JOHN SHEGERIAN: Welcome to another edition of Green is Good. I’m so excited to have with us today Luke Saunders. He’s the CEO and founder of Farmer’s Fridge. Welcome to Green is Good, Luke! LUKE SAUNDERS: Hey! Thanks for having me on. JOHN SHEGERIAN: Hey Luke, you’ve built and started this important new business that our listeners are dying to hear about but before we talk about Farmer’s Fridge, talk a little bit about the Luke Saunders journey. What was your life like prior to founding this company and what led up to this? LUKE SAUNDERS: Sure, so I’ve been entrepreneurial my whole life. I had a business in college where we rented bicycles on campus to encourage people to take bikes and then when I graduated I got a job working in industrial lubrication. It was something that I kind of knew about, had some family in the business, and definitely not what I was passionate about but gave me a good solid business background and I did that for about four years and I was driving around a lot for work doing sales call and then I realized that there had to be a better way to distribute healthy food. JOHN SHEGERIAN: And that led to the epiphany and the idea of starting your new company, Farmer’s Fridge. LUKE SAUNDERS: Yeah, exactly so I mean it’s kind of a stretch to go from I was visiting factories and I was seeing how industrial food was made and realized you could use the machine but in a way that you’re delivering hand made food instead of industrial food. JOHN SHEGERIAN: Got it, and I want you to explain what Farmer’s Fridge is but before we go any further, I’m on your website now and for our listeners out there who want to follow along on their phone or their mobile device or their laptop or desktop, it’s www.farmersfridge.com. It is one of the prettiest and most gorgeous and most hunger-inspiring websites I have ever seen. The fruits and the vegetables are the most fresh and crisp looking products I have ever seen so walk us a little through what is Farmer’s Fridge and what is the new vending kiosk and what is the differentiators between your concept and what’s out there today? LUKE SAUNDERS: Sure. Obviously the quality of the food that you’re talking about is extremely important. Prior to Farmer’s Fridge and still I don’t know that there’s anybody who’s taken restaurant quality food and put it into a vending machine so that was really a big step. There’s definitely a movement towards fresh food in vending machines. I talk with people in the vending industry all the time and they get a lot of requests for this but it’s really not something that has been done very well and it’s a little bit haphazard so they just kind of throw stuff in there and see what works. What we wanted to do was create a brand dedicated to fresh food in a vending machine, a vending kiosk, and we only put things that we make in our kitchen in that kiosk and then the kiosk itself had to be very different so there’s a touch screen where you can see big shots of what the food looks like before you buy it. You get the nutrition information. You can get all of the ingredients. You can actually add items as you’re checking out so when you buy one of those delicious looking salads, you get to add chicken or a snack or a drink and it all comes out at the same time, unlike a normal vending machine. JOHN SHEGERIAN: When did you launch this first machine? LUKE SAUNDERS: We launched the first machine at the end of October. JOHN SHEGERIAN: Of 2013? LUKE SAUNDERS: Yes, 2013. JOHN SHEGERIAN: I’m looking at the machine and it is just so warm and inviting and it’s just more than just a machine. You put a lot of thought into the machine itself. Can you take our listeners through the thought that you put into both making the client experience really good but also making a machine that’s just not a typical vending machine? It’s very sustainably oriented. LUKE SAUNDERS: Yeah, so we knew there was a huge hurdle to get people to the point where they were going to be able to buy restaurant quality food out of a kiosk. They can’t touch it. There’s nobody there to explain it to them so we spent an enormous amount of time just thinking about what are people going to think when they first walk up to this and how do we compete with a fast casual restaurant in terms of the experience that someone can have? We started with the packaging, which you can see from the picture is extremely appealing. It has a really unique way about it. It’s not something that you just will find anywhere. The kiosk itself is covered in plants. There’s reclaimed wood all over the outside so we actually use real reclaimed hardwood to cover the machine and it’s a huge presence. It’s about ten feet tall with the signage and everything so when you walk up to it you immediately kind of get a sense that a lot of energy has been put into this and it must be in to their food as well. JOHN SHEGERIAN: I’m looking at all these. Really your menu, the salads, the antioxidant salad I’m looking at right now, and how you break out everything on that, your breakfast, the Greek yogurt and berries, and the lemon pepper chicken, you’re so transparent and it’s so appealing, both in terms of what’s in it but also how you package everything and explain everything. It’s so well done. What’s been the response to this first kiosk, this first vending machine that you’ve put up? LUKE SAUNDERS: It’s been actually enormous. Even the day before we opened, I was not sure if people were going to go for this. What’s the reaction going to be? We’re in the middle of a food court and yeah, the product was great and we had a lot of people taste it and tell us it was great but was there just going to be too much of a gap between great product and this kiosk? Was it going to put a barrier to people actually buying stuff? And what we found on the first day was there was just some people who jumped right in. They tried it and were excited to try it and you know, a lot of it was in how we differentiated the products so much so we follow about a dozen guidelines for the produce that we use so one of our first customers -We had been there for about a week beforehand handing out coupons for opening day- and she walked up and said, “I don’t know how you do that. I don’t think there’s another restaurant that does that,” and she came back every day for a few weeks. We really put a lot of time into thinking about what would drive really loyal excited customers and that worked, I guess, from day one so we had people walk right up and just try it. JOHN SHEGERIAN: Wow, and so now you have it. It’s going and how did you even come up with the recipes? Even though you like food, I take it, do you have some sort of background in recipes or food creation or who do you turn to for this? LUKE SAUNDERS: I had nothing, no food experience. I had manufacturing experience. I knew how to make a product once you have a formula but yeah, what I originally did was, I was living in Ann Arbor. My wife was finishing law school and there was a local cafe that had amazing healthy food. It all tasted good but was still healthy so I actually approached them. I said, “Listen, I know nothing about this. I have this crazy idea. I want to put really high quality food into a kiosk to make it more accessible,” and it was really funny. It’s a husband and wife and one of them was like, “That’s a great idea.” The other said it was a terrible idea and they kind of debated it for a while but they were like, “We’ll help you. You’re young and we want to see other people be successful.” JOHN SHEGERIAN: That’s nice. LUKE SAUNDERS: They started by letting me kind of work in their kitchen and showing me how to come up with a recipe so they had given me like a formula. You know, use some nuts and some cheese and some different vegetables that you might not find everywhere and some lettuce of course. Just to create a meal level salad, you need to have all those different ingredients. And then from there we kind of used that as a formula for making everything else and that’s easy. Once someone shows you here’s how to think about it, we go and we look at, okay we want to make a high protein salad, you just look up what are the most high protein vegetables out there? What can we use in the dressing that has a lot of protein? And then we mix and match like crazy until we find something that everyone tastes and says, ‘Yeah, that tastes great.’ JOHN SHEGERIAN: Great! And so you came up with all these recipes with this nice couple who already was in the business and — LUKE SAUNDERS: Just to clarify, they kind of gave us a formula but all of the recipes, with the exception of one or two, we actually came up with on our own after that. JOHN SHEGERIAN: Wow, that is great. Then who makes the food for you now on a regular basis? Who is your producer of all the foods that go into the kiosk and how does this whole thing run? LUKE SAUNDERS: Sure. So we actually have a commercial kitchen space that we rent and right now, it’s me and then there’s four cooks and so every morning, everybody shows up and we kind of get everything ready. It’s actually we do everything internally and part of that is it allows us to respond very quickly so if we come up with a recipe that we think will be really great and it’s not, we can stop making it or if we come up with something that’s great, we can put it in the machine very quickly and it allows us to be very flexible and really keep the quality up. Initially, when I was thinking about starting this, I looked at having other people do the product and it wasn’t possible to keep the quality at the level that we wanted and for the prices we wanted, it wouldn’t work, especially because we were doing everything in real time so we’re looing at what’s selling the day before to figure out what to put in there the next day at each machine and that kind of thing. JOHN SHEGERIAN: That’s so interesting. For our listeners that just joined in, we’ve got Luke Saunders. He’s the CEO and Founder of Farmer’s Fridge. He’s with us today and if you want to follow along, you can go to www.farmersfridge.com. Luke, couple things here. You’re in Chicago and you’ve launched this business in Chicago. Why Chicago? So many people think all the great food items come out of L.A. or San Francisco or New York. Chicago? Is that sort of a breeding ground, a ground zero, for great new food concepts and are you just following other great entrepreneurs who have done this before and started in Chicago or are you the new breed and new generation doing something different, starting in Chicago and then branching out to the coast? LUKE SAUNDERS: It’s a little bit of both. Part of it is that Chicago’s a great place to start a business, especially something like this that’s really new and experimental. Generally the logistics are easier. The costs are lower. The built-in demand for this kind of thing might not be as high but it also gives you lower stakes in getting all the kinks out before you go somewhere where people are going to be much more demanding and the stakes will be a little bit higher. I feel like being part of the Chicago ecosystem is a really great thing for us. The other thing too is that a lot of credit gets put on -I’m from New Jersey so I know what you’re talking about- but there’s a ton of innovative Chicago-based food concepts in I think this city in particular. They might not all have been exported out of Chicago yet but there’s quite a few really popular, especially in the healthy foods-there’s quite a few food concepts that come to mind that have started in Chicago and are branching out. JOHN SHEGERIAN: Got it. Got it. Got it. For our listeners to have a little bit more knowledge, Luke’s all in on this whole sustainability and green thing. Just some factoids that I was reading before we went on the air; your napkins are a hundred percent recycled. Your utensils are biodegradable. Everything you do -the paper labeling on your jars is limited. Mostly, you do screen printing of the information so this way your jars are more recyclable. The lids are a hundred percent recyclable on your jars. Everything you’ve touched with regards to this business concept and your model and what you’re modeling is all sustainability driven and I’m sure your clients have to appreciate that. Luke, what’s the next steps here? You’ve got one location. It’s really successful. Now, how do you grow this thing? You’re an entrepreneur. You know what you’re doing here, obviously. This has been a big success. What’s next? How do you grow? LUKE SAUNDERS: Right now what we’re doing, we’ve kind of opened the first one, we got it running how we wanted and then we just recently opened another one in downtown Chicago. It’s now kind of our flagship location in a high end mall right on Michigan Avenue and then we opened up a bunch of smaller locations in office buildings, in hospitals, places where people could – It’s a smaller machine but people were really asking for a healthy option. They might have odd hours so they can’t get away from their desk. That’s been our goal to have these big locations that generate a lot of interest and a lot of volume and then kind of fill it out with these smaller locations that literally will make the most convenient option for people so when people complain that the most convenient thing in their office is snack, chips, and candy, right next to it now will be the Farmer’s Fridge. JOHN SHEGERIAN: What’s your goal for 2014? How many more can you open this year without the wheels coming off the Farmer’s Fridge train? LUKE SAUNDERS: We don’t know. Honestly, there’s no answer because nobody’s done this before in a big way. It’s so exciting to say we’re going to have a hundred or we’re going to have two hundred or whatever the number is and people get really excited about hearing those numbers too but they don’t really mean much if we pick bad locations or if we can’t service them properly so at this point, we’re shooting for about twenty sustainable good locations so we have all the equipment for that. We have placements for all of those machines and we’ll kind of fine tune it. If we end up, from the batch, putting one in a place that doesn’t go great, we’ll move it but we want to make sure that we get a hundred percent of those twenty really working at the level that we want and we’re servicing them properly and everyone who has one says, ‘This is great. I love you guys.’ JOHN SHEGERIAN: Let’s have a little fun real quickly. When it comes to the locations, are you and your wife scouting them or are people calling you and emailing you saying, ‘Please come to our hospital! Please come to our school or our college!’ Or is it a little bit of both? LUKE SAUNDERS: You know, there are places we definitely want to be and initially, I had to like beg people to get anywhere but now, it’s definitely people approaching us so that’s, the problem is actually trying to figure out, okay you want it but is this really going to make sense at the stage that we’re at? Can we service the location here? Is it on our route? Is it good for selling our food? Yeah, we have a ton of incoming and now we’re just trying to be selective. JOHN SHEGERIAN: Are you raising money for your venture or is this self-funded? How is this working in terms of a rollout and the scaling? LUKE SAUNDERS: I was self funded all the way up until we opened the first kiosk and then from there, I was able to show that we had some traction and people were really excited about it and I took a loan for the balance of the equipment but we haven’t gone out and raised traditional venture money or anything like that and part of the reason is we have been able to raise money via a loan and it gives us more control over the future of the company. I’ve said this before but you’re talking about all the sustainable packaging and that was something that was really important to me. I felt like that would resonate with people and it’s not something you could say we pay one penny more for each napkin and this generates this many more sales, which is the kind of thing that an investor likes to see so now we can say people are really responding to this. Ask our real customers and they’ll tell you. It gives us the flexibility to make decisions that we really know, the people who are running the business day to day, are the right ones. JOHN SHEGERIAN: We’re down to the last couple of minutes or so here, Luke. Just a couple more questions. We have listeners, not only in the United States but around the world. This is a concept that could very well be coming to a city or state that you’re in in the United States in the future and then one day in the country that you’re in because we have listeners throughout Paris and London and Mumbai and Dubai and Shanghai and they’re out there. We get emails from around the world so you could be coming to one of our listeners real soon, huh? LUKE SAUNDERS: Absolutely. We’ve started taking meetings with people in different cities and different countries and at this point, we want to make sure that we are exporting or sending something to another city that will work and be successful for someone and we’re not quite there yet but we’re getting there and so we’ve started those conversations. We’re encouraging people to email us or to send us a note through the website and we have some forms that people can fill out to be on the first group of people that know hey, we’re ready. We want to go to a different city or a different country and they can help us. JOHN SHEGERIAN: So they can email you through the website, through farmersfridge.com, to reach you? LUKE SAUNDERS: Correct. We have a partnership form that we send to everyone who comes in and a couple people who are really serious, we’ve already starting talking to them. JOHN SHEGERIAN: Luke, we’re going to have you back on again later this year or whenever it’s convenient for you because we want to hear about how Farmer’s Fridge is spreading healthy food throughout the Chicago land and beyond. For our listeners out there who want to contact Luke or who want to find out more about the great business he started, it’s www.farmersfridge.com. Luke Saunders, thank you for bringing health food to all of us who are on the go. You are a fast food entrepreneur for a new generation of healthy eaters and you are truly living proof that green is good. LUKE SAUNDERS: Thank you.