How Farmer’s Fridge reaps success in challenging times
Farmer's Fridge, which operates dedicated fresh-food vending machines, continues to expand nationwide, evading the economic forces that have stalled much of the commercial foodservice industry's growth, such as rising food costs labor shortages.
The Chicago-based company launched 10 years ago and now has 1,000 Fridges spanning 20 markets nationwide, having sold 10 million meals.
The company assembles its machines, known as "Fridges," in house and prepares all of its food in an in-house commissary, which it delivers in company-owned trucks. Menu prices range from $4 to $9.99, and shelf life is five to eight days with a target food waste is 3% to 4%.
In addition to its vending business, the company has expanded its presence at retail.
Vending Times recently caught up with company founder and CEO Luke Saunders to discuss the company's growth and future plans. Following are excerpts from that interview.
Q. If you could point to one aspect of your operation that has contributed to its success, what would it be?
A. Our business is unique in the sense that we are a technology, food and supply chain company all in one. All of these facets of the business have contributed to our success.
Q. Has your retail business grown at the same rate as your overall business?
A. We have grown our Fridge portfolio by more than 100% since January of 2023. We currently have 400 retail locations and we plan to expand our retail footprint by leveraging partnerships with Target, Hudson News, HMSHost and Costco to 1,000-plus stores in the next 12 months.
Q. How has your geographic reach changed — what new markets have you entered?
A. Over the past 10 years, we've grown from a single Fridge in downtown Chicago to 1,000 Fridges in 22 markets. While Illinois is still our largest market, we have more than 140 Fridges in Texas and a significant presence in New York as well.
Q. Has the customer location mix changed in the last few years?
A. At this point our Fridges are primarily located in airports, hospitals, office buildings and college campuses. Airports are a newer development and one of our highest-demand outlets. You can also find Farmer's Fridge in stadiums and even the Minnesota Vikings practice facility.
Q. Everyone is concerned about food price inflation. How well have you been able to control your pricing?
A. Fortunately, we've been able to maintain our prices despite rising food and labor costs.
Q. Have you expanded your grower/producer network? Are you continuing to grow your supplier resources?
A. We utilize 130 ingredients for our menu and work with suppliers across the country to source the best ingredients, including turkey from Ferndale Market in Minnesota, cheese from Klondike Cheese Company in Wisconsin and quinoa from Simpli farmed using regenerative agriculture.
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Q. How do you find food supplier companies and how do you evaluate them? What are your criteria?
A. We partner with small purveyors and large distributors to ensure we source the best ingredients that also meet our rigorous food safety standards — while simultaneously allowing us to maintain our accessible price points.
Q. What do you see as the most popular menu trends for Farmer's Fridge?
A. Modern versions of classic favorites perform well. We offer a range of salads with inherent appeal, including a Cobb, Greek and Southwest Salad.
Q. Your logistics infrastructure is very important to your company's success. What criteria do you use to evaluate logistics partners?
A. We have three areas of focus:
Q. Labor has been a major challenge for all businesses, especially growing businesses. How successful has Farmer's Fridge been at meeting this challenge?
A. We feel fortunate to have a strong team at Farmer's Fridge and are proud of our retention.
Q. What resources do you use to find quality employees?
A. For quality employees, we like to evaluate their humility, willingness to learn, sense of collaboration and ability to pivot. When team members can offer unique life experiences or ideas to solve problems, it adds a layer of perspective that helps keep Farmer's Fridge innovative and fresh.
Q. Are there any new technologies you are looking at for vending, food prep, food testing or transportation/logistics?
A. We are continually evaluating the marketplace, but also working to improve our own technology and optimization.
Q. Will there be any changes in the company's growth strategy in the near future, i.e., franchising?
A. At this time, we do not currently have any plans to franchise our machines. We value the control we have over every aspect of the business by owning the full supply chain end to end.