending machine, according to Bakery and Snacks. The DISC (Delays to Improve Snack Choices) system also displays a "delivery countdown" that gives consumers time to pick a more nutritious product instead. These researchers have found that delaying access to junk food makes the products less desirable, yielding a 2% to 5% increase in healthy snack purchases without impacting vending revenue.
Young consumers are looking for convenience and health when it comes to meals, and it will be interesting to see whether Farmer’s Fridge will be enough to keep its targeted buyers – hailing from colleges, hospitals and office buildings -- out of the cafeteria or fast-food lanes as the concept moves forward.