This sponsored post is produced in association with Panasonic Lab 1.0. 

You know the feeling: that mid-afternoon slump when M&Ms, or salted chips and a soda, will revive flagging energy so you can finish that report or get through the next meeting. Even though the pick-me-up will soon send your blood sugar crashing, it’s what’s on offer at the vending machine downstairs.

Alex Yancher to the rescue. Recognizing a groaning (as in empty stomach) need to make healthy food accessible when people want it, the culinary superhero has transformed traditional vending machines into healthy food on the go. Both a hardware and software solution, Pantry enables the unattended retail of fresh food via digitally operated kiosks, the next generation of vending machines.

Putting their money where the mouths are

Last month, the three-year old startup obtained another $1 million in seed financing, bringing its total funding since inception to 2.3 million.

There’s good reason — vending is ubiquitous. With five million U.S. vending machines in operation, it’s rare to enter a hotel, hospital, or office building that doesn’t boast at least one. Since Pantry’s goal is to democratize access to fresh, healthy food, vending seemed a natural approach.

“The vending ecosystem does not work for fresh food,” explains Pantry co-founder Yancher. “Vending operators aren’t food producers, which means they have to order food from a third-party distributor. By the time your sandwich leaves the production facility, gets on a truck, gets placed into a warehouse, and gets to the machine, it’s been somewhere on the road for at least five days — which means it’s loaded with preservatives. And that’s the kind of food people are shying away from now. So we knew we had to rethink the entire industry.”

Join Pantry’s Alex Yancher along with food author Eve Turow and Feastly’s Noah Karesh for Grocery-a-Go-Go – a spirited live discussion about the ways grocery innovation is changing our relationship with food. Part of Panasonic’s Lab 1.0, the event takes place Thursday, November 12th from 6 to 8 p.m. in San Francisco. Register now to secure your spot.

Because typical vending operators are unfamiliar with fresh food delivery systems, Pantry opted to work exclusively with food service companies or branded local producers like Mixt Greens, or the food service companies that operate cafés at workplaces such as Stanford Hospital or Cisco Systems.

“We work directly with onsite cafés at a hospital or university or corporate campus, enabling them to keep selling their fresh food 24/7, spread across the campus. One example is Cisco Systems. Their café closes at 1:30. So if you’re hungry at 2 pm, before Pantry, you would be relegated to chips, candy, and soda from the vending machines.

“With Pantry, you still have access to the entire grab ‘n’ go set of options that you normally would if the café was open — and you have this access around the clock. You can get a fresh sandwich at 3 a.m. Moreover, there are so many of our kiosks on their spread-out campus that you don’t even have to walk all the way to the cafeteria to get that juice or sandwich; it’s right there in the building where you’re already working. Our mission is to shorten the distance between the food, consumer, and kitchen.”

Soda Fail: Junk food is so last millennium

What does Pantry innovation say about shifting food attitudes and expectations, from both the consumer and company standpoint?

“We’re becoming more discerning eaters,” says Yancher. “Consumers are really focused on fresh and healthy — and they’re willing to pay for it. People also want local cuisine. They want to know that the food they’re eating is sourced ethically and responsibly. And the food service industry and restaurant industry is catering to that.

“Companies are also starting to realize that providing fresh food and snacks is a necessary perk. Just the way free coffee is a no-brainer for offices to provide for employees, subsidized or even free food is becoming the norm as well.”

He illustrates: “Stanford Hospital used to have a vending machine in the hallway that sold preservative-laden triangle sandwiches as well as hot pockets. They opted to replace that machine with a Pantry. Sales from the original vending machine were approximately $500/month, which is actually pretty good for a vending machine. When we installed a Pantry kiosk, the very first month sales hit $3,500 — a seven-fold increase.” That was their first appointment at Stanford; since then they’ve added several more units. The numbers tell the story: people are hungry for what Pantry provides.

SKU’d toward possibility

While Pantry doesn’t yet work with any grocery suppliers, there are plans to bring grocery staples directly to residential buildings. “We want to make the top-selling SKUs readily available to people at all times via our unattended kiosk in, say, the lobby of a condo complex or large apartment building,” explains Yancher.

Could tired residents coming home from work utilize a kiosk for dinner? Potentially. “We have an idea to retail meal kits with pre-cut veggies and pieces of meat for cooking, similar to the Blue Apron concept. Another approach is stocking the top-selling SKUs, which account for the majority of sales. Instead of having to get in your car and drive to Whole Foods to buy these staples, they’ll be available downstairs in the Pantry.”

Clearly, technology and the start-up community are radically reimagining the way food is acquired and consumed — and will continue to do so.

“I read about a guy who spent six months and $1,500 to make a sandwich from scratch. This was extreme, but I do think of the food space in terms of a value creation spectrum. Let’s say at the far left is what this guy did: grow your own vegetables and raise your own chicken or turkey. At the far right is a fully-prepared meal like you’d eat at a restaurant. Then there’s everything in the middle. You have Blue Apron, which will send you all the ingredients to prepare specific meals. You have Munchery, which will deliver ready-made refrigerated meals that you can heat up. I think in the next two to five years the sweet spots along this value chain will start to get flushed out: what’s more compelling, a ready-to-eat hot meal, or a set of ingredients for you to make at home? The jury’s still out, but some of these will prove to be niche, while others will go mainstream.”

Yancher also sees a growing popularity in kitchen technologies that will help to promote the blossoming in-home prep ecosystem, like Sous-vide devices such as Mellow or Nomiku. “Everybody can become a sous-chef at home with these cool devices.”

It’s part of unstoppable change in the delivery, preparation, and consumption of food that technology is now fueling.

Join the conversation tomorrow evening at Grocery A-Go-Go. Register now.

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