Convenience is king as new-gen vending units add meal kits

Discussion
Source: Byte Foods
May 25, 2018
Matthew Stern

Meal kits, once available only by subscription online, have begun appearing in brick-and-mortar stores as brands realize that it’s difficult to get customers interested in the product purely through e-commerce. Now thanks to a partnership between two startups, meal kits might start popping up in an unexpected physical location: the vending machine in the office lobby. 

Byte Foods, which places its vending machine-style smart fridges in office buildings, will be stocking meal kits from Chef’d in 100 of its Bay Area machines, according to The Spoon. As with other products in the Byte Foods machines, office workers will scan their credit card to open the fridge door, select a meal kit and receive a receipt upon closing the door. Byte Foods plans to soon stock the meal kits in all 500+ of its smart fridges.

Some of the biggest names in meal kits have recently gone physical. Last year, Albertsons acquired meal kit startup Plated and began stocking the kits in stores in addition to online direct-to-consumer sales. Early in 2018, Walmart announced the creation of its own branded meal kits available both in stores and online. Earlier this month, Blue Apron struck a deal with Costco to sell kits in the wholesaler’s stores.  This week, Kroger announced the acquisition of privately-owned meal kit leader Home Chef. 

But adding an element of grab-and-go for the post work crowd is where the Chef’d/Byte Foods deal appears to distinguish itself. On the way out of the office, potential Chef’d customers will pass the smart fridge at a time when they’re considering what to eat for dinner. Buying a meal kit from the machine would allow them to get something healthy to prepare when they get home, and avoid a more time-consuming after work visit to the grocery store. 

Companies in other areas of retail have also been exploring creative ways to leverage improved vending machine technology in recent years. In 2015, clothing retailer Gap began discussing vending machines for clothing. And while it’s not clear if that retailer ever brought the technology to the pilot stage, Japan-based fast fashion retailer Uniqlo did indeed roll out a clothing vending machine in the U.S.

DISCUSSION QUESTIONS: Are smart vending machines a smart way to sell meal kits? Are there other locations other than offices where the strategy might work? Do you see other meal kit brands partnering with next-gen vending machine companies to get their product to consumers?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"I love to see the innovations these companies are showing."
"Smart vending machines seen as people leave the office is a smart way to entice people to buy a meal at the very time they are hungry and tired."
"Properly placed (and priced!), I suspect this to perform well and fill a nice market niche."

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19 Comments on "Convenience is king as new-gen vending units add meal kits"


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Neil Saunders
BrainTrust

Whether this works or not will all come down to volume. How many meal kits will be sold from machines, what will the wastage rates be, and will there be enough stock to satisfy demand? These are all things that need to be balanced.

Theoretically, it should work as more and more people do grab dinner on their way home from work and this gives them a fast, convenient option. It’s certainly better than the subscription service, the biggest downside of which is having to plan meals ahead of time.

Lyle Bunn (Ph.D. Hon)
BrainTrust

Meal kit vending could compete with nearby food services on campus, in stadiums and transportation stations as well as hotels and casinos where consumers want convenience and a healthy food option at reasonable price. Clear indicators that food is fresh will be essential. Additional revenue streams from the vending machine such as display advertising or daisy chaining payment with beverage dispensing can add to profitability.

Max Goldberg
BrainTrust

Millennials love convenience and not having to interact with humans, so they should embrace vending machines for their convenience and ease of use. Japan has been successfully using a variety of vending machines for years.

Mike Osorio
BrainTrust

Excellent activation. When I am working remotely, the option of a meal kit available in this way would be incredibly tempting. Well-placed Byte machines in facilities well-populated with the identified target consumers should prove to be quite successful. I love to see the innovations these companies are showing.

Anne Howe
BrainTrust

In theory, meal kit vending sounds like a home run for urban areas, but the biggest concern is expired food. That can damage a brand as well as its customers.

Art Suriano
BrainTrust

I can see meal kits being a huge success when sold in vending machines. One of the benefits meal kits offer is convenience. So having vending machines in places where people are on the go makes perfect sense. Offices are a smart choice. There are also commuter places like train stations for the worker on their way home, as well as airports for the traveler on their way to a hotel who has a suite waiting for them with a kitchen. As technology improves so will the meal kit opportunities and don’t be surprised someday if you can make your own meal kit right at the vending machine.

This is all about the fast-paced world we are living in and how through technology we can keep adding conveniences. Each day we are getting closer to living like The Jetsons. And eventually, we may even find ourselves with a “replicator” as on Star Trek.

Shep Hyken
BrainTrust

I may sound like a broken record, but once again this is about convenience. Retailers must experiment and “push the envelope” on new ideas and technologies to bring consumers what they want, when they want it and where they want it. It will be interesting to see how brand/name recognition will impact remote location vending machines.

Richard Layman
Guest
24 days 22 hours ago

Agreed. But this is more complicated than Dunkin’ Donuts or 7-Eleven serving their stores from “depots” that produce baked items, or “fresh food” deliveries to a CVS by jobbers. Plus most of the machines aren’t likely to generate huge volume, making the machines that much harder to service. I see it as an interesting idea and concept that gets a lot of play, but very hard to make work successfully in practice.

Jeff Sward
Guest

I love the idea of kits! Just a couple of days ago I put a short article on LinkedIn suggesting that apparel retailers could learn a thing or two from LEGO and IKEA. Eliminating an “assembly required” step makes complete sense for any business. Subscription businesses reinforce this lesson. Testing will demonstrate what kind of locations have the critical mass of traffic to support meal kit machines before spoilage dominates the math. Shelf life!

Steve Montgomery
BrainTrust

Meal kits in vending machines brings a new meaning to “grab and go” foods. Will it work? That depends on the price points, the selection of items, the number of people in the office building, the freshness of the product, etc. I can envision locations where it would be successful and others where it would be a dismal failure.

Richard Layman
Guest
24 days 22 hours ago

Yes, I neglected to make this point. A few sites will be great places from which to do this, because they’ll have the right demographics to support high volume use. Most sites won’t. It’s why I don’t think the “Bodega” vending machine has a lot of legs … cf. Juicero, the $700 machine that squeezed specially prepared juice packets.

Richard J. George, Ph.D.
BrainTrust

The key to any meal kit business, regardless of distribution system is quality, variety, taste, freshness and convenience. Certainly, a smart vending machine in an office space and other common gathering spaces addresses the convenience factor. However, the logistics must be in place to insure that the other four attributes are in place (quality, variety, taste, freshness). The variety and freshness dimensions are a function of volume and replenishment. If potential marketers can stimulate sufficient demand than the probability of success increases.

Ken Morris
BrainTrust

As the title of this article states, “convenience is king!” Time-starved consumers are hungry for anything that makes their life easier. As we discussed regarding the Kroger acquisition of Home Chef yesterday, meal kits are the hot new trend and finding new venues for selling the kits makes sense.

The location for meal kit vending machines is a perfect fit for company offices and any location that is convenient for them that is on their way home. Other potentially good locations are mass transit stations, park-and-ride areas and gas stations/convenience stores.

Mohamed Amer
BrainTrust

New age smart vending machines are redefining consumer convenience and will come in novel ways and sizes from new fixed locations to mobile ones. Connected vending machines will become an intelligent node in a retailer’s network and create compelling means to reach customers.

Meal kits are another play on time-saving convenience. Combining the two elements of smart vending machines and meal kits will translate to more convenience and choices for consumers. We’re only limited by our imagination and our ability to execute on novel ideas.

Harley Feldman
BrainTrust

Smart vending machines seen as people leave the office is a smart way to entice people to buy a meal at the very time they are hungry and tired. However, the challenge for Byte Foods and Chef’d is the small customer base in each office. It will be expensive to maintain the offering for a small base. In stores, there is a large customer base and people will go to the store to find dinner in one form or another. Time will tell as to whether each business model will be profitable. The use of food vending machines will expand to the point where the machines are profitable. Providers of the machines and food will continue to try new venues for their offerings.

Dave Wendland
BrainTrust

Yes! Although there are logistical challenges like Neil Saunders and Richard George both pointed out, the convenience factor and appeal of meal kits have the ingredients of a winning venture. Properly placed (and priced!), I suspect this to perform well and fill a nice market niche.

Scott Norris
Guest

Several here have commented on placement near exits for transit and airport settings to consume on arrival at home or hotel. I also see opportunities at smaller terminals where frequency of departures or overall traffic levels may not justify a continuously-human-staffed snack bar or restaurant, just make sure there are several microwave ovens nearby so passengers have a chance to eat before a flight.

Richard Layman
Guest
24 days 22 hours ago

Very good point. Likely these are the venues that are most likely, in the long run, to be successful. If convenience is king, profitability is the emperor.

Craig Sundstrom
Guest

I’m having trouble seeing this (as, apparently, are about half of the respondents); although I can see people using vending machine for a snack or even lunch (sandwich/soup), I don’t think they’d be satisfied with the (presumably) limited offerings that would be available for dinner. And I’m wondering how many kits could be squeezed into a machine, to avoid the necessity of constantly restocking.

wpDiscuz
Braintrust
"I love to see the innovations these companies are showing."
"Smart vending machines seen as people leave the office is a smart way to entice people to buy a meal at the very time they are hungry and tired."
"Properly placed (and priced!), I suspect this to perform well and fill a nice market niche."

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