Podcast

Hardware to Save a Planet

Building the Rails to Eliminate Single-Use Plastic Water Bottles with Manuela Zoninsein, CEO and Founder at Kadeya

Dylan Garrett

VP | Head of Climate Tech Business

Additional Contributors:

Manuela Zoninsein

Published April 27, 2023

In this episode of Hardware to Save a Planet, Dylan is joined by Manuela Zoninsein, CEO and Founder at Kadeya. This company offers sustainable solutions by reimagining the entire supply chain of water bottles while pivoting away from single-use plastic bottles. Manuela explains how her company has developed a vending machine that recycles, sanitizes, and refills customized water bottles made from recycled glass and stainless steel. This eliminates single-use plastic bottles and reduces the carbon emissions from the manufacture and distribution of water bottles by over sixty percent.

Manuela is a Harvard graduate with a passion for sustainability since the age of eighteen. She is also an early-stage impact investor, supporting women-led companies focused on urban sustainability solutions. Kadeya is her third successful startup in the sustainability space.

To discover how we can address the sustainability issue of single-use plastic water bottles, check the key takeaways of this episode or the transcript below.

Key highlights

17:52 – 19:51 – We are not trying to change consumption patterns – Manuela explains that it is very difficult to drive sustainability by changing consumption patterns. Instead, Kadeya is creating the rails of a new economy by offering an alternate solution where all participants in the beverage industry can transition to the CEA system by offering consumers a sustainable, profitable solution that provides higher quality. This delivers improved environmental and human impact.

20:10 – 23:24 – Unpacking the concept of Kadeya – The company is building a network of mini-modeling plants in a machine the size of a vending machine. By miniaturizing the recycling stations, they can be placed at the point of sale or use. This eliminates the trucking required to recycle and refill the bottles and cuts carbon emissions. The washing, sanitizing, and refilling happen where the consumer is. The consumer drinks the beverage and returns the bottle to any station in the network. Manuela likens this to Citi Bike for bottles. You borrow the bottle, enjoy your product and return it for recycling and refilling.

25:10 – 30:22 – The business model at Kadeya – Manuela explains that Kadeya is a B2B company with a consumer focus. The company places the stations in workplaces, specifically industrial workplaces, and the units are leased to the company under a monthly subscription model. The corporate pays the subscription, and the bottles are filled with treated municipal water. The flat water is free and unlimited for the workers, and the company also offers carbonated and flavored water for a nominal price.

30:50 – 36:09 – The hardware behind recycling water bottles – The attention to detail starts with the shape of the bottles, which are flat on two sides, making them easy to carry around. Each bottle has a QR code that is scanned on return to evaluate the return percentage. An overhead camera and inbuilt software scan the bottle to detect any debris. The bottle then enters the wash subsystem that outperforms commercial dishwashers. Hot water jets clean and sanitize the bottle, which is then moved to the refilling stage and ready to be dispensed again.

Transcript

Dylan: Hardware to Save a Planet explores the technical innovations that are giving us hope in the fight against climate change. Each episode focuses on a specific climate challenge and explores an emerging physical technology solution with the person bringing it into reality. I’m your host, Dylan Garrett.

Dylan: Hello and welcome to Hardware to Save a Planet. I’m sitting down with Manuela Zoninsein, the Founder and CEO of Kadeya. We’ll be talking about putting an end to single use plastic beverage bottles. Plastic is an amazing material because it’s cheap and lasts forever. That also makes it really dangerous in single use applications like water bottles. Globally, we use 1.2 million bottles per minute. Or to make that more individual, in the US, we average 13 water bottles per month per person. We know from previous conversations on this show that only about 9% of plastic gets recycled. So there’s some opportunity there, but the best thing we can do is to reduce consumption of plastic in the first place. This is where Manuela and Cadea come in with a very cool piece of hardware that helps to change the entire supply chain of water bottles, and I’m really excited to learn more about that. To introduce Manuela quickly. She is an entrepreneur who’s been passionate about making an impact on food and sustainability her whole career. She has launched two AgTech businesses, one in China and one in Brazil. Prior to Kadea, she’s also an investor who supports women led companies focused on urban sustainability solutions. I’ll say that in the brief time I’ve gotten to know Manuela, I’ve been really impressed by her holistic view of the problem she’s solving and her drive to make her solution 100% better and not settling for anything less. Manuela, it’s really a pleasure to have you. Thanks for joining me.

Manuela: Thanks for having me, Dylan. And thank you for the kind words. I’m going to pull that out on my LinkedIn post for all the investors to see.

Dylan: Awesome. So maybe I’d love to start just hearing a bit about your background. And I read this bio, I think it was on your website, about how you were influenced by your childhood and your parents outlook on life. I’d love to hear a little bit more about that, if you’re up for it.

Manuela: Yeah, I’m an open book, so, yes. I was born in Brazil. My dad was Brazilian. He passed away 14 years ago, hence the past tense. And my mom is American, and they met actually in New York when they were both finishing their PhDs at The New School, which, if anybody knows, academia is the most liberal university in the United States. They actually study Marxism in the economics department. So my dad was a Marxist Economist. He led the Communist student movement in Brazil, fled the dictatorship, moved to Chile, where he finished his master’s and worked on Allende’s economic team. That was a democratically elected Communist government. There was a coup, which is not a secret that the CIA helped to fund and incept. So he fled Chile. Fled Chile and made his way to the US. And the new school. And my dad’s final dying words expressed regret at not having taken up arms for the cause and talking about the communist cause. So that was my dad. My mom is a Feminist Anthropologist. In addition to teaching the first generation of feminists in Brazil at the first university level course on feminism, she also drove Yellow Cab in Manhattan in the 70s, worked backstage at Woodstock, was a freedom fighter, helping to register black voters in the 60s in Tennessee. So my parents were on the front lines, I’d say, of some of the biggest social movements of the last hundred years. And so family dinner table conversations were debates usually around whether gender, class, or race was the bigger determinant in our society. And so, yeah, you could say I learned very early that my role was expected to be to help others and help make things better for the world. And also that we fought in systems. Right. We thought of the big picture. It wasn’t to volunteer at the soup kitchen, which was great and important work, but it was also okay if you volunteered at the soup kitchen. Not only is that a leaky bucket, but you’re not moving the systems at large to solve the fundamental problems or the root causes that led to needing a soup kitchen in the first place. So that’s how I think about things in the world.

Dylan: Wow, that’s amazing. I feel like we could do a whole podcast on this topic. Just as an aside, do you have any siblings?

Manuela: I have a younger sister. She is finishing her PhD right now at Berkeley. So I’m the only non-PhD in the family. I’m the black sheep who went into capitalism.

Dylan: Wow, okay. That’s a pretty incredible story. So you’ve taken that upbringing and channeled it toward food and sustainability, it sounds like. Can you talk a little bit about some of the things you’ve done prior to Kadeya?

Manuela: Yeah, absolutely. So before my dad passed away, I didn’t feel comfortable going into business. He never explicitly criticized it, but implicitly did not support it. So I went to journalism, and that was an acceptable career path. So I was lucky enough to have an opportunity to go to China in 2006. Just became obsessed, wanted to learn everything about it, really intrigued, and ended up getting a fellowship and moving there full time in 2007, and got a job with Newsweek Beijing Bureau with Melinda Liu, who founded the bureau in 1978. So I was a journalist for a few years, but looking back at my childhood and just at that first career move, I was always creating things. I created the first blogs for Newsweek. They didn’t have blogs, and we were going to cover the Olympics. And the Olympics are a two week long event, and Newsweek is a biweekly magazine so they were going to come out with one issue and with the blog, we were able to do constant live reporting. I covered the first story on social networking sites. The Facebook of China was called Xiang. I wrote the first story on agriculture and agriculture technology, and it just continuously was not moving fast enough for me. I wanted to really be telling the stories that were breaking open in front of us. And Newsweek was then acquired for a dollar. This was the time when the Internet blew up and traditional media was not prepared for that transition. And so my first business was a newsletter that I started. I was studying more at Chinese Tsinghua University and started writing about what was happening in agriculture technology in China and got enough subscribers and enough of an audience and enough demand to decide to go full time with that and go into building a business. So those are some examples where I was just looking for a trite cliche, but I think it’s true. Where was the puck going? And I wanted to be skating in that direction. And I’ve been in the climate for 15 years, almost 16. And back then, we had the data, right? Back then we knew about climate change and the impact, and now the rest of the world is starting to wake up. So I think it’s been my ability to think kind of in that systemic scale and large scale and think about what are the solutions we’re going to need as climate change and all the symptoms of climate change bear fruit. So I don’t know if that answers your question, but that’s a bit of background on how I transitioned from journalism into entrepreneurship.

Dylan: Yeah, no, that’s awesome. So you’ve been thinking about this climate challenge for 15 years, or not just the single use plastic issue that we’re going to talk about today, but more broadly, food and agriculture and agriculture technology, it sounds like. What is it that helped you zero in on the challenge that Kadeya is addressing?

Manuela: Yeah, so it was while I lived in China. I can say in retrospect, when I moved there in 2007, one of the first things I did was go out and buy a glass tea jar, because that’s what everybody did. And China is well known for its tea. Tea comes from China and it’s a big part of culture. And so I learned about tea, and I bought loose leaf tea leaves, and I had bags at home. And in the morning, I’d figure out what mix I wanted and I’d mix my tea leaves and I’d put them in my jar and add my hot water. Actually, I’d rinse the tea leaves first. That’s what you’re supposed to do. And then you add the hot water. And then you would walk around throughout the day. And I was studying, I was working. Everywhere I went, there were filtered hot water dispensers, and you just refill your tea jar. And by the time I left in 2015, people were carrying around single use bottles. And I remember there were a few documentaries that came out around that time. One was called Beijing Besieged by Waste, about how there was literally no more physical land space in the city and county of Beijing, and it’s a massive county for landfills. They had just exhausted the space. And so anything in China, obviously, right, you think 1.5/1.6 billion people are doing the exact same thing, right? The entire country is in the same time zone. So you pick up a pair of single use chopsticks, at that exact moment, 1.5 billion other people are doing the same thing. And so you just really learn to think in a more communal fashion. And it’s a little bit like the Platinum Rule, where if I’m permitted to do something and I like to do something, you should imagine and expect that others also will want to do that same thing. And so it first just became a personal thing. I was like, Well, I can’t ask 1.5 billion Chinese people to not carry around single use bottles if I’m carrying them around. So I stopped, right? And that’s just how I think, again, goes back to my upbringing. So by the time I left China, I was really asking myself on the philosophical side of things, okay, does becoming a wealthier and quote unquote developed nation mean that we necessarily have to pollute and waste more? That was the first question, right? China became wealthier, more modern. Does that necessarily mean that we all carry around single use plastic bottles? I don’t know. Can we break that link? And then also, more fundamentally, coming back to the US after I started my second business in Brazil and then moved back to the US in 2016, again, if we’re going to ask China to not carry around single use plastic bottles, America needs to stop. And you can blame us, I think, for starting that trend. And so that’s really where it came home for me, was, okay, I’m back in the US. I know what’s happening in China and everywhere else in the world. I know what population growth looks like. There’s just no way to support this much single use, even if we get recycling rates up. So that became the question that I was thinking about on a very local level. It was like, how do I solve this for myself and my community? Because I carry around my reasonable bottle, all my friends think I’m crazy. None of them do it. They love me, they understand me, and yet they won’t do it. If I can’t get my friends to do it, there’s no way I’m going to get a stranger and convince someone else. So let’s understand fundamentally what the problem is. Why is single use so successful? So I spent a lot of time doing that research and testing things out so that’s a big part of how China inspired me and kind of put that bee in my bonnet.

Dylan: I think it’s worth a minute before we go into what your solution is. Just to kind of talk about all of the things you could solve in climate change, all the problems we could tackle. Why is this one important? What is it about? I talked about just the sheer number of single use plastic bottles we use in the world, which was just kind of mind-boggling to me. But why is that a problem for the planet? How do you look at that?

Manuela: Yeah, I love this question, and I think about it a lot, right? Because when you think about the greatest contributors to global greenhouse gas emissions, single use packaging is not in the top five. Right. You’re going to think of concrete and steel, first of all. Absolutely. Like, you want the biggest bang for your so called buck in terms of reducing emissions. Focus on that. But the technology is not commercialized to decarbonize those products. And I’m not someone who’s going to wait for an Einstein to come up with that solution. I think there’s a lot of easier, lower hanging fruit available that we can change very easily, very quickly, that doesn’t depend on some sort of scientific revolution. We’re not waiting for fission to come to fruition. So that’s one thing. The other thing is, if you look at supply chains, and this is data from the World Economic Forum and Boston Consulting Group, they found that there are eight sectors whose supply chains so basically, scope three activities for those eight sectors comprise half of global emissions. I’ll just say fast moving consumer goods is the fourth.

Dylan: Okay, wow.

Manuela: So to translate that into specific fast moving consumer goods, not whether we recycle it or not, or if it’s incinerated or put in the landfill, and if you carry it around and use it in your own facility right. That’s like scope one and scope two, but scope three, before the product even gets in your doorway, just that supply chain.

Dylan: Right. The production of the material, the shipping.

Manuela: And the transportation.

Dylan: Of all the units and materials and everything. Yeah. Wow. Okay.

Manuela: Yeah. For the beverage sector is one slice of that. We’ve calculated what that possibly could be. Our estimates range for single use beverage containers ranges between half a percent to about 1.5% of all global emissions. So I’d say we’re probably in the top 50 of activities. But what’s really fun about what we’re doing, and this can transition into talking about Kadeya specifically coming away from China and the 15, 16 years I’ve been in Climate, first as a journalist, trying to just tell people about the problem, and then building an information service, and then in Brazil, building a peer-to-peer ecommerce platform for farmers. Over and over and over again, sustainability is seen as more expensive, lower quality, less convenient. Over and over and over. Right. I say sustainability and you either think like that’s for rich people or it’s going to be a crappy experience.

Dylan: The green premium kind of.

Manuela: Exactly. And so I set as our true north, that I want to prove that sustainability can be the most convenient, the highest quality, and the lowest cost option. And so that’s what’s really fun, I think, about focusing on this specific sector, is we can start to break some falsehoods around sustainability and show that sustainability is good for humans and good for business, not just good for the planet. And I think steel and cement and fission will be great, but I don’t think the individual human is going to necessarily directly understand or experience that. And so this is also a bit about changing the branding and the story we tell about what you can do with a sustainable solution.

Dylan: Right? No, I like that. I was thinking about that, too. And your China example is a great one to highlight here where the culture changed over time, and the culture used to support these reusable tea bottles that you were talking about, or containers that you were talking about, but then the culture changed to people using single use plastics. And I think in some ways, by tackling something that’s so core to so many people’s lives, like how they get their water, you can start to have a bigger halo effect on just our single use culture and tackling that in general.

Manuela: Yeah, absolutely. And one of my colleagues, Bridget Allen, who’s our Director of Growth, articulated it really well, where we’re focused at Kadeya on going to industrial workplaces as our go to market. And part of the conversation there is sustainability is one of the last things that a construction site at this moment is thinking about, but where our customers start getting really excited is the opportunity to have sustainability be ever present in the employees daily experiences. Right. That every time they go and get a bottle of Kadeya, they can feel they’re doing the sustainable right thing. And exactly to your point, because water is universal and it’s a frequently used product, we have an opportunity for people to kind of win those Mario points in the background of, like, oh, I’m feeling good. Like, I did the right thing. I did the right thing. I’m doing the sustainable thing. I can do the sustainable thing. Whereas the narrative today is like, oh my God, I can’t do the right thing. It’s so hard. Sustainability is such an uphill battle. How are we ever going to solve climate change? It’s impossible. Forget it. I’m going back to eating steak and driving my fossil fuel car and instead empowering people to feel like, wait a second, there is something right here within my reach I can do today that moves the needle a little bit, and I can feel like I can be part of the story and the solution yeah.

Dylan: And that could then expand to other personal decisions people make throughout their day.

Manuela: We can hope. Yeah, exactly.

Dylan: The other problem I was thinking about was just speaking of the kind of momentum behind our single-use culture. I think about this because companies like Coke and Pepsi, this is a huge business that is supported by Single-use plastic right today. So as we get into sort of your specific solution in the business, I’m curious to hear to what extent you’re competing with them and to what extent you think you need to work with them. Because taking on those giants just feels like such a formidable task.

Manuela: Yeah. So that’s another critical piece of the Kadeya strategy, is we do not want to compete with incumbents and we want to minimize the disruption to the status quo. First of all, I think consumer and culture change is very difficult and I don’t want to be in the business of that or at least I don’t want Kadeya to depend on behavior change for our solution to win. And so we have designed the business strategy to be a platform business where we’re creating the rails essentially of a new economy. We call ourselves the Liquid railroad where all the existing participants of the beverage sector today can very easily transition to the Kadeya system with superior profit margins. And I’ll even go out on a limb and say better quality products and of course, improved impact, not just environmental impact, but human impact. And I can talk a little bit more about how we’re helping humans to take better care of themselves, have access to great quality water and engage more directly with these brands that are struggling to really connect, I think, with Gen Zers and subsequent generations. And so we don’t want to do what Coke, Pepsi, Keurig Dr. Pepper, et cetera, et cetera do we want to be their partner? And that took a big philosophical leap for me, right. Because again, my communist dad, right, like Coke and Pepsi are evil. He never came right out and called them out. He wasn’t thinking about those brands in particular. But if you are an anti single use plastics advocate or campaigner, they are the enemies, right? They’re the devils. And I think we’re setting ourselves up for failure if we’re going to try to take on Coke. They’re just so powerful, so entrenched. Consumers love their products. They do their products really well. They do what they say they do really well. I don’t want to go up against them to be able to have the kind of impact I want to have. And I think that’s also a big transition for environmentalists to think about, not how do I go head to head against the status quo. I think we have to figure out how to integrate into the status quo and create solutions that are an easy transition for consumers so that the transition can succeed. And so that’s really how we think about the existing incumbents. And we really want to partner and support them in doing their business even better than they already do today and eliminate single use along the way.

Dylan: Yeah, which I’m sure they would love if they would get behind, if there was a good solution to do so.

Manuela: Yeah, I think so. We’ve spoken to a lot of them, and we are absolutely on the right track. I think there’s current business structures and incentives in the status quo that will take time for them to fully transition to Kadeya, but we A, have a path to getting there with them, and B, are still building a business like we’re starting with Zero. I’ve got a lot to do before I can handle Coke as a full customer. So we’ll be fine, and the timing will work out great for everybody.

Dylan: I’m remembering now, I once visited my brother-in -law in rural Morocco. He was in the Peace Corps there. And I remember everyone drank Coke in glass bottles, but they would collect all the glass bottles and ship them back to a bottling facility. I don’t know if that’s still the case. This was probably ten years ago.

Manuela: It might be. My understanding is the glass bottle reuse ecosystem still is thriving in Africa and Latin America, for the most part, and somewhat Europe. There’s not a single glass bottle reuse and sanitization facility left in the United States. You could not have that system today unless you invest in the infrastructure. But maybe I can talk a little bit about Kadeya so that we can kind of connect the dots for the listeners here. I think that’s actually a perfect segue. What Kadeya is doing is building a network of mini bottling plants. So instead of those huge glass bottling plants where like in your case in rural Morocco, where at the end of consumers drinking their beverages, right, they walked or cycled or drove back to a depot or a store dropped their glass bottles off, and then probably the store manager or whoever created those bottles and then waited for the coke truck to come back. Or they had their own truck, loaded those bottles in the back, tricked them however many miles away, and unloaded them manually, taking those crates. If they had an advanced system, maybe they just loaded the crates, and then there was a robot arm that took each bottle out. More likely it was a human taking out those bottles one at a time and putting them in a system to then go through, wash, sanitize, and inspect the bottles to then be retrucked somewhere else to be filled. Probably a Coke bottling facility to then be retrucked back out to the store. Right. So that’s like the full cycle. And Kadeya is basically doing all of that, but in a machine the size of a vending machine. And by miniaturizing, we place our stations at the point of sale or the point of use. So we eliminate all that trucking. And so the wash, sanitize, inspect, refill happens exactly where the consumer already is. And so you sell a beverage, when you’re done drinking it, you return the container to any station in the network. In that way, it’s like a City Bike for bottles. You borrow the bottle, the container to enjoy your product and return it. And then our station washes, sanitizes, inspects, and then refills it for the next consumer. And to your point exactly, I love the Morocco example. Everyone, I think when they think about single-use waste, they’re like, oh, those glass bottles, at least they’re reusing the glass bottle because plastic, we’re just throwing them away and they’re not getting recycled or very minimally. And same with aluminum cans. And you and I have talked about this. The problem is the trucking. That is the problem. That is the problem. And so everyone says, oh, well, recycling, that’s going to save us all. And it’s like, how you’re still going to have all that trucking. And recycling is incredibly energy and water inefficient. So it depends what you want to optimize for. But if you’re optimizing for a greenhouse gas footprint and water waste, recycling is not going to be the solution. And having an old style glass reuse system is also not going to be the solution.

Dylan: Right, yeah. I think when we talked earlier, didn’t you have a stat about how much of the total footprint of a bottled beverage is due to trucking itself?

Manuela: Yeah, it’s two thirds. Two thirds? 66%. So just under is due to producing the container anew whatever the material is blowing a new glass bottle. Although glass is higher energy use, if you’re just going to use it once, or plastic or aluminum, or your boxed container, producing that and then transporting it, filling it with the liquid, and then transporting it again through the traditional supply chain to then end up in the consumer’s hand, that’s two thirds of the carbon footprint. And so anyone here listening who thinks that investing in new materials is going to save us, that’s not the solution because you’re still producing that material and you’re still transporting that material. And so that’s still the greatest single bulk of your greenhouse gas footprint. Doesn’t matter if your bottle is made from algae and it decomposes in two days, which it doesn’t, that does not exist. I’m just making that up. But if that were the case, you still have that carbon footprint. All you’re doing is resolving the eyesore of plastic. Everyone got up in arms and we’re talking about plastic, and that’s great. The focus, I think, is on the physical waste, but it’s not on what’s behind that waste, which is the carbon and the water.

Dylan: So even if Kadeya washed and reused plastic bottles, you’d have a big impact because you’re eliminating all of the emissions of the logistics of moving those bottles around.

Manuela: Yeah. And the reason we don’t use plastic is because we use high heat to wash and sanitize our bottles. The problem with plastic is that it is not a stable material and so in temperature fluctuations and you probably know this better than I do and your team as well, but when you have a lot of temperature fluctuation, it degrades the material so we wouldn’t be able to continually reuse the bottles. A lot of people say, well there’s these new durable plastics and I have not found a plastic yet that would withstand our wash and guarantee that there isn’t degradation. And that leads to the second issue with plastics which is that they leach and so you get microplastics and no one wants to be consuming plastics, although we all are every single day. The stat that people throw around is that we have about a credit card’s worth of plastic in our bodies at any time. And microplastics have been found in the Arctics, in the snow, it’s in the most remote waterways. Like there’s plastic in everything. And very little research has been done on the health effects of that microplastic. But it’s been found in fetuses, right? And babies, when they’re born, it’s in their bloodstream. So I think that’s not supposed to happen. I think we don’t want that to continue to happen. So that’s the other problem with using plastic. We looked at aluminum, aluminum oxidizes and we are adding carbonation and we can do any beverage. So we are adding, like we talked about, coke and Pepsi. We could add syrups, we could do the AHA or Bubbly product line which is just flavoring and sparkling water. We could eventually do coffee. We can wash, we’ve already tested. We can wash and sanitize dairy products, coffee products. It’s just a different business model if we move into those different beverages. But aluminum oxidizes and so every aluminum can that you are consuming is lined with a plastic polymer. So everyone thinks that aluminum is going to be safer for them and it’s not even regulated. It never says that it’s BPA free, let alone BPC or BPS the other biphenyls. And aluminum from a carbon perspective is actually worse than plastic. So the problem is single-use and recycling. Expecting that we can use one container for a short period of time and throw it away is just a lie. It’s just a falsehood, it’s too good to be true. And we have to come up with thoughtful, creative business models that still deliver value to the consumer but don’t depend on those lazy shortcuts.

Dylan: Right? Okay. So I’m really excited to talk about the hardware. I do want to just quickly make sure we fill out the business model. So you describe these stations, who pays for the stations or is somebody buying the stations? Is it a service you’re selling? Can you talk about how that works?

Manuela: Yeah. So we are a B2B2C business. We place. The stations in workplaces, specifically industrial workplaces. Our first customer is a construction general contractor. We’re deployed in downtown Indianapolis on a major hospital construction site.

Dylan: Oh, cool.

Manuela: Yeah, and they’ve asked for seven more units. So the first customer is becoming a repeat customer, which is very exciting. And we won a SBIR Phase 1 with the Air Force. That’s a research grant from the Department of Defense. And we now have a commitment from, we have commitments from seven Air Force bases. We’re going with one to start with, and that’ll be the Phase 2 SBIR. So Air Force deployment is looking very likely in the near future. And we’re now talking to several airports to deploy for their workers. So think the tarmac workers, the cleaning staff, baggage handlers, those populations. As for the business model, we currently lease the station on a monthly subscription model. The corporate pays. And then the water, it’s just filtered. Municipal water is free and unlimited for the workers. And OSHA does require that these corporations make safe drinking water and containers available to these populations. So these corporations already have that line item. They are already offering free water overwhelmingly in the form of single-use. Okay, so Kadeya ends up being a real one to one for single use. We’re not in environments where the population is already using reusable bottles, S’well, Yeti, nalgene, et cetera. We’re not looking to compete with those products because those are great sustainable products. And if you already are using one of those, you’ve made the behavior change and the commitment to use something that does require a little bit more discomfort, a little bit more friction. So the worker gets free, unlimited water, the corporate pays. We’re now adding in carbonation and flavoring. Again, not our flavoring. We’re working with a major beverage company to add their flavorings right now. And we think the business model there will be. If you’re a worker, you want flat, great quality water that’s free. You want to add carbonation, you want to add flavoring, you want to add caffeine or electrolytes or any other functional benefit, you would pay for that. Just like if you went to a vending machine traditionally and went and bought an energy drink or a soda or something, or a juice. So that’s the business model at large. The one piece I’ll add real quick is that there’s a really strong data story to what we’re doing. So to interact with the station, just like City Bike, you can use a unique code. Right now we’re focused on integrating on the back-end with people’s security systems. So you can just use your security badge and you scan that on the front of the station. You get your beverage in a couple of seconds, and then every bottle has a laser etched QR code on the bottom. And so just like City Bike, we understand the throughput and the utilization across the whole network. So we have a view of, okay, how is the network performing? Where are we running low? Where is the machine not performing? Where do we need to send out someone for maintenance or need to replace a flavoring bag in a box or a carbon pack? But similarly, we know that on a per station basis and can start to understand on a per station basis what are the expected performance metrics. And then, similarly, on an individual basis, we attribute to the person how much they’re consuming. And that’s never happened before. And that helps the worker understand how hydrated they are, monitor and make sure that they are staying healthy and safe to do their job, make sure that there’s no risk of heat, illness or injury or something worse happening. And then we layer that data up, which is all anonymized to the corporate so that they can understand how their workforce is performing. And that’s really critical for an environment like a construction site where there is a high risk of injury if you become dehydrated. Also a really high risk of OSHA showing up and inspecting your site and looking for a lack of water access. And similarly, for a military base where you’re training cadets, for example, and you want them to be performing at their absolute best, understanding how hydration is going to help you ensure that your war force is at its peak and that you’re giving them the right amount of water to optimize their performance. That’s an exciting next layer of data that we’re preparing to roll out for these customers.

Dylan: Cool. Yeah. And that’s something you could never get by just dropping off the big pallet of plastic water bottles.

Manuela: Correct. Exactly.

Dylan: So you described the hardware, the stations a little earlier, and it sounds like physically what it’s doing is washing, sanitizing, inspecting and refilling these bottles. I’d love to just almost step through those processes and just talk about what’s actually happening in the hardware at each step, if you could do that.

Manuela: Yeah, absolutely. So I’ll take one step back, actually, before we can start washing your bottle, you return the bottle. Right. And we are getting a 100% bottle return rate with no penalty or deposit today. The hypothesis is that by linking the bottle ID to the worker ID, there’s a psychological element where the worker is encouraged or desires to do the right thing. At work, we hope to continue to leverage that psychological effect. So you return your bottle, and this is our glass bottle. This is made of recycled glass, so you can see it’s a little bit green tint. And then this is our stainless steel bottle. And as you can see, with both of them, they’re flattened on two sides. So this is our custom design. And that means that if you are walking around with a device, your laptop, you can lay it flat and it won’t roll off. The other exciting piece of that is if you’re walking around a military base, for example, or the airport where you can hold it in one hand with your smartphone.

Dylan: Nice.

Manuela: So we are optimizing for that kind of mobility and convenience piece. So you’ll place your bottle back into the station and two things happen right away. One is we scan the QR code on the bottom. That’s almost instantaneous. We want to make sure it is a Kadeya bottle. There’s probably going to be a lot of copycats and people are going to say, hey, that’s a cool bottle shape, I want to make one too. You return it, and if it’s not our custom QR code, we won’t accept it. Similarly, we have an overhead camera that takes a quick picture, and then we have a software that reads that picture to understand if there is any major debris in here that we won’t be able to wash and sanitize. I’m thinking a chicken bone, bubble gum, cigarette butt, plastic wrap, bugs, like whatever could end up in there. We don’t want to introduce that into our system. That could gum up the entire system. And then we’re going to spend tons of time cleaning out our stations constantly and trying to figure out, well, why did it not work? So we’ll do that scan and we’ll reject the bottle in that case as well. There’s a little light on the front of the station. In a 10th of a second, it tells you, we won’t accept your bottle. There’s no penalty. We’ll just say, you got to take your bottle. You can take it home, you could throw it away, recycle it, whatever. So we’ve got now a decent standard bottle coming into our system. Then we put it in a dirty bottle queue. Then as the bottles are waiting and moving through the queue, we enter the wash subsystem. And the wash subsystem outperforms existing commercial dishwashers, in part because we optimize that system to just wash our bottle over and over and over again. Right. If you have an industrial dishwasher or your home dishwasher, you’re putting all shapes and sizes there. And so that machine has to kind of optimize for a huge variety. We’ve been able to optimize for just one shape, and we use a series of hot water jets that move up and down on the inside and the outside of the bottle. And the wash is two steps. One is just high powered hot water jets. That’s how a bottling plant currently also cleans out a bottle. And so that’s like, if there was like, powder, like, you added an emergency pack to your bottle of Kadeya and then you let it sit overnight, and then it got kind of caked on the bottom, that’s going to help to loosen that up and remove it. And that’s not filtered water, but it is high temperature. We’re probably going to use gray water in that case because we want to reuse our water as much as possible. And then the second round is going to be using some detergents as well, and then the final step, which is moving into sanitizing, is going to be with filtered water and a rinse aid. And that’s also going to have some chemicals to sanitize the inside of the bottle. From there, we move to the dry station. All the stations that I’ve just described are custom-designed. They are not off the shelf. And we then dry the bottles. We have hot air jets that we’ve designed, and then we move the bottles over to our final inspection, which is the most important subsystem. And that’s two cameras, one assessing the outside of the bottle and one assessing the inside of the bottle. Very similar to the incoming inspection, but in this case, much more granular. So looking for blonde hair, a grain of rice, a hairline fracture, a chip in the lip, major denting in the case of the stainless steel bottle. Anything like that. Any risk? If it’s a false positive, we will still reject that. And we have an internal reject bin that will move the bottles. And the idea is we’ll collect those as frequently as needed to take them to be recycled. And then if it passes that final inspection, it goes into the storage queue waiting to be filled again. And then filling is pretty standard, that’s off the shelf type stuff.

Dylan: And then it’s got to get a lid put on it.

Manuela: Yes. The lid is a whole other conversation. We’re going to have to do a whole other podcast. We are working on the lid right now. Yeah, we’re working on the lid. And the issue with the lid actually is not the technology. Capping a bottle, as you might know, is like a very standard procedure. There’s all types of different capping tools and mechanisms that already exist for an assembly line, and actually washing them is not that hard given what we’ve had to overcome already with the bottles. It’s a regulatory issue.

Dylan: Okay.

Manuela: If we cap the bottle inside of the station, we are actually deemed a bottling plant.

Dylan: Oh, interesting. Okay.

Manuela – 00:42:57: And it elevates the compliance requirements that Kadeya has to meet and drives the cost of our station up way high. And so we are holding off until we have scalability and confidence in the bottle mechanism and the use cases and the business model before we then invest in digging in with governments to talk about that regulatory requirement.

Dylan: Okay. The lid is a rabbit hole.

Manuela: It’s a rabbit hole.

Dylan: Understood. Understood. So do you dispense a little lid or something that people can put on themselves?

Manuela: Yeah, exactly.

Dylan: What’s been the biggest challenge in getting that all to happen?

Manuela: I think about that question all the time. Whenever I’m going through something that seems challenging, I’m like, am I going to remember this? Am I going to look back at this and be like, that was really challenging? I would say that the technology has not been as challenging as I thought. We’re not putting a man on the moon, right? We’re not trying to figure out fission. These are all proven processes. We’re just changing the shape and the size. I’d say what we’re constantly reworking, which I love, is optimizing the model and tweaking the numbers, right? Because there’s a certain number of steps, as I just described, and each step requires a certain amount of time, but there’s levers you can pull to change that time, right? If you have higher heat, you can dry faster. It turns out that’s why we wash dishes with hot water, because they dry more quickly afterward. But then that means a higher energy use for operating the station. And what does that mean for our carbon footprint and the draw on what kind of voltage we need. So it’s mainly like making sure we have the right inputs and then moving the dial on those different factors to optimize them, and linking that with the business model and the use case to really understand what’s the optimal number of bottles and time and price at each of these different stages of our business. So that’s something I think will never go away, at least not for another decade. But it’s fun. That’s really fun for us.

Dylan: You mentioned just there, optimizing for the carbon footprint. That is something I wanted to ask you about. So we’ve talked about how this is better than shipping these bottles back to some central facility and doing it there, doing the washing and sanitizing and refilling there and then shipping them back. To what extent have you kind of been able to quantify that through life cycle analyses? And what does that look like?

Manuela: Yeah, so that is one area I invested early, even as a low-funded tech startup. We completed our first impact assessment in January of 2022, which means I started that in October of 2021, and I went full time January of 2021. So that was like one of the first things I invested in when I had any inkling of what our station was going to look like, at that point that impact assessment showed that we were I mean, just serendipitously, I guess. 64% less greenhouse gas intensive compared to PETE in plastic on a per use basis, even if you take into account the recycling rates for plastic and Kadeya’s case, take into account the full life cycle and operation of the station and then disposal of the station after five years and 67% less greenhouse gas intensive than aluminum cans. So just as a tiny aside shows you that aluminum is worse from a greenhouse gas perspective than PET, we’re now updating our impact assessment with boundless impact, which I highly recommend if anybody wants to contact them or reach out to me. And we are now shifting to the stainless steel bottle. We’re shifting to a few major operating decisions that we made on the station. We are waiting for those results, but we expect to be at about 85% less greenhouse gas intensive on a per use basis compared to either PET or aluminum, give or take a couple of percentage points there. And I think we can, in 2024, get to about 95% less greenhouse gas intensive on a per use basis. My goal is for us to be 99%, and I think the way we get to 99% less greenhouse gas intensive on a per use basis, holding the volume of Liquid constant compared to either PET or aluminum is because stainless steel is infinitely reusable. And so if we can optimize our operating model from a user perspective, and we can continue to get our bottles back we talked about this like you ask them to eventually zero, and we can get on a per use basis, your carbon footprint, your greenhouse gas footprint would essentially come to zero.

Dylan: Yeah. At that point, you’re kind of amortizing out the embodied carbon of the machine itself, of the station itself.

Manuela: Yeah. That’s a great way to put it.

Dylan: Yeah. And then part of that, I guess, is how do you get that machine to last as long as possible?

Manuela: Yeah. And how do we think about upcycling certain materials when we first design the station, and then when we take out materials to figure out how to reuse or upcycle those materials as well? And then you start getting into really granular GHG measurements. Right. Every subsystem is going to have its own GHG measurement, and we’ll be looking to optimize that over time.

Dylan: Thinking about the future of Kadeya, what do you think the company will look like in ten years, let’s say, or wherever you think that horizon looks like right now.

Manuela: I would love in ten years for every American to be consuming their beverages out of a Kadeya bottle.

Dylan: Right.

Manuela: Yeah. I think we can get there in ten years. To get to the globe might take 15 years, but I think we can do that. It’s going to be some major partnerships and some major step changes in the scale of producing these units and deploying them and executing successfully at each stage. But I think that the value proposition is there. And there’s network effects in what we’re building. And network effects we saw Uber, how quickly that grew and scaled globally. Right. Adding new cities every single day. I think Kadeya could get to that point as well.

Dylan: The numbers I mean, while I said something, 1.2 million bottles per minute is just kind of a crazy number to think about scaling to address that level of demand.

Manuela: Yeah. That same stat is usually referenced, like, when you talk about just the US. I think they say it’s 60 million plastic bottles, plastic water bottles a day in the United States. And so if we were just going to say that it’s the same people who are using those plastic bottles, let’s say each of those people is just drinking one plastic bottle, let’s call it 60 million people in the United States every day, wake up and get one bottle of plastic bottle. That means that they’re doing that every single day, right? 365 days a year for years and years and years. Well, to satisfy those people, Kadeya just needs to produce 60 million bottles

Dylan: Right. Yeah, one each.

Manuela: And maybe we could even deliver our value proposition with like 30 million bottles, because not everyone is going to drink their bottle at the exact same time. And so then you make your 30 million bottles or 60 million bottles, and that’s it. And then you satisfied that market.

Dylan: That’s the beauty of it.

Manuela: Right. You’re not constantly producing a new bottle every time someone’s going to drink another bottle of water.

Dylan: Do you have a sense for how many stations that translates to or is it a station at every grocery store or that kind of thing?

Manuela: Right. Our current analysis shows we can support 100 people per station

Dylan: Okay. On an ongoing basis, yeah.

Manuela: All their hydration needs. We’re actually getting better because that assumed that we were providing about 25 bottles an hour, and we’re now moving up to 100 bottles an hour. So it’s possible that over time, also, each station will be able to support more people. So it could be fewer and fewer stations, but I guess if we just call it 60 million divided by 100 it is 600,000. 600,000 stations?

Dylan: Yeah. There you go. That’s all?

Manuela: Yeah. I mean, cars are a more complex machine, and we’re pumping out way more than 600,000 a year.

Dylan: Do you foresee this kind of solution ever expanding beyond the beverage space? There’s so many other single-use containers and plastics and things in the world today for detergents and different food items and stuff like that. Do you ever see Kadeya tackling that, or do you think it’s possible that somebody might tackle those other categories?

Manuela: There are other circular economy businesses trying to tackle the sectors that you just mentioned, actually, and tackling them, I think, in a very sophisticated way. I will say Kadeya is the first that is completely decentralizing the wash and sanitize to the point of consumption. Everyone else is still relying a little bit on that trucking, that old school trucking, fossil fuel-based supply chain. So I do think we could eventually, 15, 20 years down the road, be thinking about other containers. The beauty of beverages and water specifically, is we’re drinking them multiple times a day. And so that frequency of consumption means that there’s a business need for many stations, and the higher density of our network, the more convenient it becomes. And so we could get to critical mass where we will be more convenient than the single-use option. Alternatively, if you look at a reusable salad container from Just Salad, for example, that’s awesome that they’re doing it, but you’re probably getting at most one salad a day and you’re not going to then invest as Just Salad in putting Just Salad stations, drop off stations all over a city. And therefore the convenience of returning the Just Salad container never reaches a point where you can compete against the single-use alternative effectively. So that’s a big hurdle that Kadeya has to think about, because the frequency of use then doesn’t drive the convenience factor that allows, in our case, Kadeya Reuse to beat single-use. But maybe once we have enough of a network of stations yeah, we could add on modules. Right. We could do other wash and sanitize. We would have to establish the universal form factor for the container, and everyone would have to figure out the business model to bring partners on to adhere to that form factor. But yeah, I think we could move to other food container products, I think laundry detergents and things like that. Again, it’s such a low frequency. That becomes a challenge, I think.

Dylan: Right, well, and also, you’re not able to make as big an impact by solving that problem as a result. Yeah, it makes sense. I have a few last questions, unless there’s anything you want to hit that we didn’t get to.

Manuela: No. This is so fun.

Dylan: Okay. Awesome. How optimistic or pessimistic are you about the future of our planet and why?

Manuela: I’m very optimistic.

Dylan: All right.

Manuela: One, because you got to be, it’s a tough battle, so there’s no reason to wake up every day feeling like you can’t win it. You have to believe that you can win it to maybe have a chance at winning it. And so that’s just out of pure utility. And then, two, I think the solutions already exist, and it’s just coming up with creative business models and understanding incentive structures and leveraging those to drive the new products and solutions that already exist. We just need to figure out how to get them into the market more effectively and strategically.

Dylan: Seems like you’re doing a good job of that with Kadeys, who is one other person or company doing something to address climate change that’s inspiring you?

Manuela: Yeah, I think they get a lot of shout outs, but I’ll do it anyway. Sophie Purdom at CTVC. Climate Tech VC, or is it Cleantech VC?

Dylan: Climate Tech VC. Yeah, somebody else just mentioned them. Yeah.

Manuela: Yeah. Awesome newsletter. Super analytical and data-driven. Just breaks down the problem and the opportunity in very tangible ways. And I also love that it’s a woman leadership team, and she’s super young, she and her colleagues. So it’s also awesome to see someone tackling this new problem with a kind of different set of tools and perspectives.

Dylan: Yeah, I love their content, and I often reference, like, they’ve done a good job of kind of breaking down the problem in terms of different sectors and their impact. Yeah, I reference their stuff all the time. Do you know Sophie?

Manuela: Yeah, she headlined an event that I presented at, and actually I went on stage right after her. It was like high five. But I’ve been following her work, like, before she had a team when it was just her, and so awesome to see her just killing it.

Dylan: Crushing it, yeah. That’s awesome. What advice do you have for someone who isn’t working in Climate today, but wants to do something to help? And this can include a book recommendation because I know you have one.

Manuela: Yeah. Okay.

Dylan: But it doesn’t have to.

Manuela: I’ll say two quick things. Well, one is more around the mind, and one is around the physical. The easiest thing anybody can do as an individual is stop eating meat. You want high ROI on your impact? Just giving up meat, just doesn’t work from calories in to calories out, it’s just, like, not economic. The math doesn’t make sense. Like, if you’re a kind of quantity person, look up the numbers and you’re going to be like, what? That’s dumb. That’s just inefficient. And then the others shout out. I guess I’m reading this now, and my team’s reading it. The Cold Start Problem by Andrew Chen. And he focuses on the big, fancy businesses that we’ve all heard of. Uber and Snap and Zoom, Clubhouse, LinkedIn. But I think it’s got some really incisive points to help any entrepreneur think big. And think about how do you start with your minimum viable market? What’s that smallest, smallest, nugget and population that you can solve for? And then how do you think about adding layers to scale beyond that? So, I am really enjoying the book.

Dylan: Awesome. Thanks for that. I need a new book, actually, so I’m going to check it out.

Manuela: It’s free on Kindle.

Dylan: Hey. There you go.

Manuela: Yeah.

Dylan: Well, Manuela, that was really fun. I’m really excited about what you’re doing. It was awesome to hear kind of the whole story, starting from your childhood and your parents background. That was fascinating. And I’m really just excited to see how Kadeya evolves. Thanks for sharing.

Manuela: Thanks for having me. I had so much fun as well. And please feel free to reach out to me on LinkedIn. If you’ve got a face and a title, I will accept your connection.

Dylan: I like that. Hardware to Save a Planet is brought to you by Synapse. To find out more about us and how we develop hardware solutions for the world’s most ambitious companies, head to synapse.com and then make sure to search for Hardware to Save a Planet in Apple Podcasts, Spotify and Google podcasts, or anywhere you like to listen, make sure to click subscribe so you don’t miss any future episodes. On behalf of the team here at Synapse, thanks for listening.