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The Spoon

Daily news and analysis about the food tech revolution

Byte

Byte Adds Dynamic Pricing to Its Smart Vending Fridges

Byte Technology added dynamic pricing to its smart fridges this week, giving its clients the ability change prices of stocked items on the fly.

Through a combination of RFID and IoT, Byte makes smart vending refrigerators that allow shoppers to swipe their credit card, take what they want from that fridge and get charged automatically. The company licenses its technology platform to retail operations like supermarkets or restaurants, which brand the fridge to sell their packaged food (or anything really).

Because of the RFID tags and connectivity, a Byte fridge knows exactly what’s in its inventory as well as what items sold, when and to whom. With the addition of dynamic pricing, Byte fridge operators can now automatically discount items for just about any reason.

For example, if a fridge is stocked with fresh sandwiches, the operator can create a 25 percent discount on any of them set to expire. Because the fridge already knows everything about its inventory, it automatically knows which sandwiches this discount would apply to, so the operator doesn’t have to set a specific date or create a new rule each time. It could also run promotions on particular drinks, such as half-off carrot juice after 5p.m. on weekdays, or broader discounts like discounts on cobb salads every Monday.

By giving operators the ability to offer dynamic pricing, Byte hopes to reduce the amount of spoilage and food waste created through its platform. This type of dynamic pricing already exists in grocery stores through solutions like Wasteless, which algorithmically discounts food price based on factors like expiration date. And the Karma app teamed up with Electrolux to create special fridges in grocery stores that sell almost expired food for at least half off.

As I wrote about in my recent The Great Vending Reinvention: The Spoon’s Smart Vending Machine Market Report, the COVID-19 pandemic is forcing retailers to examine new, contactless ways of selling. Vending services like Byte’s offer the ability to sell products without human-to-human interaction. And though the pandemic has shut down offices, which were a main line of business for Byte’s machines, Byte Founde, Lee Mokri told me by phone this week that it is seeing increased interest from places like residential buildings.

Come to think of it though, having a smart vending machine in the lobby of an apartment building that can automatically discount a pint of ice after midnight might not be the greatest thing in the world.

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.