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Daily news and analysis about the food tech revolution

Byte Technology

The Great Vending Reinvention: The Spoon’s Smart Vending Machine Market Report

Thanks to advances in hardware, the internet of things, and food preparation, vending machines today are basically restaurants in a box. They offer high-end cuisine in minutes, require minimal setup time, and have the on-board computing smarts to manage inventory and communicate any issues that arise.

With these capabilities, it’s no wonder the vending machine category was valued at more than $30 billion in 2018, according to Grandview Research, and was anticipated to have a CAGR of 9.4 percent from 2019 through 2025.

Had this report been written even just a few months ago, the main takeaway would have been that vending machines are perfect for high-traffic areas that operate around the clock: airports, corporate offices, college dorms, and hospitals.

But we’re living in a world continuously being shaped and reshaped by the COVID-19 global pandemic. Right now, some form of shelter-in-place orders blanket most of the U.S. Global air travel volume has plummeted, so airports are not busy. Non-essential businesses are closed and people are working from home, not office buildings. And colleges may not hold in-person classes until 2021.

While on the surface, those factors suggest vending machine companies will be yet-another sector wiped out by coronavirus, there has actually never been a better time for the automated vending machine industry. The small footprint and high-end food these devices offer are perhaps more important than ever at a time when minimizing human-to-human contact in foodservice is paramount to doing business. That makes the vending machine market uniquely positioned to capitalize on a post-pandemic world.

This report will define what the automated vending machine space is, list the major players, and present the challenges and opportunities for the market going forward.

Companies profiled in this report include Alberts, API Tech/Smart Pizza, Basil Street, Blendid, Briggo, Byte Technology, Cafe X, Chowbotics, Crown Coffee, Farmer’s Fridge, Fresh Bowl, Le Bread Xpress, Macco Robotics, TrueBird, and Yo-Kai Express.

This research report is exclusive for Spoon Plus members. You can learn more about Spoon Plus here.

NÜTY Rolls Out Smart Chillers That Let Customers Buy Food With WhatsApp and WeChat

Ray Nathan had a problem.

The longtime technology entrepreneur and investor had spent years and a significant amount of his own capital to create a line of fresh, direct-to-consumer Indian food under the brand NÜTY, only to find traditional Indian retailers were not well equipped for the type of cold-chain continuity required for such a premium product.

One solution would be to use a fresh-food vending machine like Farmer’s Fridge or Bite Kiosk but, as it turns out, these automated cashierless food retail machines had yet to make their way to India. So Nathan did what any self-respecting food company founder who had also built his own tech company in a previous life would do: He built his own solution.

Conceived as a sister company to NÜTY Foods, Nathan decided to start NÜTY Technology to make IoT powered smart chillers which would keep his food at the right temperature until purchased by the consumer.

The chillers, which Nathan and his company had on display this month at the IoT Fair in India, give customers the ability to buy in person using NFC or through social apps. In India, that means Whatsapp, which allow consumers to buy food through the chat function.

To buy food from a NÜTY chiller with WhatsApp, the user simply opens the app and starts a conversation with NÜTY, finds a chiller near them and orders by texting the word pay. From there the chatbot sends a pay link. Once they pay, the consumer is free to pick up their food at the designated chiller.

The company is also testing their food chillers in China with WeChat as the conversational commerce platform. WeChat has become an entire commerce ecosystem in and of itself over the past few years with its mini-program platform, which NÜTY’s ordering and payment app is built upon.

The food inventory is tracked using RFID. Each chiller is outfitted with an “RFID set top” and has internal RFID sensors can track up to 30 or 40 products at a time.

Today Nathan’s chillers are in 80 locations, including across office parks, coworking spaces, cafeterias and shared living spaces, and he has plans to roll them out across India and in certain cities in China and, eventually, into the US market.

While mobile payments are taking off in every region, countries that embraced superapps like WeChat and WhatsApp for payment have moved faster than other regions. China in particular has pulled ahead of pretty much everyone else, where some estimates have mobile payments adoption above 80% of transactions.

As we’ve written here for some time on The Spoon, interest in next-generation vending machines and kiosks has been growing in recent years, with self-service fresh food kiosks being as one of the more interesting categories. In the US, players like Byte and Farmer’s Fridge have emerged as an alternative to cafeterias, local deli or the fresh food aisle at your grocery store, but in markets like India options like the NÜTY chiller could help to actually serve as a critical platform to enable the availability of high quality packaged fresh food.

Oh My Green Acquires Byte Foods Business from Byte Technology

Oh My Green announced today that it has acquired Byte Foods, the food distribution and logistics service of Byte Technology. Terms of the deal were not disclosed.

Before we get too far, it’s important to make the distinction between Byte Foods and Byte Technology. In 2015 Byte launched its own line of smart fridges for offices that wanted to provide healthy eating options for employees but weren’t able to afford a full catering solution. As we wrote back in 2018:

To use the fridges, employees simply swipe a credit card and pick what they want. A receipt for each purchase is sent to their email address. Each food item has a disposable RFID tag on the bottom, which Byte supplies to their producers. Before and after the fridge door opens, Byte scans the tag to determine what the employee took, then charges them accordingly. Each fridge also features a screen with nutrition and dietary information as well as prices.

Since its launch, Byte Foods had grown to 500 smart fridges installed around the Bay Area. But those locations all had to be managed and stocked by Byte, and owning and operating your own mini-stores is not a super scalable business for a startup. So in 2019, Byte bifurcated into Byte Foods, which managed its own fridges, and Byte Technology, which is responsible for the underlying technology and software management platform that powers Byte’s fridges.

Instead of deploying its own fridges, Byte Technology sells the hardware and licenses out its platform to food providers like grocery stores and restaurants. These food providers can then wrap these smart fridges in their own branding to extend their sales channels to where people are — namely at work — without the cost of building an entirely new permanent physical store. Through Byte Technology’s platform, these grocery and restaurant licensees get access to all the data from their customers, as well as inventory management tools and analytics.

By selling its Foods business, Byte Technology will be able to focus its energies on the much more scalable software side of the business. Byte Technology currently operates 1,000 smart fridge stores across the U.S., and with this acquisition, OMG will become a customer of Byte Technology.

Like Byte, Oh My Green is an office catering startup based in the Bay Area. OMG offers a full suite of food related services for corporations from chef-made catering to stocking the office room with snacks. OMG has raised $20 million in seed funding and with the acquisition of Byte Foods’, OMG will be able to offer an additional, Goldilocks-like sales option for companies that want to provide more than snacks but less than full catering.

In the press announcement, OMG says that in addition to offices, the company plans to provided smart fridge storefronts to hospitals, government facilities and universities.

OMG’s acquisition is another step into the forthcoming golden age of vending machines that we are entering into. Smart fridges like Byte’s, and robots like Chowbotics’ Sally are providing new levels of fresh food to high-traffic areas 24/7.

Byte Foods Opens up Its Smart Vending Platform With Byte Technology

Byte Foods officially announced yesterday that it is shifting its focus from a company that owns and operates smart fridge vending machines into Byte Technology, which licenses out its technology platform to third party retailers.

The move is something the company has talked about openly before with The Spoon. Byte Co-Founder, Lee Mokri, told us about the shift in a Q&A in February, and earlier this month, Byte CEO and Co-Founder, Megan Mokri mentioned it in our Spoon Slack Chat on food robotics and automation, saying:

Byte enables food retailers of any size to embed their storefronts in places where consumers spend time away from home – at work, in healthcare settings, hotels, universities, etc.

It’s this ability to push retail out to high-traffic locations that makes Byte’s move particularly interesting. Rather than trying to pull shoppers into a store, retailers can push their stores out to where people already are. As Lee Mokri told me in our Q&A:

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 of feet from you and grab that same sandwich. The idea is that those products are always at hand to their customers.

The Byte shopping experience is also a data-rich one, as it can track exactly which products are being purchased, when and at what location. These analytics in turn allow the retailer to better manage their inventory. They can direct particular products to locations where they are most popular, and re-stocking can be done with more precision, making the retailer’s supply chain more efficient.

But the shift to more of a technology platform also benefits Byte because it allows the company to scale in a way that it couldn’t do by solely operating its own machines. Byte doesn’t need to build up its own brand recognition or develop robust sales channels because it can leverage that of its retail partners. A partner’s brand recognition should, ideally, drive more sales as consumers will know the brand they are purchasing from. These sales will generate more data that can be used to make Byte’s underlying software platform smarter.

We see a lot of companies in the food tech space choosing to be more of a platform for other services, rather than trying to just go it alone. Eatsa backed away from running its own restaurants in favor of licensing out its automated services to power others like Wow Bao, Mac’d and Deliveroo’s new food hall. And Robby partnered up with Pepsi to create branded delivery robots to drop off snacks on campus for hungry college students.

We’ll have a chance to catch up and learn about Byte’s platform transition with Lee Mokri, who will be speaking at our upcoming ArticulATE food robot and automation conference in San Francisco on April 16. He’s just one of the awesome speakers sharing their expertise throughout what promises to be an amazing and insightful program. Get your ticket today!