Luke Saunders

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(Luke Saunders, Founder & CEO at Farmer’s Fridge)

We are excited about today’s Edition of The Takeoff. Today’s interview is with Luke Saunders, Founder & CEO of Farmer’s Fridge.

Having received over $40M in funding from firms including Innovation Endeavors (co-founded by former Google CEO Eric Schmidt) and PowerPlant Ventures, Farmer’s Fridge provides fresh, healthy foods in user-friendly, accessible vending machines at an affordable rate.

Prior to starting Farmer’s Fridge, Luke received his Bachelor’s degree from Washington University in St. Louis, where he owned and operated Bear Bikes. Thereafter, he became a regional sales manager for General Magnaplate Corporation, assisting companies across the Midwest.

The interview took place via a call between Luke and Lukas Steinbock (Co-Founder at The Takeoff) in early May.

You can find Farmer’s Fridge on Twitter @FarmersFridge.

We hope you enjoy today’s Edition.

Quick Summary of the Interview:

  • Luke starts off by discussing his background and how some of his previous experiences positioned him to start Farmer’s Fridge
  • He then goes into detail on what Farmer’s Fridge is and how getting healthy foods to customers is largely a supply chain challenge, due to fresh produce’s short shelf life
  • Luke then discusses how Farmer’s Fridge has reacted to COVID-19 before offering advice for students related to finding a job in today’s market, positioning themselves well for success, and more

(Estimated read time = 15 mins)

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Lukas: So Luke, what were the experiences that led you to found Farmer's Fridge, and how did they help you in being a founder?
Luke: It's probably a number of things. It really started as a kid. I was always pretty entrepreneurial, trying to start different businesses or scale up a lemonade stand. When I got to college, I ended up buying one of the on-campus businesses called Bears Bikes and running it with my roommate for a couple of years.That really reinforced my desire to be an entrepreneur. And so I was graduating in 2009, which was right in the middle of the Recession, and I ended up going to work with my dad in a small grease / lubricant manufacturing business. After that, I needed a stable income, so I took a job as a salesperson in the Midwest while my wife was in law school, and that was the final piece of it.It gave me the insight to start Farmer's Fridge, and it also helped me learn sales, which was probably one of the more important things for building the company and being entrepreneurial in the way I am now.
Lukas: Yes, practice makes perfect. Moving on to Farmer’s Fridge, what is Farmer's Fridge and what is your mission as the company’s CEO?
Luke: Farmer's Fridge’s mission, in a nutshell, is to make fresh and healthy food more accessible, convenient, and affordable. My job is to ensure we stick to that vision and accomplish that goal in an economically viable way by managing our resources, such as cash, human and physical capital, as efficiently as possible.
Lukas: In terms of the problem you're solving, what got you inspired? Have you always been interested in healthly foods, or was this a problem you saw in the market that needed solving?
Luke: I think so. Growing up, my mom cooked and was very health-conscious, so I kind of took it for granted that I ate really amazing, healthy foods. When I got to college, I realized for the first time that it's hard to find healthy meals and they're more expensive. I actually spent a lot of time and energy trying to find healthy food and frankly, I didn't think of them as necessarily healthy as much as food that I had grown used to eating and made me feel good.I couldn't find them, like fresh fruits and vegetables, and that was exacerbated when I worked sales. As I mentioned, I was driving 1,000 miles a week through Michigan, Ohio, Indiana, and Kentucky. Often, I would be in a town where the only restaurant was McDonald's, so I’d have to go to the grocery store, buy food, cook food, and I couldn’t really do that in a hotel room. Therefore, my personal interests aligned with what I felt like could be a big gap in the market.
Lukas: Yeah, I think this problem is especially prevalent in America. I spent my semester abroad, before COVID-19 broke out, in Sydney, Australia, where there is an incredible healthy food scene.I’m wondering, have you taken inspiration from other countries at all, and on the other side of that, how has being in the Midwest influenced you?
Luke: I actually lived in England for about a year and I lived in China for about a year, over two different trips. In both cases, it had a big impact on how I think about food and its possibilities. In England, I was blown away by the grab-and-go food scene, which was really well-developed, with amazing quality and reasonable prices. It was eye-opening to see high-quality grab-and-go food prepared in advance.In China, the supply chain is very different and it was interesting to me that fruits and vegetables were actually the cheapest things you could buy. And, they were everywhere. There was no issue of access or convenience or price. Therefore, I spent a lot of time thinking about why that was the case and what made our system different in the U.S.I knew it was possible to make amazing grab-and-go food and that supply chains could significantly impact the price of different foods, so I thought of it as a supply chain problem. If I can make the food, I just need to create a new way to get it to people.
Lukas: That's fascinating. What were some of the supply chain problems that you solved in the process, and would you consider that your biggest challenge in starting Farmer's Fridge?
Luke: Yeah, it really was at the heart of it. The supply chain challenge is that fresh produce has a relatively short shelf life. If you think of a granola bar, it’s baked and often has preservatives to last for a year or more. You can aggregate the production in one place, plan your supply of incoming ingredients well, and then put it through the existing supply chain, which is generally not refrigerated and takes weeks to months.When you're talking about produce, all of that gets much harder. If you want to aggregate demand into one central production facility, your timing has to be better because your incoming raw materials go bad much faster. Most importantly, you need to be able to get it to customers in hours instead of weeks and months.The core idea was the current supply chain can't support this, so I need to rebuild it from the ground up. The challenge was getting good data to manage the inventory, given that everything is so highly perishable.
Lukas: Really wonderful insight there. Moving on to the current time, due to COVID-19, you’ve shifted focus to healthcare locations, going from 84 vending machines up to 140. You've retained your workforce and have given more than 30,000 meals to hospital workers every week since the crisis began.I first wanted to applaud you for this effort, and I'd love to hear more about your thought process in making this decision and the other gametime decisions that had to be made.
Luke: I think it started with the fact that we sell most of our food to people at work. The basis of the business was being available for that impulse purchase at work. As soon as COVID-19 was starting to spread in the U.S., it became clear that we needed to prioritize social distancing to keep everybody safer and flatten the curve.Before Chicago actually issued a stay-at-home order, our corporate team decided everyone would work from home. That decision was not in our interest in terms of selling food, but it was in the interest of keeping our employees safe and doing our part to help slow the spread. It was like, we have to do this, it's the right thing to do.I didn’t know if it would be a couple weeks or months, but we were going to lose most of our revenue because we fed people at work. We had to figure out, what does our business look like? Where are our customers? We always had about 25% of our portfolio in the hospital channel, where there was more demand for our work because cafeterias were closing and people were working longer hours than ever. Hospitals called us saying they needed us right now and wanted to make sure we were operating. We have the infrastructure and we looked at our assets.Farmer's Fridge isn't just the fridges, it's the production and distribution of food and the technology that makes it scalable, and, ultimately, it's the relationship with customers and our brand. We thought most of our customers will be just as interested in eating healthy at home, so we wanted to figure out a way to get them food at their house.A week after we posed that question, our team said they thought it was possible, and we started setting up on a Shopify site and testing it. All of a sudden, it really took off. So, it was going through the decisions we've made, the impact on our business, and how we can adapt. This is the best chance we have to leverage our assets.As far as the team, that's our best asset. The hardest thing to build was getting the right people together to solve this hard problem, things like training the hourly team to make the food and understand our products. To me, the value of the business is in the team that executes it every day.Lukas: Yeah, there are definitely many tidbits of advice in there. More generally speaking, do you have any other advice for founders during this time?
Luke: I think it's the importance of first principles thinking. We went back to, why does Farmer's Fridge exist? Does that reason still have a purpose in this environment? Do people still want to eat healthy, and are they still time-strapped? If so, can we meet that need in an economically viable way?
Lukas: That makes sense. Something that I've heard, or assumed, is an important first step for founders in these times is to look at the available runway you have. Do you think that pressured you or made you more flexible in making decisions, and how important is calculating that aspect to the whole process?
Luke: It was hugely important. Limited runway drives the right sense of urgency in making decisions and getting stuff done. It’s one of the freeing parts of a startup. You're constantly looking at a business being gone, so you run it with a different mentality than if you think you have time.If someone told you that you have six months to live, you'd make different decisions than if you thought you’d live until at least the average age, right? It's no different in business. You’re thinking, I'm going to be out of business if I don't do these things. It frames it very differently and is our constant state of mind, so it wasn't any different than normal but helped a lot.
Lukas: Yeah, entering that fight or flight mode definitely gets different results. Now, moving on to advice-related questions for our main audience, which is mostly undergrad and some graduate students. Do you have any advice for students entering today's job market? Are there any qualities and traits that you find particularly valuable in students?Luke: When I was graduating in the Recession, the realization was only half of kids, or less, were going to get the jobs everyone wanted, and I was not in that top half. I ended up taking the job at the grease factory, where I wasn't getting paid but I was going to learn a lot. So, I think my main advice is to do something where you can really learn and get skills that you can't get in school.It might not be paying what you thought you were going to make, or with the status that you'd like to have, but it's giving you skills that are highly transferable. I was telling people I'm going to go work in a grease factory, and they were looking at me like, what are you thinking? What's that going to do? Find a real job.However, it turned out to be an amazing opportunity to learn the nuts and bolts and every aspect of running a manufacturing business. Similarly, with the sales job, I wasn't very marketable at the time and we were coming out of the recession, so I was thinking, what skills do I want to get? I want to be able to sell.If you can't get the job that you want, broaden your scope and think more about skill set than pedigree. For example, hospitality is a great way to learn how to deal with difficult situations and sell. What I look for, more than anything, is people who have demonstrated over and over again that they can solve really hard problems and that that is what is motivating to them.Also, people who can deal with ambiguity and have been through situations that are challenging and changing and are able to manage and find a good path regardless of what happens. I often like asking, what's the most stressful thing you've dealt with? How did you respond? I want to find people that can be flexible and adaptable.Additionally, I think it's important to be a great communicator. Companies are getting more complex with more disciplines. Being able to explain what you need and get influence or support for it is really important.
Lukas: You spoke a little bit about the pedigree of the job versus the skills that it teaches you. When you're looking at new hires, how do you compare the two and look at pedigree?
Luke: Pedigree definitely helps as a screener, right? If you see a really well known consulting firm on a resume, you know the person has been selected through a very competitive process and you have some sense of the training they've received and the skills they have.There's no question that having a job that qualifies you in the market, versus a job where I don't know anything about the company, is helpful. The latter might have been just as hard to get or just as challenging or have even better training, but if I don't know it or the recruiter doesn't recognize it, it certainly puts you at a disadvantage from the first screening step.However, for the first few years, that matters, but ultimately, what matters is your performance and the results you can put on your resume. Showing that you know how to drive results, regardless of what the pedigree is, jumps out as well. For example, you ran a club and improved the operations, or you worked at a small company and drove a project with a big impact.All of those things are just as important, if not more so, when I'm screening. Having results that you can actually put on your resume matters a lot more than a pedigree. Also, I don't mean just GPA. It's more of, here's something that I owned, I managed, I completed, or I drove.
Lukas: Makes sense. Lastly, are there any strategies that you have for students looking to network and get their name out there?
Luke: I think it really depends on what kind of job you're looking for and where you rank in the grades equation coming out of school. What I’ve found helpful is getting to know the people at the companies that you're interested in. Even if you’re not looking for a position that year, go to those events a year or two ahead of time to meet the recruiters and ask them what they're looking for and get to know them.There's a built-in advantage to actually having you matched with the application and showing that you were thinking ahead and trying to get to know them. It makes a huge difference. If you're going the professional route, I'd say just get there early and often to get to know what they're looking for, and optimize your experience against that. It's similar for startups or smaller companies, where they're often not hiring on an annual cycle. They're hiring when they need to get a problem solved. Then, it’s getting into those communities as much as possible.Go to startup meetup events. Go to pitch days and demo days. Immerse yourself in that community and introduce yourself to entrepreneurs, because more often than not, they're trying to hire people after they already have a problem that looks pretty big.For us, especially in our early days, most of our hires came through our network. I would meet somebody who would tell me about what they did or their skills. Six months later, I've got this big problem, so I’d call them up and say, hey do you think you can help with this?
  • * Please note that our interviews may be edited for length, content, and clarity **

Moderator: Lukas Steinbock (Co-Founder at The Takeoff. Junior at Washington University in St. Louis. Growth Marketing Intern at BlueSprig.)

I’m on Twitter @lukassteinbock 👋


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