Friday, September 22, 2017 | Today's Vending Industry News
Byte Foods Inc. Plans To License Smart Fridge To Vending Operators Nationwide

Posted On: 3/27/2017

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TAGS: vending, smart shelf retail, Byte Foods Inc., smart refrigerator, professional vending operators, Lee Mokri, Megan Mokri, Pantry Retail Inc., fresh office foods, Mixt Greens, Blue Bottle, Urban Remedy, micro market

SAN RAFAEL, CA -- Up-and-coming Byte Foods Inc. is making its smart refrigerators available to professional vending operators. The San Rafael, CA-based company's push to expand deployment of its technology by opening it up to other vending operators comes on the heels of its announcement in late December that it raised $5.5 million in a seed round. The funding was led by Spring Creek Investment Management, a family fund based in Philadelphia with a focus on food and agriculture. Additional investors include Bolt Ventures, a hardware-focused group, and Bessemer Venture Partners, which has an interest in information systems, retail and healthcare.

Byte Foods' husband-and-wife cofounders Lee and Megan Mokri began as licensees of the technology. Last May, Byte Foods acquired Pantry Retail Inc., the hardware and software provider for the intelligent swipe, grab and go refrigerators that Byte operated in the San Francisco Bay Area. The Mokris previously ran a business called 180 Eats, which delivered chef-prepared meals to subscribers. They licensed the Pantry technology, as an alternative to distributing individual meals, and became Pantry's biggest licensee before buying the company.

To use Byte's system, customers swipe a credit card to open the cooler's door and take as many items as they want. They are only charged for what is removed. Byte applies an RFID tag to each item to charge the patron. A customer checks out and gets a receipt on their phone or computer.

Byte Foods, smart shelf, vending
THAT'S COOLER: Byte Foods' Pantry system consists of an attractive cooler and POS screen with card reader. Patrons swipe a credit card to open the cooler's door and take as many items as they want. They are only charged for what is removed. Byte applies an RFID tag to each item to charge the patron. After checkout, a receipt is sent to a user's phone or computer.

Since Byte's acquisition of Pantry, the Mokris focused on building the footprint their own smart fridges in San Francisco's Bay Area. Byte stocks its pantries daily with a rotating selection of salads, sandwiches, soups and other items from local brands, including Mixt Greens, Blue Bottle, Urban Remedy and Project Juice. Chevron, Amazon, Autodesk, the KQED and CBS television stations, the University of California, Sephora and SolarCity are among its local clientele. Byte also provides smart-fridge services to smaller clients -- those with fewer than 100 people -- which in the Bay Area includes law firms, ad agencies, nonprofits and tech firms.

Additionally, the Mokris continued to support a few hundred independent vending operations and large contract foodservice providers across the country that had licensed the smart fridges from Pantry. However, they did not add any new customers. That's about to change. With a new round of funding, opening up licensing opportunities for other operators is now a big part of Byte's business plan.

"Pantry launched using the licensing model. We put it on hold when we bought the company to focus on perfecting the technology and expanding in the Bay Area to prove the model," Lee Mokri explained. "My wife and I had no experience and quickly grew, so we see an opportunity not only for established vending operators, but also for newcomers to the concept of selling food through automated retailing."

Operators can purchase the equipment or lease it with no upfront cost and pay a monthly licensing fee to gain full access to sales and operational data through Pantry's backend software. Lee Mokri explained that the machines can be connected to Wi-Fi or cellular services, which allows sales and product data to be pushed to the cloud in real time.

"Operators can use our backend system or import the data into their own software," Mokri explained. "Either way, they know exactly, in real time, what is in the fridge. Pantry's software helps predict what items will sell in the next 24 to 48 hours, so they can pack a bin with the items best suited to the specific tastes of each location."

Pantry's dashboard removes all guesswork by graphing sales by day, product, time and location, so operators know what's selling best, when to deliver it and what's expiring. They can remotely discount pricing -- on the Friday afternoon of a long weekend for instance -- if products are nearing the end of their freshness date. Operators can also use the cloud-based system to create and email coupons to customers. Many locations choose to subsidize products for their employees, and adjusting the machine pricing accordingly is as simple as the click of a mouse, Mokri pointed out.

Byte Foods dashboard, Pantry, vending
IN THE KNOW: Pantry's dashboard eliminates all stocking guesswork by tracking and graphing daily sales and product inventory so operators know what's selling, what's soon expiring and what should be on the truck for the next service.

The Byte owner says that the Pantry concept is similar to the micromarket model, minus the cost and logistics of building out a self-checkout store, and the risk of theft and need for security cameras. Nutritional, allergen information and ingredients can be shown on a machine's display or on the package, allowing consumers to view product information before making purchases.

Another advantage to Byte's machines is that any product or product mix can be merchandised on any shelf in no particular order. "Customers hunt for what they want, much like in the 'cheese island' in a grocery store," he pointed out. "One shelf can have salads, chicken salad, tuna salad and drinks. Our system allows for total flexibility and more variety than with a vending machine."

The University of California's San Francisco Medical Center is one Byte customer that has found the automated fridges to be a good fit in the healthcare environment. "Pantry has been a crucial addition to our food program," said UCSF director of nutrition and food services Dan Henroid. "We can essentially stay open 24/7. The service is a huge benefit that allows us to offer fresh and healthy food options to our staff and visitors at any time of day."