Even before Illinois and other states instituted stay-at-home orders in March, Chicago startup Farmer's Fridge knew it had a problem.
The company, which makes healthy vending machines that are placed in office buildings, airports and other high-traffic areas, was closely monitoring the COVID-19 crisis across the world and began telling many of its employees to begin working from home in order to properly social distance. But Farmer's Fridge CEO Luke Saunders understood that if his own employees weren't coming into the office, many other companies were likely to do the same---and that could mean a bit hit to its business.
"We make the majority of our money from selling food to people who are at work," Saunders said.
As stay-at-home orders officially started, revenue indeed began to fall. Saunders said sales quickly fell 70% as its once heavily trafficked fridges were now seeing far fewer customers.
"We lost the vast majority of our revenue over a couple week period," he said.
Needing to move fast to make up for lost revenue, Farmer's Fridge decided to double down on one area where employees were very much still at work: hospitals.
Prior to the virus outbreak, about 25% of Farmer's Fridge's business came from hospitals. Now it's a main driver of revenue for the startup as it's increased both its number of fridges in existing health care facilities as well as new locations.
On March 1, Farmer's Fridge had fridges in 85 health care locations, and today it's in more than 140 facilities in cities like Chicago, New York, New Jersey and Indianapolis. The startup recently installed fridges in makeshift field hospitals like the Javits Center in New York City and Chicago's McCormick Place.
The company says it's serving more than 30,000 meals per week to health care workers.
Serving Chicago's front line health care workers not only helps business, but also fits Farmer's Fridge's larger mission of bringing affordable, healthy food options to people who need it. Saunders said several of its hospital clients have seen their traditional cafeterias shut down or reduce operations, making Farmer's Fridge a vital option for doctors, nurses and other health care staff to find quality meals. The startup has also installed mini-fridges in hospital break rooms and family bereavement lounges, where food is free.
Aside from hospitals, Farmer's Fridge is also operating in airports, where it's one of---if not the only---food options.
"We get notes from flight attendants and pilots that this is the only thing open in the airport for them," Saunders said.
Farmer's Fridge, which has raised more than $40 million in venture funding since it was founded in 2013, also launched a completely new revenue stream as the coronavirus keeps offices closed: delivery. The company has been delivering its healthy salads, sandwiches, bowls and snacks to customers' homes in Chicago, New York, Milwaukee and elsewhere. The company says its delivery sales have increased 3x since its first full week.
"Our customers didn’t disappear, they just went home," Saunders said. "[We thought] is there a way we can figure out how to connect with them in their homes and provide Farmer's Fridge in an economically viable way?"
Saunders said he expects Farmer's Fridge to continue home delivery even after stay-at-home orders are lifted and people return to the office.
The delivery service and increased focus on hospitals have helped Farmer's Fridge recoup some lost revenue, but it's still not where it was pre-COVID, though Saunders said the startup is "on track" for sales to return to normal over the next few months.
"We’re certainly not whole. It's been really hard on the team," he said. "But we have been able to manage to be stable. We've put ourselves on a path that allows us to manage this regardless of how long it lasts."
