A trip to the vending machine for food is rarely a first choice but a mere act of desperation. In need of a quick fix, we are often relegated to choosing from chips and candy bars as we trade health for convenience. Pantry is hoping to reinvent grab-and-go with the launch of its proprietary kiosks that enable 24/7 access to healthy food and beverages.
Vending machines have long been a staple in the breakroom, but in the past 10 years the industry has been in a steep decline. The average annual growth is expected to increase at a paltry 0.7 percent for the time period of 2010-2015, according to research firm IBISWorld. The lag in growth can be attributed to consumers' change in tastes and desire for higher quality, wholesome options.
Founded in San Francisco, in 2012, Pantry is giving the traditional vending machine a big upgrade with its sophisticated technology platform and network of local and regional food providers like Byte Foods, Mixt Greens, Aramark and Sodexo that provide fresh, seasonal meals and snacks in its refrigerators.
At the core of Pantry's offering is RFID technology, which allows it to track which items a customer removes from the refrigerator and automatically charge the credit card that was used to unlock it. On the backend, Pantry can provide analytics to its food partners, so they can forecast which items need to be replaced as well as optimize its offerings for day, time and even weather.
"We had rain in San Francisco the other day, and we saw sales go through the roof," said Russ Cohn, CEO of Pantry. "If we can predict that a day in advance, then we can get food to where it is going to be needed in a predictive way rather than a reactive way."
But convenience and quality will come at a higher price point. Food and drinks from a Pantry kiosk cost on average $5-10, whereas snacks from a traditional vending machine cost $1-2. So far price doesn't seem to be a deterrent with Pantry reporting that customers often use its machines two to three times a day.
Earlier this year, Pantry piloted its kiosks in hundreds of workplaces, hospitals, universities and hotels across the country. Some of its initial customers include IDEO, Cisco Systems, UCSF Medical Center, North Hawaii Community Hospital and Stanford University Medical Center. The company said it expects to be in thousands of locations soon.
"We think we should be wherever people are hungry, and that is basically every corporate office, hospital, university and hotel," said Cohn.
But Pantry is far from being the only company that is looking to get healthy food into consumers' hands. Dozens of food services like Munchery, Sprig and Caviar have made on-demand food delivery seamless. (Munchery's vice president of food, Nicolas Bernadi, also sits on Pantry's board.) While Cohn sees some instances where it might compete against those services, he also sees an opportunity for Pantry to fill a need where there might be no other options. "Yes, we compete with them a little bit, but more likely than not, we fill in gaps where there is really nothing and people are going hungry."
In addition to its public launch, Pantry also announced it closed a $1 million round in seed funding led by Aileen Lee and Cowboy Ventures to continue the company's expansion. This brings the total money raised to $2.3 million.