With office culture still in limbo, subscription-based lunch services are rethinking their target clients.
Subscription platforms like MealPal, Fooda and Ritual — whose typical users work in industries like tech, finance and consulting services — have seen a recent drop in demand. Meanwhile, unexpected emerging markets like healthcare, manufacturing and fulfillment facilities have become fertile customer acquisition ground — especially as blue collar workers gain incentives to return to work. Even concepts like Farmer’s Fridge, which makes a vending machine that sells freshly-made salads and prepared food, are seeing demand among more manual labor-based businesses.
For Chicago-based Fooda, a meal ordering platform that connects local eateries with busy employees, the opportunity is twofold: “You have restaurants trying to stay afloat and healthcare workers working around the clock,” said Stafford McKay, Fooda’s senior director of marketing.
The company offers both corporate and consumer products, and is currently focusing on operating pop-up restaurant sites for existing and prospective clients who are operating “essential business.” Fooda is also seeing more workplaces take advantage of its group delivery option, which helps streamline and pool individual employees’ orders for messengers to collect and deliver.
Employer-subsidized food programs, which have historically been propositioned by the big tech companies and startups as part of the benefit package, have often been used as a way to recruit and retain employees. It’s now spilling over into other industries with hungry workers.
“Hospitals have been a big focus for us,” McKay said, pointing to an ongoing need for comprehensive catering services for understaffed medical centers. Furthermore, Fooda’s core business — outside of servicing urban and suburban office complexes — has relied on B-to-B clients like the CDC and military bases.
Non-office settings now account for the biggest new Fooda business, especially among shipping logistics, construction and manufacturing industries, which have seen “double digit” increase in signups. McKay named a “big online retailer” as one new client, a move to help keep facility workers happy and sticking around, given the supply chain relies on staff consistency to run smoothly.
Farmer’s Fridge, which debuted its refillable vending machines in 2013, has also found opportunity in installing them at unexpected venues. The company’s fridges are located across six states and has over 400 fridges, many of which were inside hospitals, airports and universities.
Following an 80% drop in business in March, it expanded to include medical centers and under-served retail spaces. According to founder and CEO Luke Saunders, 140 of the new locations are within hospitals and other “essential labor” locations, especially those with non-operational cafeterias at the moment. Some mini machines are also being installed in different departments to avoid large employees congregating in break rooms. It’s also added a hotel operator partner, who’s incentivizing employees by installing Farmer’s Fridge machines throughout their premises.
This diversity in new clients has helped the service “get back to pre-Covid revenue figures,” Saunders said. And like many ready-to-eat meal delivery kits, Farmer’s Fridge quickly began offering DTC and subsidized home-delivery for remote working customers.
Looking forward, many office-based partners still feel the need to stagger employees back in, creating the need to better manage catering inventory based on daily demand. For example, a hybrid commuter-remote culture makes for a tricky catering estimation, “so they’re looking for a flexible, data-based ordering option,” said Saunders.
Still, some services believe the work-adjacent lunch business will see enough recovery to keep the same business model trekking along. The rewards-based order ahead app Ritual, for example, is easing back into cubicles by letting restaurant partners customize and promote QR code-based menus on the platform. This aims to streamline the dine-in and pickup orders from both dine-in and pickup.
Meanwhile, MealPal, which offers users restaurant credits toward meals through tiered subscription plans, expects sales will return to the normal range within the next six months, said co-founder and CEO Mary Biggins.
“We saw huge growth in daily MealPal reservations from June to July, which we correlate to people starting to return to the office,” Biggins told Modern Retail. And despite the general surge in home delivery, MealPal isn’t considering offering the option for quarantined workers.
Still, the office lunch run could make a comeback in the near future. Biggins said that many of MealPal’s subscribers still have their accounts “on hold,” which are set to reactivate this fall “or early 2021.”