Local vending machine startup pivots after spat with health department

ELYA, a startup owned by Danny Sterling, changed the use of its refrigerated vending machines to focus on third-party items and launched a delivery model for its prepared meals. (Photo courtesy of ELYA)

ELYA wanted you to eat like your ancestors by buying its in-house meals from its high-end vending machines. But the year-old local startup ran into an obstacle those ancestors didn’t have to contend with: the state health department.

The company, whose name stands for Eat Like Your Ancestors, has been forced to rethink the use of its signature refrigerated machines and launched home delivery service after its original business model caused a dispute with the Virginia Department of Health.

The fridges, which were once the company’s primary means of selling its own line of healthy prepared meals, have been entirely restocked with a new range of third-party, grab-and-go foods, snacks and beverages in the last several weeks.

The operational shuffle came after the VDH cried foul over the company’s usage of the fridges in May 2021 for not complying with state food regulations.

ELYA launched in October 2020 and within about half a year had begun to set up its machines in a couple locationsaround town. The company’s quick-serve entrees include a chicken-and-rice bowl and a Thai curry bowl among other offerings. Under the original business model, a customer would swipe their credit card in order to open the fridge and pull out a meal or snack.

ELYA owner Danny Sterling said he thought he was all squared away with the health department when the company launched, but later VDH contacted him for more information about the fridges.

“The fridges were approved through the health department and everything was good to go,” Sterling said. “We were very upfront about the operation and the business plan and how the machines work … Everything made sense to our local health department. I think it was a disconnect with the central office. It was purely the fact we were putting prepared meals in a machine that wasn’t monitored by the presence of a human at all times.”

Sterling said the hang-up was that VDH was concerned about the possibility that someone could tamper with the prepared meals in the fridges without in-person monitoring, and the VDH felt the company’s remote methods of monitoring its machines weren’t adequate.

Sterling corresponded with the state for several months about a special permit to continue to use the machines as he originally planned but ultimately decided it didn’t make financial sense to continue down that road.

“It just got to a point with the central office where we didn’t see a super clear path forward. There was a path forward, it just wasn’t economically feasible,” he said.

ELYA swapped out its prepared meals for third-party packaged foods in its refrigerated vending machines after its original business model ran afoul of health department regulations. (Jack Jacobs photo)

In an emailed statement, a Virginia Department of Health official said that while ELYA’s initial model violated state regulations, the agency was willing to find a workaround.

“ELYA’s original business model did not conform to Virginia’s Food Regulations (12VAC5-421) that require all food establishments to have a designated person in charge (PIC) present during all hours of operation,” Food and General Environmental Services Director Olivia McCormick said in an email. “ELYA pursued a variance to this requirement, but due to insufficient documentation the request was denied in November of 2021. VDH offered to work on an amended variance with ELYA, but in the end ELYA decided not to pursue a variance in February of 2022.”

With the original plan a no-go, ELYA launched home delivery of its prepared meals in December. The service is offered within a 30-mile radius of the company’s Manchester headquarters and kitchen.

Sterling said the move quadrupled sales, and the success of the venture helped motivate him to pivot the model and allowed him to find a way to reuse the vending machines. He said the machines cost $4,800 new with shipping, and the company has six of them (half of which were bought used).

“Being candid, I hate sunk costs, so there’s that. It’s really hard for me to let stuff go, especially when I love it so much. I love the tech of the fridges. I think it’s so innovative and cool,” Sterling said.

ELYA now has four vending machines around town that serve offerings from companies like Rebbl, a California-based company that makes health-conscious beverages, and Mid-Day Squares, a Canadian chocolate protein bar brand.

Sterling said the company has tried to stock the fridges with brands that aren’t as common locally, and the move has had a good reception. The machines are located at The Ella apartment complex near Scott’s Addition, at The Locks Tower apartments downtown, at 3121 W. Leigh St. in Scott’s Addition and the company’s Manchester headquarters.

“We’re still running the machines because we’re able to put packaged foods in them just like a vending machine,” he said. “My wife has really headed up research and development for new consumer packaged goods companies, so we’ve been getting some pretty obscure stuff from all across the world.”

Sterling said demand for additional machine installations is strong and there’s a waitlist for new locations. He added that the machines help advertise the company and have driven online sales of the prepared meals.

The company does its home meal deliveries with an in-house team and has four employees. It is working on expanding its number of drop-off locations for prepared meal orders. In late April, it plans to roll out catering service.

Looking forward, Sterling said ELYA is hungry for a bigger space than its current headquarters at 7 E. Third St.

ELYA, a startup owned by Danny Sterling, changed the use of its refrigerated vending machines to focus on third-party items and launched a delivery model for its prepared meals. (Photo courtesy of ELYA)

ELYA wanted you to eat like your ancestors by buying its in-house meals from its high-end vending machines. But the year-old local startup ran into an obstacle those ancestors didn’t have to contend with: the state health department.

The company, whose name stands for Eat Like Your Ancestors, has been forced to rethink the use of its signature refrigerated machines and launched home delivery service after its original business model caused a dispute with the Virginia Department of Health.

The fridges, which were once the company’s primary means of selling its own line of healthy prepared meals, have been entirely restocked with a new range of third-party, grab-and-go foods, snacks and beverages in the last several weeks.

The operational shuffle came after the VDH cried foul over the company’s usage of the fridges in May 2021 for not complying with state food regulations.

ELYA launched in October 2020 and within about half a year had begun to set up its machines in a couple locationsaround town. The company’s quick-serve entrees include a chicken-and-rice bowl and a Thai curry bowl among other offerings. Under the original business model, a customer would swipe their credit card in order to open the fridge and pull out a meal or snack.

ELYA owner Danny Sterling said he thought he was all squared away with the health department when the company launched, but later VDH contacted him for more information about the fridges.

“The fridges were approved through the health department and everything was good to go,” Sterling said. “We were very upfront about the operation and the business plan and how the machines work … Everything made sense to our local health department. I think it was a disconnect with the central office. It was purely the fact we were putting prepared meals in a machine that wasn’t monitored by the presence of a human at all times.”

Sterling said the hang-up was that VDH was concerned about the possibility that someone could tamper with the prepared meals in the fridges without in-person monitoring, and the VDH felt the company’s remote methods of monitoring its machines weren’t adequate.

Sterling corresponded with the state for several months about a special permit to continue to use the machines as he originally planned but ultimately decided it didn’t make financial sense to continue down that road.

“It just got to a point with the central office where we didn’t see a super clear path forward. There was a path forward, it just wasn’t economically feasible,” he said.

ELYA swapped out its prepared meals for third-party packaged foods in its refrigerated vending machines after its original business model ran afoul of health department regulations. (Jack Jacobs photo)

In an emailed statement, a Virginia Department of Health official said that while ELYA’s initial model violated state regulations, the agency was willing to find a workaround.

“ELYA’s original business model did not conform to Virginia’s Food Regulations (12VAC5-421) that require all food establishments to have a designated person in charge (PIC) present during all hours of operation,” Food and General Environmental Services Director Olivia McCormick said in an email. “ELYA pursued a variance to this requirement, but due to insufficient documentation the request was denied in November of 2021. VDH offered to work on an amended variance with ELYA, but in the end ELYA decided not to pursue a variance in February of 2022.”

With the original plan a no-go, ELYA launched home delivery of its prepared meals in December. The service is offered within a 30-mile radius of the company’s Manchester headquarters and kitchen.

Sterling said the move quadrupled sales, and the success of the venture helped motivate him to pivot the model and allowed him to find a way to reuse the vending machines. He said the machines cost $4,800 new with shipping, and the company has six of them (half of which were bought used).

“Being candid, I hate sunk costs, so there’s that. It’s really hard for me to let stuff go, especially when I love it so much. I love the tech of the fridges. I think it’s so innovative and cool,” Sterling said.

ELYA now has four vending machines around town that serve offerings from companies like Rebbl, a California-based company that makes health-conscious beverages, and Mid-Day Squares, a Canadian chocolate protein bar brand.

Sterling said the company has tried to stock the fridges with brands that aren’t as common locally, and the move has had a good reception. The machines are located at The Ella apartment complex near Scott’s Addition, at The Locks Tower apartments downtown, at 3121 W. Leigh St. in Scott’s Addition and the company’s Manchester headquarters.

“We’re still running the machines because we’re able to put packaged foods in them just like a vending machine,” he said. “My wife has really headed up research and development for new consumer packaged goods companies, so we’ve been getting some pretty obscure stuff from all across the world.”

Sterling said demand for additional machine installations is strong and there’s a waitlist for new locations. He added that the machines help advertise the company and have driven online sales of the prepared meals.

The company does its home meal deliveries with an in-house team and has four employees. It is working on expanding its number of drop-off locations for prepared meal orders. In late April, it plans to roll out catering service.

Looking forward, Sterling said ELYA is hungry for a bigger space than its current headquarters at 7 E. Third St.

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Dr. Abe C. Gomez
Dr. Abe C. Gomez
1 month ago

Typ. gov regulations. Regulations that mean well and are in place for public safety but I’m willing to bet the gov employee on the other end from Danny who makes the decisions works maybe 40hrs a week?? – probably less.

I’m sure there are ways to amend the problem without breaking the rules and without crushing Danny’s business model, via a special provision, but I’m also willing to bet that person (gov employee) just doesn’t care….

Chris Crews
Chris Crews
1 month ago

You’re talking about a prepared food product. Even in a convenience store, there’s always an employee there to maintain the integrity of the storage. If someone leaves a door ajar, it gets closed. If a cooler is running too hot, someone is there to move product and arrange a repair. It’s somewhat akin to an “honor system ABC store”. You need a physical presence to maintain the integrity. Speaking from 40 years of restaurant work…

Craig Davis
Craig Davis
1 month ago

… when in doubt, blame the gov’t workers trying to protect public safety. I hope this guy’s business absolutely kills and the out of the box, disruptive thinking on using the machines is really innovative. The article makes clear though that the health dept. was willing to try to work out a solution, and he made the decision to pivot – apparently a great call based on the increase in sales.

Nathan Van Arsdale
Nathan Van Arsdale
1 month ago

Just because you’re a small business doesn’t mean you don’t have to take the same precautions as other businesses to protect people’s health. Why go after the gov employee who was just doing their job?

Last edited 1 month ago by Nathan Van Arsdale
Carl Schwendeman
Carl Schwendeman
1 month ago

I feel kind of worried if the Health Department is upset about this.

Nathan Van Arsdale
Nathan Van Arsdale
1 month ago

uh? Machines break and their isn’t a person there to take care of the food if it does break. I’d be upset if the health dept. didn’t look into this.

Lee Gaskins
Lee Gaskins
1 month ago

Please get your machines into schools! Need healthier choices.

Boz Boschen
Boz Boschen
1 month ago

The “vending machine” seems to be the same, with the goods simply locked in the fridge until a customer locks it by paying. What to say someone doesn’t tamper with the other food now, just because it was prepackaged? I would have preferred to see a solution that allows fresher, local food to be served. I applaud them for pivoting and seizing the home delivery opportunity.

Matt Faris
Matt Faris
1 month ago
Reply to  Boz Boschen

I may be wrong but I don’t recall seeing food that requires refridgeration in vending machines. Wouldn’t continuous power be a need to monitor spoilage?

Ed Christina
Ed Christina
1 month ago
Reply to  Boz Boschen

Why didn’t he just make a machine that kept food separated, so you could only access your food and not tamper with others?

Matt Faris
Matt Faris
1 month ago
Reply to  Ed Christina

Ed, I’m guessing it isn’t that easy to ‘just” make that machine. I suspect it would still need to be monitored for consumer safety.

Ed Christina
Ed Christina
1 month ago
Reply to  Matt Faris

If you can only access your food, you can’t tamper with other people s food.

Matt Faris
Matt Faris
1 month ago
Reply to  Ed Christina

Ed, I was more concerned about continuous refrigeration. How would the customer know whether the product was maintained at proper temperatures? What if power was off at 9:00 pm. then came back on at 6 am? I suspect these units aren’t as tightly sealed as a typical refrigerator. Could the consumer be sure the food was safe?

Ed Christina
Ed Christina
1 month ago
Reply to  Matt Faris

An IOT sensor would fix that issue

Matt Faris
Matt Faris
1 month ago
Reply to  Ed Christina

Agreed. I just think that’s one of the hurdles the VDH has. Perhaps the rules are antiquated.