by Bob Benenson, FamilyFarmed

When you visit one of the nearly 200 Farmer’s Fridge locations, what you see is a sophisticated vending machine that dispenses delicious, restaurant-quality salads, grain bowls and snacks in recyclable jars and, recently added, sandwiches made with bread from one of Chicago’s leading bakers, Publican Quality Bread.

But to founder and CEO Luke Saunders, describing his Fridges as high-tech salad vending machines is only the tip of the romaine. “In reality, I always looked at this as a technology-driven supply chain problem,” Saunders said.

With a business designed around an app that enables customers to view what products are available in their local Farmer’s Fridge, Saunders continued, “We have a big enough network that we’re really starting to leverage technology in a meaningful way to match supply and demand at the Fridge level and even create consumer demand to help us push products.”

Farmer’s Fridge, a company that is just five years old, has grown to nearly 200 locations. Its high-tech vending machines — like these at a showcase location in Chicago’s famed Merchandise Mart — deliver restaurant-quality salads, grain bowls and sandwiches, while enabling customers to check product availability using an app. Photo: Bob Benenson/FamilyFarmed

The combination of delicious products that customers love, a logistics system that ensures that each machine is turned over daily with fresh items, and a disruptive technology enhancing the consumer experience, all have combined to make Farmer’s Fridge a hot ticket among some of the savviest Good Food investors.

As Crain’s Chicago Business first reported on September 5, Farmer’s Fridge completed a $30 million financing round. The lead investor is Innovation Endeavors, co-founder by former Google CEO Eric Schmidt. Four leading Chicago venture capital firms — Cleveland Avenue, DNS Capital, DOM Capital, and Hyde Park Angels — also weighed in. Saunders, who was named to Forbes magazine’s “30 Under 30” list, has emerged as one of the city’s leading young entrepreneurs. (Chicago Tribune also published an article about the company’s successful financing round.)

All this makes FamilyFarmed exceedingly proud that Saunders, who recently joined the Chicago nonprofit’s Board of Directors, credits his participation in the organization’s Good Food Financing & Innovation Conference with giving Farmer’s Fridge a critical boost.

“We got plugged into a valuable network and met a ton of people, including buyers, mentors and investors, and have continued to get more and more involved over the years, because FamilyFarmed has grown its programming so much,” Saunders said. “Just watching your organization continue to grow the network and witness how many new people are entering the space has been really transformative for the business.”

FamilyFarmed recently nominated Farmer’s Fridge for a Chicago Innovation Award and the company is now a finalist. The company is also up for a Chicago Innovation People’s Choice Award, with online voting open to the public through Oct. 5.

The company’s growth can be seen in the number of Fridge locations and its rising sales statistics, but also in the physical space of its Chicago headquarters.

Luke Saunders’ early success with Farmer’s Fridge gained him recognition as one of Chicago’s fastest-rising entrepreneurs. The company’s office shown in this photo taken July 30 is already undergoing a renovation and expansion. Photo: Bob Benenson/FamilyFarmed

When I first interviewed Saunders for FamilyFarmed in early 2016, his office was in the same building in Chicago’s West Loop as the commissary where Farmer’s Fridge menu offerings are processed, and it was so cozy that we sat practically knee-to-knee. Now Farmer’s Fridge is in the burgeoning West Fulton Market community, a tenant in the Industrial Council of Nearwest Chicago’s incubator complex — and has already outgrown its original space, which is being renovated and expanded to accommodate more employees.

The most amazing fact is the fast rise of Farmer’s Fridge has occurred over just five years. The idea for the company struck Saunders as a recent college graduate, when he was working as a traveling salesman and confronting the challenges people on the go face when seeking easy, fast and healthy food options. “The business model was always about taking the inefficiencies out of the supply chain to connect consumers directly with the food that they actually wanted to be eating at any given time,” Saunders said.

Saunders from the start prioritized and responded to customer feedback, mostly through surveys, though he made pop-up visits to Farmer’s Fridge locations to meet and chat directly with customers. But the technology developed by the company has provided volumes of insights that enable their analysts to determine what products are selling best in each machine and which are lagging.

This information enables them to tailor each Fridge’s selections to the preferences of that location’s customers. It also allows consumers, using the app, to check and make sure that the exact product they want is stocked in their nearby machine.

“You would be very surprised if every time you walked into your average QSR [quick-service restaurant], half the menu was unavailable for purchase. Intuitively validated by customer research, we knew we had to solve these problems. So it’s not that we’re so smart, it’s just really dedicated to that consumer experience and solving those problems,” Saunders said.

While the flavor and the freshness of the salads made them immediate hits, the sandwich selection went through trial and error until recently, when Farmer’s Fridge arrived at what appears to be a can’t-miss formula: sandwiches served on bread by Greg Wade of Chicago’s Publican Quality Bread, who in each of the past two years has been a James Beard Foundation Award finalist for best baker.

“That’s really the third or fourth iteration of our publicly available sandwich. It’s probably the 10^th or 20^th iteration of our not-publicly available sandwich,” said Sanders.

Farmer’s Fridge is located in the Industrial Council of Nearwest Chicago’s incubator complex in the West Fulton Market neighborhood. Emerging food businesses are leading the revival of an industrial area — not far from the thriving, food-centric West Loop and Fulton Market — that had been in decline. Photo: Bob Benenson/FamilyFarmed

While most Farmer’s Fridge locations are in Chicago, the company had already begun reaching out to other cities, starting with Milwaukee, 100 miles north. This regional expansion will accelerate now that the company has $30 million in new investment with which to work.

But Saunders is well aware that his success is rooted in the freshness of his offerings, and for now is looking to expand only to cities that are in reasonable driving distance from that Chicago West Loop central kitchen.  “We’re currently looking at launching anywhere within a five-hour radius, which includes Indianapolis, Cincinnati, St. Louis, Detroit, places like that,” he said.

The success enjoyed by Luke Saunders makes him a role model for early-stage food entrepreneurs, including those who participate in FamilyFarmed’s Good Food Accelerator. This six-month intensive development program is currently in process of reviewing applications, received by the September 13 deadline, for participation in the fifth cohort of entrepreneurs that gets under way in November. Visit the Good Food Accelerator site for more information about the program and for announcements about the new cohort.