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The Spoon

Daily news and analysis about the food tech revolution

Articulate 2019

ArticulATE Q&A: Byte Foods Brings Affordability to Healthy Office Eating

When you work and live in the Bay Area, it’s easy to to think that every company is like a big tech company. I mean, breakfast, lunch and dinner are obviously fully catered in every office, right?

Wrong.

That Bay Area bias tends to blind people to the fact that a lot of workplaces don’t or can’t afford to fully subsidize food for their employees everyday. Which is where Byte Foods thinks it can help. Byte helps automate office meals by placing smart fridges inside offices. Employees can grab healthy, fresh food and pay for it on the spot, while employers can subsidize as little or as much as they like — and realize the benefits of having workers stick around during meals.

Byte Co-Founder, Lee Mokri, is one of the amazing speakers lined up for our upcoming ArticulATE food robotics and automation summit. Before he takes the stage, he took a few of our questions to give us a little, err, taste of what he’ll be chatting about at the show. Below is a lightly edited transcript of our chat. After you’re done reading, grab your ticket to Articulate to join the conversation in person.

The Spoon: How are people using Byte fridges right now?

Lee Mokri: We’ve got two kind of segments of our business. One is this full service segment, where we’ve got our 600 fridges in the market that we place in large offices like Amazon, Tesla, and Cisco, and Chevron, and others, as well as small non-profits, law firms, ad agencies. An employee of that location walks up to the fridge, they buy their food directly from the fridge and walk back to their desks and it’s a big win for the employer because their team is more productive, they’re happier, they’re healthier because they have fresh food on site.

Before Byte, there were very few choices for the employees and employers. It’s either no food on site or traditional vending which is chips and sodas. Most companies see that as being on the wrong side of this healthy eating trend. The other option to them was full service catering where they have to 100 percent subsidize or give away either fresh food or snacks to their employees, which is very expensive.

With Byte there’s a small monthly fee and then their employees have access to fresh healthy food 24/7 that they buy directly from the fridge.

That’s one piece of our business, but we just opened up our platform to licensee partners. So food service providers and retailers, traditional vending operators, and office coffee service operators; they’re able to leverage our platform to sell fresh food in offices around the country. There’s a lot of talk about work places being the next battle ground for retail and Byte is the true leader in the space. Nobody else is selling physical goods in an office beside Byte and we’re able to do that because of the technology that we developed.

So how are people using these Byte fridges? Are you finding that people are snacking throughout the day or are they grazing, are they going once or multiple times? What kind of things are they buying?

If you look at our sales throughout the day, the bell curve of our sales, they begin early in the morning, 6am with people starting to trickle into the office and can grab breakfast or a breakfast replacement drink. But if you look at the sales throughout the day, by far, the peak sales time is noon. So the majority of people are buying sandwiches, salads, and lunch. But we’ve got these [Byte Fridges] in 24 hour locations like we have a factory or the Chevron refinery or hospital locations where there’s employees and customers buying food 24/7.

Before they shut down you did a deal with the meal company Chef’d to provide meal kits in Byte fridges. Have you explored any kind of similar uses for people to sort of not eat at their desk but sort of a grab and go?

Well the reason we launched the partnership with Chef’d is from our perspective it broadened our sales capacity. We had breakfast and lunch and snack and drinks covered, but we didn’t have a dinner option. We thought it was a great opportunity for both companies as well as our customers and our clients. Employees could theoretically stay later at the office because they had dinner covered. There’s an interesting stat that said by 4 p.m., 72 percent of the people don’t know what they are going to do for dinner that night and this was a great solution to that question.

Another reason that we began working with Chef’d, and the reason we kind of opened up our platform to other licensee clients, is because they’ve allowed us to give them another mechanism to reach their customers. Traditionally, it’s always been this pull mentality. With Chef’d, they needed to run ads on Facebook and social media to pull customers to their website. With grocery retailers they are trying to pull customers into their stores. With our technology our clients are now able to push their products to where customers are. So that was a benefit for Chef’d, rather than incurring the cost of customer acquisition and retention, they were able to sell their products where their customers are spending the majority of their day, typically in the workplace.

A lot of these clients that we’re working with, they see the Byte fridges as building out this Omni channel approach where they’ve got the products in the store, they’ve got a presence online, but what Byte allows them to do is have products at hand. Where if you’re hungry and you want to grab a sandwich from a local grocer, you don’t want to drive to the grocery store or walk a few blocks to the grocery store. You can just walk a couple a couple of feet from you and grab that same sandwich. The idea is that those products are always at hand to their customers.

So there’s a lot of competition in the healthy eating space, and in particular providing healthy food for offices. Where do you see yourself carving out your space among all of these players?

With these competitors, they’re focused on the maybe 5 percent of the market that is able to give food away their employees–100 percent subsidized foods. LinkedIn, Google, Facebook, they’ve got these unlimited budgets to give away fresh food to their employees, and they’re spending millions of dollars a year to do. There’s clear ROI to doing that. But for smaller companies, fresh meals aren’t an option for a number of reasons, like budget. And in those cases the only other option is bags of chips and shelf-stable snacks.

So what Byte has done is created a third option for these companies. They want the ROI and the productivity gains of having fresh food on site, but don’t want to 100 percent subsidize. So with Byte’s technology you can place the fridge [in the office], the employee can buy the food, but the client can also subsidize by as much or as little as they’d like. So they can subsidize the food in the fridge by 50 percent or 10 percent so the employee is still getting that benefit of fresh food at a really good price. It’s the ability for an employer to offer fresh foods to their employees without having to give it away.

What do employees want from a food service and what do employers want from a food service?

Affordabillity is the case from an employer perspective and that’s why they’re turning to Byte because 100 percent subsidized catering options aren’t an option for that company. So affordability is important to the employers that we work with. Healthy food is very important to the employers that we work with.

From an employee perspective, from what we’re seeing is they appreciate seeing brands that they recognize and maybe eat at home. So we carry a lot of the brands that you would recognize from shopping at a Whole Foods or local grocery store.

So variety is another piece that’s important. We carry almost 200 SKUs across many, many food providers. So always adding a level of variety in the fridge every day, which demand plan and algorithms are trying to predict exactly what that office will eat each day and then we deliver based on that demand that we’re predicting. What we’ve seen is employees are willing to eat the same breakfast and snack options each day. A lot of people eat hard boiled eggs each day or overnight oats each morning. But for lunch and dinner options, they’re looking for variety.

Do you have a favorite fictional robot and if so, what is it?

My favorite robot would probably be the Terminator. I mean I’m thinking Terminator 2: Bad ass but he’s also compassionate trying to save Sarah and her son.

ArticulATE Q&A: BreadBot’s Human Boss on What Consumers Crave and Stores Want

Surprisingly, two of the biggest stories out of this years’ Consumer Electronics Show (CES) weren’t about TVs or drones, they were about… food.

On the one hand, you had Impossible impressing with its new meatless burger. And tucked away in the South Hall of the convention center, a bread-making robot was busy baking loaves and grabbing headlines.

BreadBot is basically a mini-bakery that can autonomously make just about any type of dough-based bread (white, wheat, sourdough, etc.). BreadBot makes 10 loaves of fresh bread an hour that consumers take home basically straight out of the oven.

After seeing the BreadBot in action, we knew we wanted them to participate at Articulate, our upcoming food robotics and automation conference in San Francisco. Randall Wilkinson, CEO of Wilkinson Baking Company, the company behind the BreadBot, will in fact be speaking at Articulate. Before he takes the stage, though here’s a recent Q&A The Spoon did with him that will give you a sneak peek at (some of) what he’ll be talking about at the show. (The Q&A has been lightly edited for clarity.)

THE SPOON: What is the BreadBot go-to market strategy? How do you see it being deployed?
RANDALL WILKINSON: We see a number of different areas that the BreadBot would fit into. Clearly the greatest volume of bread in the country and worldwide is sold in grocery and retail, and that is our strategy. We have three of the top five grocers in the U.S. that will be starting pilot test projects in the second quarter of 2019. In those stores BreadBot will typically be an installation in the perimeter of the store to engage the customer to give them the fresh bread they are looking for. But foodservice delivers a lot of bread in all sorts of institutions (airlines, etc.), also the military. The U.S. Navy was one of our first customers, using it for service the sailors and soldiers.

What are the advantages of using Breadbot? What is your pitch?
The most important thing for a retailer is that they provide what the customer wants. And forever what the customer has wanted fresh bread at a reasonable cost. More recently, the awareness of the use of preservatives, artificial ingredients, etc., have been a concern and so the healthiness of bread has been important. That includes the concern over the sugar that is added to bread unnecessarily to compensate for the lack of freshness. And there are also concerns that the consumer has about supporting local production, and not congesting the highways with trucking things in and the environmental impact that those things have. So all of those are concerns that consumers have.

But at its core, [consumers] want a lot of taste for value. And so BreadBot first of all delivers on the consumer’s desire for fresh bread, and the engagement of being able to transparently see their bread being made, to take home the loaf of bread they saw come right out of the oven, to engage in the store with the aroma and the tactile senses of taking your own warm loaf home. The halo of that sort of thing extends to the whole store and so stores are very much interested in that.

All of those are good reasons for a store [get a BreadBot], but what makes BreadBot even more compelling for a retailer is that the production in the store eliminates the distribution costs of the light fluffy loaves from central factories to the thousands of store shelves, which turns out to be a very expensive thing to do for merchant bakers. And if you do that production at the store, you save a lot on the production and distribution of that bread and that either becomes dramatically higher profits for the store or a more competitive position for the store being able to sell a premium loaf of ultimately fresh bread at a lower cost than the competition.

The BreadBot was a hit at CES. It seems like, pardon the pun, theatricality is baked into the BreadBot, so you want this to be front of the house for people to see?
Yes, absolutely. All of the grocers we’re talking with are facing the challenge of engaging their shoppers. What reason is there to come to the store when they can order online? So the stores are very much interested in what they can do to delight and engage their shoppers.

You know, bread has been dying or stagnant category for retail for decades. And the casual observer would think that for us coming to CES with an announcement about bread would be just about as ho-hum and unremarkable and announcement as one can imagine. Instead, what we had was an announcement that went viral. We think that the reason is not that people have given up on bread, but what they had given up on was that center-aisle bread that had been baked how many days ago and has no real punch or life or pizzazz to it. Knowing that they now have the opportunity to go into their grocer and pick a loaf of bread literally out of the oven apparently was really exciting to millions of people.

When building the BreadBot, how do you combine the art and science of bread making, when designing a robot like this?
The reason that this has never been done before — and we have the patents and intellectual property surrounding it — is that it’s hard. Anybody who’s tried to make bread knows what that means, because you take someone and you give them a recipe and you take three cups of this two teaspoons of that, you mix it up put it in the pan and you take it out of the oven and whoa, this didn’t come out the way grandma made it. So it’s a nuanced production that depends on the age of yeast, conditions yeast was stored under, the ambient temperature, ambient humidity, all of these different things and more. It is typically not something that a machine has the sophistication to do. In fact, we had to mothball the project for years because the sensors, and the kinds of things we needed weren’t available yet, and it’s only recently that they’ve become available.

What we’re now able to do is to monitor on an ongoing basis all of these different parameters and then on the fly continually adjust to changing conditions and whatever is needed to bring about that optimal loaf of bread. It’s a self-adjusting intelligent production system.

What is your favorite fictional robot?
I’ll have to go with Wall-E. He was trying to save people from themselves. In our own way, we think bread ought to be healthier than what it is. We ought to be improving the quality of bread that people get, and helping people end up on the right side of healthy food.

Robots and automation are coming to the food industry, and Articulate is an entire day devoted to the technological and societal implications of these impending changes. Check out our stellar lineup of speakers, get your ticket, and join the conversation at Articualte, April 16 in San Francisco.