Latest / Choppin’ It Up by Bloomberg Intelligence / Fooda’s CEO on Its Asset-Light Foodservice Model

Transcript

Fooda’s CEO on Its Asset-Light Foodservice Model · Choppin’ It Up by Bloomberg Intelligence

• 0:13
  Speaker 1: Welcome to Chopping It Up. I'm your host, Mike Hallon,
• 0:16
  Speaker 1: the senior restaurant and food service analyst at Bloomberg Intelligence.
• 0:19
  Speaker 1: Our research and that of bi's five hundred analysts around
• 0:22
  Speaker 1: the globe can be found exclusively on the Bloomberg terminal.
• 0:26
  Speaker 1: If you enjoy the pod, do me a favor and
• 0:28
  Speaker 1: hook us up with a five star review on Apple
• 0:31
  Speaker 1: or Spotify. Today we're joined by Arazzio Buza, founder and
• 0:35
  Speaker 1: CEO of Fuda. Fuda has built one of the more
• 0:38
  Speaker 1: unique businesses in food service, connecting thousands of restaurants with
• 0:42
  Speaker 1: workplaces across the US.
• 0:45
  Speaker 2: Welcome to the pod. Erasio, Thanks Michael, thanks for having
• 0:48
  Speaker 2: me on.
• 0:48
  Speaker 1: You got it man. So what was the problem that
• 0:51
  Speaker 1: you saw on the market that convinced you to start
• 0:54
  Speaker 1: the business.
• 0:56
  Speaker 2: Yeah, so it's been over fifteen years now. I was
• 0:59
  Speaker 2: at a company. We're based here in Chicago, and it
• 1:03
  Speaker 2: was a logistics company and we were growing really fast.
• 1:06
  Speaker 2: But we were in an area that didn't have a
• 1:08
  Speaker 2: lot of food options, and so our employees had this
• 1:11
  Speaker 2: great idea to start inviting local restaurants into our office
• 1:15
  Speaker 2: space to sell food to our employees. You know, the
• 1:18
  Speaker 2: company wasn't paying for anything at the time, providing access,
• 1:21
  Speaker 2: and so it started out as a one day a
• 1:23
  Speaker 2: week program, and over the next several years, the company
• 1:27
  Speaker 2: grew and our food program grew. When I think when
• 1:29
  Speaker 2: we started the program, we had a couple hundred employees,
• 1:33
  Speaker 2: and fast forward two three years we had about a
• 1:35
  Speaker 2: thousand employees. We were getting ready to ipo and you know,
• 1:40
  Speaker 2: ended up ipoing, and by that point the program was
• 1:44
  Speaker 2: five days a week. It was one of our most
• 1:45
  Speaker 2: used perks, and so I was just a periodic customer
• 1:49
  Speaker 2: of the program.
• 1:50
  Speaker 1: I had nothing to do with it.
• 1:50
  Speaker 2: I was actually the president of the company and so
• 1:54
  Speaker 2: you know, kind of was doing my thing. And then
• 1:56
  Speaker 2: about a year after we ipoed, I was I was
• 2:00
  Speaker 2: in a meeting with one of our HR leaders and
• 2:03
  Speaker 2: he said, you know, I want to talk about our
• 2:05
  Speaker 2: food program because the lines are getting too long. It
• 2:08
  Speaker 2: turns out that employees from other companies in our building
• 2:12
  Speaker 2: were utilizing the food program.
• 2:14
  Speaker 1: And at the time, I.
• 2:16
  Speaker 2: Was already in the process of transitioning out of the business.
• 2:19
  Speaker 2: I was about thirty eight years old, and I just thought,
• 2:21
  Speaker 2: you know, if I'm ever going to do another startup again,
• 2:24
  Speaker 2: I need to start thinking about that, and so I
• 2:26
  Speaker 2: didn't know what I was going to do next, but
• 2:28
  Speaker 2: I was starting that transition. And then about two weeks later,
• 2:32
  Speaker 2: I was literally laying in bed and I thought, you know,
• 2:34
  Speaker 2: maybe I could do this food concept thing. You know,
• 2:38
  Speaker 2: my background is primarily marketplace type businesses B to B,
• 2:42
  Speaker 2: and I thought, hey, I could do this. You know,
• 2:44
  Speaker 2: on one side, we can have restaurants. On the other side,
• 2:47
  Speaker 2: we can have large employers and we can add a
• 2:50
  Speaker 2: lot of value to how they think about their their
• 2:53
  Speaker 2: on site food programs. And so I did all real
• 2:55
  Speaker 2: research and you know, decided to start the company.
• 2:58
  Speaker 1: Very cool. So, yeah, an asset light food service business,
• 3:02
  Speaker 1: which is really interesting, very unique for the listeners who
• 3:05
  Speaker 1: aren't familiar. Can you kind of explain the business model
• 3:08
  Speaker 1: a little bit more and talk about how food sits
• 3:12
  Speaker 1: between employees and employers and the restaurants. Yeah.
• 3:17
  Speaker 2: Absolutely, Yeah, So we have a three sided marketplace. Our
• 3:20
  Speaker 2: clients are primarily large employers of all kinds think you know,
• 3:25
  Speaker 2: corporate offices, but also hospitals, industrial facilities, government and military,
• 3:31
  Speaker 2: et cetera. And so those are our clients. And then
• 3:36
  Speaker 2: on the other side we have restaurants. So we partner
• 3:38
  Speaker 2: with about four thousand restaurants across the country, and then
• 3:42
  Speaker 2: based on the type of workplace location, we only deal
• 3:46
  Speaker 2: with workplaces, so you know, all all kinds of employers,
• 3:49
  Speaker 2: and so depending on the size of the workplace, whether
• 3:53
  Speaker 2: the company is looking to pay for any or none
• 3:56
  Speaker 2: of the meal you know, days of week, audience, et cetera,
• 4:00
  Speaker 2: we have a suite of go to market products based
• 4:05
  Speaker 2: on their needs. So we do everything from what we
• 4:07
  Speaker 2: call pop up on one end, where a restaurant physically
• 4:11
  Speaker 2: goes on site and sells food to the employees or
• 4:15
  Speaker 2: does on site fulfillment. We also have group delivery for
• 4:19
  Speaker 2: organizations where it makes more sense where everyone orders by
• 4:22
  Speaker 2: a certain time and then we aggregate and deliver the orders.
• 4:25
  Speaker 2: Obviously we do catering. We also do things like pantry
• 4:29
  Speaker 2: services where we do office coffee. And then the other
• 4:33
  Speaker 2: thing that we do from the full service side is
• 4:36
  Speaker 2: for locations that actually have on site cafeterias, we take
• 4:40
  Speaker 2: over the cafeteria and we replace them with local restaurants
• 4:43
  Speaker 2: the stations and so you get that that experience where
• 4:49
  Speaker 2: it's you know, it's open from you know, called seven
• 4:51
  Speaker 2: or eight am to three pm and you get a
• 4:53
  Speaker 2: whole host of restaurants that are there as opposed to
• 4:56
  Speaker 2: institutional food service that we've we've probably seen our lives.
• 5:01
  Speaker 1: And you kind of touched on the customer mix. So
• 5:04
  Speaker 1: I guess what's your customer mix now in terms of
• 5:07
  Speaker 1: corporations versus government accounts, education, whatever it might be. And
• 5:11
  Speaker 1: how's that evolved over time? Yeah? Absolutely, So.
• 5:15
  Speaker 2: When we started, the business was almost all you know,
• 5:18
  Speaker 2: corporate offices, you know, businesses, and it was heavily weighted
• 5:22
  Speaker 2: towards employees paying for their own food. You know, starting
• 5:25
  Speaker 2: in Chicago right around twenty eleven, most companies didn't pay
• 5:29
  Speaker 2: for food. In fact, in most cities at that point,
• 5:32
  Speaker 2: when employers weren't paying for food, you know, fast forward,
• 5:36
  Speaker 2: you know, the company continued to grow and we started,
• 5:38
  Speaker 2: you know, adding different types of employer types. But even
• 5:42
  Speaker 2: as recently as twenty nineteen, right before the pandemic, we
• 5:46
  Speaker 2: were probably about ninety six percent corporate offices. And then
• 5:51
  Speaker 2: once the pandemic hit, we were we were you know
• 5:54
  Speaker 2: struggling to you know, figure out how the business was
• 5:57
  Speaker 2: going to survive during during that event that ended up
• 6:01
  Speaker 2: lasting about three four years. We started focusing more on
• 6:05
  Speaker 2: what we now call essential services, and so we started
• 6:08
  Speaker 2: getting into more healthcare type locations, industrial, military, government, and
• 6:16
  Speaker 2: so now less than you know, call it seventy five
• 6:19
  Speaker 2: percent of our business is is corporate offices and about
• 6:22
  Speaker 2: an over twenty five percent is non corporate offices. So
• 6:27
  Speaker 2: pretty wide range of types of locations. And the other
• 6:30
  Speaker 2: change or evolution that we've seen is that employers are
• 6:35
  Speaker 2: paying for more and more food than they did before.
• 6:38
  Speaker 2: So now about fifty to fifty our business is employer
• 6:41
  Speaker 2: paid dollars versus employee paid dollars.
• 6:45
  Speaker 1: Interesting, and the traditional food service market, you know, the
• 6:49
  Speaker 1: government and military, those accounts are set up differently than
• 6:55
  Speaker 1: than you know, you know, the accounts they have with
• 6:58
  Speaker 1: like independent restaurants and stuff like that. Is there any
• 7:01
  Speaker 1: differences in the contracts that you have with some of
• 7:04
  Speaker 1: these military and government contracts versus what you do with
• 7:07
  Speaker 1: the corporations.
• 7:09
  Speaker 2: No, it's actually very similar, so on both sides. You know,
• 7:13
  Speaker 2: we're working with restaurants and then from a client side,
• 7:17
  Speaker 2: you know, one of the things that we've learned over
• 7:18
  Speaker 2: the years is that regardless of the industry you're in,
• 7:23
  Speaker 2: you care about employee recruitment, retention, engagement, and so you know,
• 7:28
  Speaker 2: the military, you know, wants to make their their team
• 7:31
  Speaker 2: as happy as Google does, you know, but everyone has
• 7:34
  Speaker 2: different budgets and different you know, logistical needs. And so
• 7:37
  Speaker 2: I mean, I think from an execution standpoint, when you
• 7:41
  Speaker 2: get into high secure facilities. You know, we work inside
• 7:45
  Speaker 2: the Pentagon, for example, there's a lot of you know,
• 7:48
  Speaker 2: background checks and logistics that go into that that are
• 7:51
  Speaker 2: pretty unique to that to that building. But overall, if
• 7:55
  Speaker 2: you take a step back and you squint, they're pretty similar,
• 7:59
  Speaker 2: you know.
• 7:59
  Speaker 1: And as we've touched on, one of the interesting aspects
• 8:02
  Speaker 1: of the models that you're not actually operating cafeterias, right,
• 8:05
  Speaker 1: You're you're leveraging your partners to do that. Why is
• 8:08
  Speaker 1: that structurally better than the legacy food service models, and
• 8:12
  Speaker 1: and how do your partners benefit? Yeah, so, you know,
• 8:17
  Speaker 1: so let's start on the client side first. We provide
• 8:21
  Speaker 1: a ton of variety and authentic food by working with restaurants.
• 8:25
  Speaker 1: We work with all kinds of brands, everything from you know,
• 8:29
  Speaker 1: small mom and pop you know, independent restaurants to large
• 8:33
  Speaker 1: national chains you know, think Jersey, Mike's, Chick fil A,
• 8:38
  Speaker 1: you know, large chains, so and everywhere in between. And
• 8:41
  Speaker 1: so the When you combine that experience of getting you know,
• 8:45
  Speaker 1: both of those and the variety, it's pretty powerful for
• 8:48
  Speaker 1: an employee, right they get authentic food, that mix of
• 8:52
  Speaker 1: local you know restaurants they love with you know, really
• 8:55
  Speaker 1: great national brands, and so the value proposition is pretty
• 9:00
  Speaker 1: powerful for consumers. And then when you think about the restaurant,
• 9:04
  Speaker 1: you know, why do restaurants big and small want to
• 9:07
  Speaker 1: work with FUDA. It's really simple, you know, it really
• 9:10
  Speaker 1: starts with making sure that we're a profitable business for them.
• 9:13
  Speaker 1: So we want to make sure that operating in food
• 9:17
  Speaker 1: on food Is platform is profitable for that meal period.
• 9:21
  Speaker 1: Most of what we do is lunch, and so some
• 9:24
  Speaker 1: of the unique characteristics of FUDA is one our average
• 9:28
  Speaker 1: event sizes are over five hundred dollars and so you know,
• 9:32
  Speaker 1: they're not one off, two off, you know, type of meals,
• 9:34
  Speaker 1: and so the the order value is really good.
• 9:37
  Speaker 2: The size of the menu that is available on Foodist
• 9:40
  Speaker 2: platform is usually about seventy five percent smaller than their
• 9:44
  Speaker 2: normal menu. So we want to make sure that we're
• 9:46
  Speaker 2: bringing the items that most resonate during lunch, that are
• 9:49
  Speaker 2: core to that restaurant's brand, and get lots of volume,
• 9:53
  Speaker 2: you know, for those items, and then because of the
• 9:56
  Speaker 2: way the orders are fulfilled, they get a lot of
• 9:59
  Speaker 2: visibility in advance. So usually we're giving them visibility about
• 10:02
  Speaker 2: thirty days in advance of the actual event, and they're
• 10:07
  Speaker 2: saving on packaging and transportation, et cetera. And so when
• 10:11
  Speaker 2: you put it all together, it could be very profitable
• 10:13
  Speaker 2: for them to operate on our platform. And so it's
• 10:17
  Speaker 2: great for restaurants, it's great for consumers, it's great for
• 10:20
  Speaker 2: the clients that want to be hands off and have
• 10:22
  Speaker 2: a great perk for their employees. And so that's why
• 10:25
  Speaker 2: we've done well over the years.
• 10:27
  Speaker 1: How difficult was it to build and maintain your restaurant
• 10:30
  Speaker 1: partnership network and what prevents a competitor from trying to
• 10:34
  Speaker 1: replicate it?
• 10:35
  Speaker 2: So obviously, you know, building a restaurant network, it's taken
• 10:40
  Speaker 2: you know, fifteen years, right, But when you think about it,
• 10:44
  Speaker 2: it's very much a local type product. And what I
• 10:47
  Speaker 2: mean by that is each in each city that we operate,
• 10:51
  Speaker 2: and we now operate in about two hundred and fifty
• 10:53
  Speaker 2: cities across the US. We're in thirty eight states, and
• 10:56
  Speaker 2: so there's a there's a network that gets built in
• 10:59
  Speaker 2: each the markets that we're in, there's a lot of
• 11:02
  Speaker 2: training that's involved to make sure that they know how
• 11:04
  Speaker 2: to execute all the different kinds of events that are
• 11:07
  Speaker 2: part of Food Is Platform. It's not just delivery, you know,
• 11:10
  Speaker 2: like they're used to on the consumer side. There's definitely
• 11:12
  Speaker 2: a different motion that goes into that. And then you know,
• 11:18
  Speaker 2: there's restaurants that we've been working with for ten fifteen years,
• 11:21
  Speaker 2: you know, building relationships along the way, and so they
• 11:25
  Speaker 2: see the value in what we do in that. In
• 11:28
  Speaker 2: addition to the fact that's profitable and it can be
• 11:31
  Speaker 2: executed the training we provide, they're also getting a ton
• 11:33
  Speaker 2: of marketing exposure and so they get they get in
• 11:37
  Speaker 2: front of consumers. You know, we do a lot of
• 11:40
  Speaker 2: in app advertising, we do email, we do physical advertising.
• 11:45
  Speaker 2: On site, we have digital menu boards and so their logo,
• 11:49
  Speaker 2: their food gets you know, trial there, they get a
• 11:53
  Speaker 2: lot of eyeballs as part of being part of FOODA
• 11:56
  Speaker 2: So putting all that together, it's a pretty unique experience.
• 11:59
  Speaker 1: Yeah, a marketing piece is must be really nice for
• 12:02
  Speaker 1: those restaurant partners. Have you seen any impact your business
• 12:08
  Speaker 1: with the fact that you know a lot of the
• 12:10
  Speaker 1: chains that I cover Chipotle being one of them, are
• 12:13
  Speaker 1: looking to more aggressively get into the catering business.
• 12:17
  Speaker 2: We welcome it. So so when when we hear brands
• 12:22
  Speaker 2: talking about getting into catering, what they're really saying is
• 12:26
  Speaker 2: they want to do more business outside their four walls
• 12:28
  Speaker 2: and and thinking about other channels, and we are part
• 12:32
  Speaker 2: of that, and so we we we love hearing when
• 12:35
  Speaker 2: brands want to do that. When the pandemic hit and
• 12:39
  Speaker 2: restaurants that were a one trick pony that we're only doing,
• 12:44
  Speaker 2: you know, sales inside their four walls, you know, they
• 12:46
  Speaker 2: became a lot more diversified, you know, going it. You know,
• 12:50
  Speaker 2: as the pandemic drawn, that was actually a strong tail
• 12:54
  Speaker 2: wind for us on the on the restaurants acquisition side
• 12:57
  Speaker 2: of things because they understood the value of doing that
• 13:01
  Speaker 2: and having a brand presence outside of their neighborhood. And
• 13:05
  Speaker 2: so that's helpful. We don't really see it as competition
• 13:08
  Speaker 2: because what we do is, you know, we're usually fully exclusive,
• 13:12
  Speaker 2: you know, in the locations that we're in, We're bringing
• 13:14
  Speaker 2: tons of variety to our clients, and almost everything we do,
• 13:19
  Speaker 2: like ninety nine percent of our business is recurring on
• 13:22
  Speaker 2: a recurring schedule, so we're not really doing like one
• 13:25
  Speaker 2: off events for yours, you know, sales kickoff. We'll do
• 13:29
  Speaker 2: that for clients that we already have, but we're not
• 13:31
  Speaker 2: marketing ourselves that way. And we're not doing consumer events
• 13:35
  Speaker 2: like you know, birthday parties and weddings or anything like
• 13:37
  Speaker 2: that either. And so we're pretty focused on the needs
• 13:40
  Speaker 2: of what our clients and consumers want during the workday,
• 13:44
  Speaker 2: and that's usually not what the you know, the large
• 13:48
  Speaker 2: restaurant chains are really focused on outside of maybe working
• 13:51
  Speaker 2: with companies like FUDA.
• 13:53
  Speaker 1: How often have you had to, you know, get rid
• 13:55
  Speaker 1: of some of your restaurant partners because they're they're you know,
• 13:59
  Speaker 1: weren't keeping up there end of the Borgain.
• 14:02
  Speaker 2: Yeah, you know, it happens, I'd say, you know, as
• 14:05
  Speaker 2: part it's a normal course of doing business. I think
• 14:08
  Speaker 2: we've gotten better at retaining restaurants and making sure that
• 14:12
  Speaker 2: it's a win win as we've matured as a business,
• 14:15
  Speaker 2: and I think it starts with having a clear understanding
• 14:18
  Speaker 2: of what the expectations are on the front end. The
• 14:21
  Speaker 2: number one reason, I'd say, there's two reasons why a
• 14:25
  Speaker 2: restaurant doesn't work out with foodah, you know, one of
• 14:28
  Speaker 2: them is the food isn't resonating with our clients. So
• 14:33
  Speaker 2: we provide access, but people either aren't buying or aren't
• 14:36
  Speaker 2: providing you know, great reviews. And we've gotten better over
• 14:38
  Speaker 2: the years at really honing in on what people want
• 14:42
  Speaker 2: to eat during lunch. You know, things that aren't too heavy,
• 14:46
  Speaker 2: you know, a lot of handhelds depending on the location,
• 14:49
  Speaker 2: a lot of bowl you know type food and so
• 14:52
  Speaker 2: so the type of food we've gotten better at. And
• 14:55
  Speaker 2: I think the market has gotten better at focusing on
• 14:59
  Speaker 2: that as well. And so so that's one I think
• 15:01
  Speaker 2: the the X factor is when a restaurant isn't used
• 15:06
  Speaker 2: to working within a corporate setting and what might be
• 15:10
  Speaker 2: you know, required in that setting in terms of what
• 15:13
  Speaker 2: people are wearing, how they communicate with guests, you know
• 15:17
  Speaker 2: those you know being on time, being early, you know
• 15:21
  Speaker 2: the you know, the execution side, and so we spend
• 15:23
  Speaker 2: a lot of time on training to help them you know,
• 15:27
  Speaker 2: hit the ground running. And and and like we said earlier,
• 15:30
  Speaker 2: as they've been doing more work outside of their four walls,
• 15:34
  Speaker 2: they're learning.
• 15:35
  Speaker 1: This as well.
• 15:36
  Speaker 2: And so so we've gotten better and they've gotten better
• 15:39
  Speaker 2: over the years.
• 15:41
  Speaker 1: Cool and you've built a lot of your own technology solutions,
• 15:44
  Speaker 1: including the POS system, mobile ordering, scheduling tools, forecasting. Why
• 15:49
  Speaker 1: was it so important for you to own the entire
• 15:51
  Speaker 1: tech stock versus using third party solutions. Yeah, that's a
• 15:55
  Speaker 1: great question.
• 15:56
  Speaker 2: We when we started, we we always had our own
• 16:01
  Speaker 2: mobile app that provided visibility to restare to clients in
• 16:05
  Speaker 2: regards to you know, what restaurants were coming, the ability
• 16:08
  Speaker 2: to order, et cetera. But some of that initial infrastructure
• 16:13
  Speaker 2: was built on third party poss And what we have
• 16:17
  Speaker 2: found was, at one point we wanted to start doing
• 16:20
  Speaker 2: things like having a loyalty program, being able to do
• 16:24
  Speaker 2: personalization at the consumer level, and the poss that were
• 16:28
  Speaker 2: out there were all designed for restaurants, not for a
• 16:33
  Speaker 2: platform like fooda that at the time had two thousand restaurants,
• 16:36
  Speaker 2: And how do you have a loyalty program that sits
• 16:38
  Speaker 2: on top of two thousand brands, or how do you
• 16:40
  Speaker 2: think about syndication of different restaurant menus to this audience.
• 16:45
  Speaker 2: And so, after doing a lot of research, we talked
• 16:48
  Speaker 2: to a couple POS companies about, you know, is it
• 16:50
  Speaker 2: worth building some of our needs into their solutions, and
• 16:53
  Speaker 2: we came to the conclusion that we should build our
• 16:55
  Speaker 2: own and so that was about in twenty sixteen, so
• 16:59
  Speaker 2: we had been in BILD since about five years before
• 17:01
  Speaker 2: we made the decision to build our own POS. Frankly
• 17:04
  Speaker 2: was the best decision we've ever made, because within a
• 17:07
  Speaker 2: couple of years after launching our POS, now in like
• 17:10
  Speaker 2: let's to say twenty eighteen or so, we started doing
• 17:14
  Speaker 2: the early stages of AI and machine learning to do
• 17:17
  Speaker 2: all of our scheduling. And we could never have done
• 17:19
  Speaker 2: that if we didn't have access to the underlying data
• 17:21
  Speaker 2: that we have from our own POS and so all
• 17:26
  Speaker 2: the scheduling that happens on our platform, all the meal
• 17:30
  Speaker 2: prep information that goes to restaurants. So I mentioned earlier
• 17:33
  Speaker 2: that we give restaurants visibility about thirty days in advance.
• 17:37
  Speaker 2: We tell them exactly, you know, on this date, you're
• 17:39
  Speaker 2: going to go to this site, or you're going to
• 17:41
  Speaker 2: be preparing this amount of food, these items, and so
• 17:44
  Speaker 2: they could plan around procurement, they could plan around staffing,
• 17:48
  Speaker 2: and all that is all done via AI. You know,
• 17:51
  Speaker 2: there's not a human that's touching that. It's taking into
• 17:53
  Speaker 2: account everything from you know historic obviously historical sales at
• 17:57
  Speaker 2: that site. How restaurants similar to that restaurant does how
• 18:03
  Speaker 2: the weather the day of the week impact it's about
• 18:05
  Speaker 2: there's about about one hundred different variables that we're looking
• 18:09
  Speaker 2: at to be able to suggest what they should be bringing.
• 18:13
  Speaker 2: And restaurants had really benefited from that because we've reduced
• 18:17
  Speaker 2: waste over the years, so they're preparing the right amount
• 18:20
  Speaker 2: of food, they're not leaving sales on the table from
• 18:23
  Speaker 2: preparing not enough, and they're not over preparing and wasting
• 18:27
  Speaker 2: and you know, ingredients. So it's been a huge win
• 18:30
  Speaker 2: for a business.
• 18:31
  Speaker 1: That's cool. Yeah, you've been scheduling and forecasting with AI
• 18:35
  Speaker 1: back when it was called big data, you know, right,
• 18:40
  Speaker 1: just kind of different name, same thing, but much improved.
• 18:43
  Speaker 1: So can maybe you talk about how much the tools
• 18:46
  Speaker 1: have improved in the last couple of years.
• 18:49
  Speaker 2: Yeah, I think so, you know, on the machine learning
• 18:52
  Speaker 2: side of things and using data to make predictions, I
• 18:57
  Speaker 2: think that that's been really good for a long time,
• 18:59
  Speaker 2: you know. I think what the game changer is on
• 19:02
  Speaker 2: the l l M front is more the personalization that
• 19:06
  Speaker 2: goes into the experience from a user standpoint, I think
• 19:10
  Speaker 2: is a game changer. For example, And the other thing
• 19:14
  Speaker 2: that we're getting ready to roll out is tools to
• 19:17
  Speaker 2: help restaurants optimize their menu very specific to them, you know,
• 19:20
  Speaker 2: thinking about you know, how do you tweak the language
• 19:23
  Speaker 2: of the description, how do you know it based on
• 19:26
  Speaker 2: data that's that's worked at FOODA you know, so they're
• 19:29
  Speaker 2: not just using generic information. You know, how to make
• 19:33
  Speaker 2: pictures better, you know, all that just making the restaurant
• 19:36
  Speaker 2: product itself, you know better and helping restaurants help themselves.
• 19:42
  Speaker 1: Uh.
• 19:43
  Speaker 2: I find as is a huge game changer with the
• 19:45
  Speaker 2: current l MS. I think the other thing that we're seeing,
• 19:50
  Speaker 2: you know, we're kind of in the middle of I
• 19:51
  Speaker 2: wouldn't say we're early, and I wouldn't say we're totally
• 19:54
  Speaker 2: on the other side of it is the value that
• 19:56
  Speaker 2: it that it adds to just running our business day
• 19:58
  Speaker 2: in and day out right, and so you know, the
• 20:01
  Speaker 2: tools that we're building that are helping us execute our
• 20:04
  Speaker 2: business on the back office side, you know, and how
• 20:07
  Speaker 2: it's helping us be more efficient. You know that that's
• 20:10
  Speaker 2: a big game changer on our end.
• 20:12
  Speaker 1: And are you doing personally? You mentioned personalization for your customers,
• 20:16
  Speaker 1: So do they have they have personalization for the apps
• 20:20
  Speaker 1: and the websites that they use?
• 20:22
  Speaker 2: Yeah, so each So the first thing that this has
• 20:26
  Speaker 2: been going on for a long time is we you know,
• 20:29
  Speaker 2: when when you log in, it knows you know where
• 20:32
  Speaker 2: you work, so it knows what you've ordered in the past,
• 20:35
  Speaker 2: and so you're getting a view of what's available for
• 20:38
  Speaker 2: you and what's most likely to resonate for you. Now,
• 20:41
  Speaker 2: what we're taking is going one step further and saying, okay,
• 20:44
  Speaker 2: within these new menus that you might be seeing or
• 20:47
  Speaker 2: with it, or you know, what are add on items
• 20:50
  Speaker 2: that would complement the thing that you're already planning on
• 20:52
  Speaker 2: buying and so personalizing the experience the communication that goes out,
• 20:56
  Speaker 2: So how are we communicating to you? Is it via
• 21:00
  Speaker 2: an email that goes out? Is it an app notification?
• 21:04
  Speaker 2: What does what do the notifications say reminding you to
• 21:07
  Speaker 2: order by ten am if you're at a delivery program.
• 21:10
  Speaker 2: So it's really customizing your experience based on these tools
• 21:15
  Speaker 2: that didn't exist three years ago. So that's how we're
• 21:19
  Speaker 2: using it from a customer experience standpoint.
• 21:21
  Speaker 1: A very cool. So it's with the end customer, with
• 21:23
  Speaker 1: the end customer, correct, got it? Yeah, Because I know
• 21:27
  Speaker 1: some of the enterprise level software solutions, you know, AI
• 21:32
  Speaker 1: gives them the ability to kind of you know, create
• 21:36
  Speaker 1: bespoke dashboards for some of their big customers, but they've
• 21:39
  Speaker 1: been oh kind of hesitant to do it right because
• 21:42
  Speaker 1: it opens a can of worms.
• 21:44
  Speaker 2: Yeah, So a couple things on that topic. One is,
• 21:48
  Speaker 2: we do have a website that's dedicated to just our clients,
• 21:54
  Speaker 2: and so you have you think about admins or super
• 21:57
  Speaker 2: users that are managing the programs or want to visit
• 22:00
  Speaker 2: the data for managing on their behalf, and so we
• 22:03
  Speaker 2: provide them a lot of information regarding you know, usage
• 22:07
  Speaker 2: and what's what's resonating at their locations. We also get
• 22:12
  Speaker 2: user feedback that they have access to, so they're getting
• 22:14
  Speaker 2: a lot of information from that standpoint. The other thing
• 22:18
  Speaker 2: that we sort of hinted at but we didn't really
• 22:20
  Speaker 2: talk about in detail is AI does all the scheduling.
• 22:24
  Speaker 2: So AI is what tells the restaurant to go to
• 22:28
  Speaker 2: you know, cite A on this date and site B
• 22:32
  Speaker 2: on this date, and so a human isn't figuring out,
• 22:35
  Speaker 2: you know, what brands you're getting on any given day.
• 22:38
  Speaker 2: That's all being done by an algorithm that's you know,
• 22:41
  Speaker 2: based on historical patterns and all those other things that
• 22:44
  Speaker 2: I mentioned earlier, and so the actual solution from a
• 22:48
  Speaker 2: day to day standpoint is not created by a human.
• 22:51
  Speaker 2: It's created by, you know, an algorithm that is making
• 22:54
  Speaker 2: a determination of what you're most likely to like, what
• 22:57
  Speaker 2: you're most likely to buy.
• 22:58
  Speaker 1: Yeah, very cool. The system, you know, as you're talking
• 23:02
  Speaker 1: about is learning from historical behavior, adjusting restaurants scheduling automatically.
• 23:08
  Speaker 1: So you know, is was this something you were even
• 23:11
  Speaker 1: doing five years ago? Yeah, yeah, we started the We
• 23:14
  Speaker 1: started doing that in twenty eighteen is when we started
• 23:17
  Speaker 1: doing that. It was funny we before that we had
• 23:20
  Speaker 1: what we thought were sophisticated tools for doing the scheduling
• 23:24
  Speaker 1: and matching, you know, and we thought we were really
• 23:27
  Speaker 1: good at it with the tools we had, and then
• 23:30
  Speaker 1: we did a test where we did we did an
• 23:32
  Speaker 1: ab test within a market, and we gave half the
• 23:36
  Speaker 1: sites to an AI and half the sites to the
• 23:40
  Speaker 1: human team, and the AI beat it by had seven
• 23:44
  Speaker 1: percent greater same store sales over the human in month one,
• 23:49
  Speaker 1: and so we said, we're only going to get better,
• 23:52
  Speaker 1: and so we made a decision by month we did
• 23:55
  Speaker 1: a second month just to make sure that there wasn't anything,
• 23:59
  Speaker 1: you know, in consistent going on and then we decided
• 24:02
  Speaker 1: to roll it out everywhere, and so we pretty much
• 24:05
  Speaker 1: saw improvement in same source sales of about somewhere between
• 24:09
  Speaker 1: ten and twelve percent by rolling out an algorithm way
• 24:12
  Speaker 1: back in twenty eighteen. So it was a game changer. Awesome,
• 24:17
  Speaker 1: very cool. Let's shift gears a little bit. What are
• 24:20
  Speaker 1: you seeing in workplace attendance today and how does it
• 24:23
  Speaker 1: how's it compared to twenty nineteen, how does it compare
• 24:26
  Speaker 1: to twenty twenty four if you could talk about the fluctuations.
• 24:31
  Speaker 2: Sure, so we get some third party data and we
• 24:33
  Speaker 2: also have some access to, you know, data for clients
• 24:37
  Speaker 2: that that we've been operating for.
• 24:40
  Speaker 1: A long time.
• 24:41
  Speaker 2: Overall, the numbers right now is that across the whole
• 24:46
  Speaker 2: week in the top ten metro areas, we're at about
• 24:49
  Speaker 2: fifty five percent of the attendance that was there in
• 24:53
  Speaker 2: the beginning of twenty twenty. So averaged out obviously you
• 24:56
  Speaker 2: get you know, closer to seventy eighty you know, plus
• 24:59
  Speaker 2: percent done Tuesdays and Wednesdays, maybe a little less on
• 25:02
  Speaker 2: Mondays and Thursdays, and then on Fridays you're you're down
• 25:06
  Speaker 2: into the single digits. Right in a lot of locations
• 25:09
  Speaker 2: and so but net net, it's about fifty five percent
• 25:13
  Speaker 2: if you look at the whole week. Now, if you
• 25:15
  Speaker 2: think about where were we even in twenty twenty four,
• 25:19
  Speaker 2: that's about five or six percent higher. So we're in
• 25:21
  Speaker 2: the high forties. So we've noticed a couple percentage increases
• 25:26
  Speaker 2: pretty consistently each year, and it's continued and so you know,
• 25:31
  Speaker 2: this year is about you know, two percent ahead of
• 25:33
  Speaker 2: last year. So it's a it's a slow moving, you know,
• 25:36
  Speaker 2: line of up. I don't know, in fact, I don't
• 25:40
  Speaker 2: think we'll ever see the numbers that we saw in
• 25:42
  Speaker 2: twenty twenty. We believe as a company that hybrid work
• 25:45
  Speaker 2: is here to stay and are the value that we
• 25:49
  Speaker 2: provide to our clients and restaurants has actually increased in
• 25:52
  Speaker 2: a hybrid world where you're getting daily participation and daily
• 25:57
  Speaker 2: attendance is going up and down.
• 26:00
  Speaker 1: And so you do.
• 26:01
  Speaker 2: Need really sophisticated tools to be able to figure out,
• 26:04
  Speaker 2: you know, what, what are the sales that you should
• 26:06
  Speaker 2: expect on you know, certain days versus others, depending on
• 26:09
  Speaker 2: the client site, their pattern of work, day attendance. And
• 26:13
  Speaker 2: so we have found that we're we're our value is
• 26:16
  Speaker 2: much higher from a schedule standpoint, From an execution and
• 26:21
  Speaker 2: cost standpoint, we could scale up and scale down. So
• 26:24
  Speaker 2: for example, that cafeteria that has eight stations probably has
• 26:28
  Speaker 2: eight stations that are open on Tuesdays and Wednesdays, goes
• 26:32
  Speaker 2: down the one or two on Fridays, you know, but
• 26:35
  Speaker 2: we're able to operate in a much more profitable manner
• 26:38
  Speaker 2: for our clients, and so so hybrid has been definitely
• 26:43
  Speaker 2: a tailwind for us.
• 26:44
  Speaker 1: Yeah, I'd imagine so. Fun fact, I'm more of a
• 26:48
  Speaker 1: Monday and a Friday guy when I go into the
• 26:50
  Speaker 1: office because I like the I like the reduced traffic.
• 26:53
  Speaker 1: I like less people in the office to annoy me.
• 26:55
  Speaker 1: It's it's kind of how I roll opposite everybody else
• 26:59
  Speaker 1: Monday and too.
• 27:00
  Speaker 2: I need to kick off the week, you know, you
• 27:04
  Speaker 2: know by being on and so I prefer Mondays to start.
• 27:07
  Speaker 1: Yeah, definitely. And how important has food become to driving
• 27:12
  Speaker 1: office attendance? Yeah?
• 27:14
  Speaker 2: Absolutely, So you know, clients and you know, when I
• 27:18
  Speaker 2: think about the what was motivating them when food has
• 27:23
  Speaker 2: started way back fifteen years ago. Back then it was
• 27:25
  Speaker 2: all about productivity and so, you know, especially with a
• 27:29
  Speaker 2: lot of you know, financial services firms, trading firms, they
• 27:33
  Speaker 2: wanted employees to stay in and so they were paying
• 27:35
  Speaker 2: for food to make sure they weren't going out.
• 27:38
  Speaker 1: Yeah, on that food. We joke about that at Bloomberg
• 27:40
  Speaker 1: all the time, exactly.
• 27:43
  Speaker 2: And then what we saw then, you know, leading into
• 27:46
  Speaker 2: the pandemic and definitely accelerating the early days of the pandemic,
• 27:49
  Speaker 2: it was all about recruitment and retention and engaging, you know,
• 27:53
  Speaker 2: with your team, and so that was definitely a thing.
• 27:56
  Speaker 2: And then once the return to work you know strategies
• 28:01
  Speaker 2: started being tested, it was all then we added that
• 28:04
  Speaker 2: other layer to the value prop of hey, motivation to
• 28:08
  Speaker 2: come in, the concept of earning your commute. And so
• 28:11
  Speaker 2: if your employer can provide some compelling offerings while you're
• 28:14
  Speaker 2: at work, all the more reason why you'll go in.
• 28:18
  Speaker 2: And so you stack those things on top of it, productivity, recruitment, retention,
• 28:23
  Speaker 2: and now you know the concept of earning the commute.
• 28:25
  Speaker 2: It's been interesting how the value prop has gotten you know,
• 28:28
  Speaker 2: bigger over the years, not just different, you know, because
• 28:31
  Speaker 2: those other things didn't go away, It got stacked. And
• 28:34
  Speaker 2: so that's why I think, you know, we're seeing more
• 28:37
  Speaker 2: employers that the kinds of employers that we're we're seeing
• 28:40
  Speaker 2: today that wanted to discuss food programs either providing just
• 28:44
  Speaker 2: access or actually paying for food. They were not interested
• 28:48
  Speaker 2: in that, you know, ten years ago. Now you have
• 28:51
  Speaker 2: you know, warehouses, industrial facilities that are very interested in
• 28:55
  Speaker 2: the in the topic so solely but surely, you know,
• 28:58
  Speaker 2: we're seeing more and more industries, and once industries start adding,
• 29:01
  Speaker 2: you know, a program, it becomes table stakes within competitors
• 29:06
  Speaker 2: and there's usually no taking anything away.
• 29:08
  Speaker 1: Yeah, the way that the whole dynamic has changed over
• 29:10
  Speaker 1: the last handful of year has been really interesting. What's
• 29:14
  Speaker 1: one workplace dining trend people aren't paying enough attention to?
• 29:17
  Speaker 2: I would say, I don't know if it's that they're
• 29:21
  Speaker 2: not paying attention, But it starts with having great food,
• 29:24
  Speaker 2: you know, and so ensuring that the restaurant network.
• 29:29
  Speaker 1: It starts with the restaurant product.
• 29:30
  Speaker 2: You know. Obviously technology is a big part of what
• 29:33
  Speaker 2: we do, account management is a big part of what
• 29:36
  Speaker 2: we do, but it really starts with a restaurant product,
• 29:39
  Speaker 2: which is who do which are the brands that you're
• 29:41
  Speaker 2: working with? You know, does a food match where people
• 29:45
  Speaker 2: want to be eating at lunch. It's really as simple
• 29:48
  Speaker 2: as that. And making sure that you've got the food
• 29:50
  Speaker 2: that people want. And if you do that, usually everything
• 29:53
  Speaker 2: else falls into place.
• 29:54
  Speaker 1: You know.
• 29:55
  Speaker 2: It's you know, kind of like real estate, you know,
• 29:57
  Speaker 2: it's it's it's the location, you know, and in our space,
• 30:01
  Speaker 2: it's the food.
• 30:01
  Speaker 1: Yeah. And you said you've been doing this for fifteen years, right,
• 30:07
  Speaker 1: fifteen years? All right, So what's what's the excess strategy? Man? Oh?
• 30:12
  Speaker 2: Well, you know, if this was twenty nineteen, we'd be
• 30:14
  Speaker 2: big enough to have ipo'd already. But you know, as
• 30:18
  Speaker 2: you probably know, the markets have shifted in regards to
• 30:21
  Speaker 2: how big you need to be and profiles of companies,
• 30:23
  Speaker 2: and so we're right now, we're just focused on continuing
• 30:26
  Speaker 2: to grow. Don't have you know, any you know, priority
• 30:30
  Speaker 2: on any you know, single type of exit. But we
• 30:32
  Speaker 2: do have all institutional investors, you know, we're VC backed,
• 30:37
  Speaker 2: and so at some point our VC partners are going
• 30:39
  Speaker 2: to want an exit, but I think they still see
• 30:42
  Speaker 2: a great opportunity to grow, and so that's what we're
• 30:44
  Speaker 2: focused on.
• 30:45
  Speaker 1: Yeah, it's very cool. I mean, it's a very interesting story.
• 30:47
  Speaker 1: Asset light food service. I mean, that's that's a very
• 30:51
  Speaker 1: very unique position to be in. My friend, Yeah, absolutely
• 30:55
  Speaker 1: all right, good stuff man, thanks for doing this. That
• 30:57
  Speaker 1: was great. Good seeing you again. Yeah, for sure.
• 30:59
  Speaker 2: Man.
• 30:59
  Speaker 1: I want to thank the audience for tuning in. If
• 31:02
  Speaker 1: you'd like to find out more about FUDA, go to
• 31:04
  Speaker 1: FUDA that's f O O d a dot com. And
• 31:08
  Speaker 1: if you liked our discussion, please share with your friends
• 31:11
  Speaker 1: and colleagues. Check back soon for an interview with t.
• 31:13
  Speaker 2: G I.
• 31:14
  Speaker 1: Friday CEO Ray Blanchette