Manik Suri & Aaron Cohen (Therma)

This week we sat down with Manik Suri and Aaron Cohen, founders of cold chain startup, Therma.

This week we sat down with Manik Suri and Aaron Cohen, founders of cold chain startup, Therma. Manik and Aaron are both impact-motivated, seasoned entrepreneurs who share a compelling and candid story about their pivot into the climate tech space after a lightbulb moment around energy and food waste.

You have been working together for some time on a prior company, CoInspect. What’s the story there?

AC: Manik and I met at NYU, where I teach a course on the rise of Internet media. Manik was a third year law school student with political and policy experience when we met as co-founders of GovLab, which has the mission of bringing technology to government to make the public sector work better. From our work at the GovLab, we were sobered by how slow it was to effect change from within the government — so we set out to create a private sector solution.

MS: They say that life makes sense in the rearview mirror. We had set out to work on a problem that we thought was significant — improving health and safety compliance — only to discover that the solution we built applied to another problem that was perhaps even more significant. Our original approach was to build technology to reduce the frictions and cost of compliance through a company called CoInspect. We were trying to shift the dynamics in the antiquated compliance sector to use mobile apps and data analytics to allow businesses to better ensure management of health and safety standards, especially across the food industry.

We’ve been around the country to 30 states visiting farming operations, manufacturing plants, distribution centers and restaurants, where compliance checks are done using pen and paper clipboards, and teams aren’t incentivized to shift to more standardized, accurate or real-time tools. The way the system is structured, it’s often hard to ensure critical controls are being maintained in the field; as a result, organizations sometimes let their teams slide under the radar and apply a “pencil whip” after the fact.

AC: We were able to scale CoInspect to thousands of locations, but realized a compliance workflow tool that required users to do necessary (but unpopular) tasks couldn’t easily scale to becoming a very large business.

When did CoInspect spur Therma?

MS: There’s a saying, “In order to change the world, you must first accept it.” With Therma, our continuous asset management platform in the cold chain brings to life a more efficient way of checking critical control points along the food supply chain — using sensors to automate these controls — that accepts the limitations of manual processes. As we built Therma, our customers started rapidly buying it, not primarily because of food safety, but because they saw measurable ROI across food waste prevented and energy costs saved. Therma solves for food safety while also advancing the climate tech imperative.

What is the core technology?

AC: The Internet of Things (IoT) revolution has not yet delivered on its promises of automation and data-driven optimization in the multi-billion dollar refrigeration cold chain. Therma is an early leader that leverages a new emerging technology standard in this space.

MS: We use a Low Power, Wide Area networking protocol called LoRa, which allows our sensors to reliably transmit data in environments with dense insulation or siding, including the walls of commercial fridges and freezers. LoRa is perfect for continuously sending a three digit temperature figure. Building on this new protocol, we were able to develop a price-disruptive sensor that can be self-installed in minutes — an ideal solution for monitoring assets across the cold chain.

What historic technologies are you disrupting?

MS: Given the physical constraints in the cold chain environment, few companies have been able to use IOT, so any temperature or humidity monitoring typically happens either manually or through expensive wired sensor solutions. For “edge refrigeration” environments like restaurants and convenience stores, all the way up the cold chain through food distributors and manufacturers, the core technology is often a manual data logger; in some cases, a thermometer hangs on the wall, a person wearing a parka and gloves walks by, reads it, and writes down the measurement on a clipboard every few hours.

More sophisticated technologies include hardwired sensors which are expensive and need to be laid at the time of construction. Given that much of our cold chain infrastructure is several decades old, most of the existing cold storage warehouses predate wireless technologies. Further, large-format warehouses tend to be developed in remote locations where land is cheap and abundant. Unfortunately, these facilities also tend to lack reliable wireless service, another limiting factor for previous IOT devices.

What is the size and scope of the cold chain industry?

MS: The cold chain is a 150 year old infrastructure layer that many of us take for granted since it has always been part of the environment we’ve grown up in. Yet we don’t consider how underdeveloped it is. In the food industry for example, by some estimates, only 1/8 of all perishable food products globally are currently refrigerated. There are huge swaths of the world that lack adequate refrigeration, which leads to immense waste of food, pharmaceuticals, and other valuable products.

The cold chain, as we think of it, consists of several hundred million commercial refrigeration units including fridges, freezers, display cases, holding containers, and warehouses. If you include residential refrigeration units, the total number we’re talking about would be even larger. The goal of these products is to keep ambient air below a certain temperature, which broadly include four categories: 70ºF to 32ºF is considered “above freezing,” 32ºF to 0ºF is “frozen,” 0ºF to -40ºF is “deep frozen,” and -40ºF to -80ºF is “cryo.” Meat products, for example, tend to be kept frozen, ice cream is kept at deep frozen, and certain vaccines may require cryo (including some leading COVID-19 vaccine contenders).

AC: It’s important to know that the cold chain encompasses three critical dimensions: food, pharma, and data. We shouldn’t overlook how significant cloud computing data centers are in the cold chain nor just how much energy is needed to cool the cloud.

What’s the environmental impact of the cold chain?

AC: Project Drawdown had a big influence on us. We’ve learned just how massive an impact the cold chain has on climate change. Recent estimates suggest that the cold chain is responsible for 3-3.5% of greenhouse gas emissions. This shouldn’t be surprising, given that 40% of all food requires refrigeration, and approximately 15% of the electricity consumed worldwide is used for refrigeration.

Cold chain-driven emissions come from three sources: food waste, energy (electricity), and refrigerants themselves. Therma directly addresses Project Drawdown’s reduced food waste and refrigerant management categories, which are, respectfully, the #1 and #4 most impactful climate solutions in a 2˚C temperature rise scenario.

In terms of the financial impact, BCG did a landmark study on food waste in which they found $120 billion worth of food supplies are wasted each year — just due to poor storage and handling!

We didn’t see the significance of Therma’s technology on climate impact when we first got started. It’s important to talk about just how much bigger this climate tech industry is than the traditional solar and wind that people think about. There’s so much incredible talent out there that wants to apply themselves to climate challenges – we wish more folks would join us in working on climate solutions to the cold chain.

How does Therma reduce emissions and costs?

MS: Therma enables real-time monitoring and drives optimization through behavior change, policy change, and rapid-response through two primary drivers. The first driver is reducing product loss. Take an example from the small-box commercial segment in grocery stores, convenience stores, and restaurants. Owners and operators use Therma to ensure that their products are being stored appropriately, and they won’t walk in on Monday to a turned off freezer full of ruined product. In a non-Therma environment, refrigeration is not continuously monitored and food can easily go to waste. We sell to commercial buyers by helping them avoid tens of thousands of dollars in product loss each year. Our monitoring system identifies leaks and predicts maintenance needs before they become a significant problem.

The second driver is energy savings. On the industrial side, energy efficiency is a prominent concern for cold storage warehouses and logistics operators. In enormous warehouses, we can tell businesses when and where they are over- or under-cooling to meet their requirements as well as save energy. We are also identifying hotspots in situations that might ramp up energy consumption. When new shipments come in, for example, the pallets are typically warmer than the ones that have been in the fridge/freezer for a while. Therma can guide the company on where to place pallets to maximize energy efficiency and keep cooling uniform. Therma helps answer questions like, “Do I need to make my warehouses cooler or do I need to change my delivery schedule?”

In the future, Therma will evolve from simply monitoring the environment to eventually being able to control it. The key is to automatically raise or lower the temperature and thereby draw less electricity while also reducing inventory loss or “shrink.” And by making facilities more energy efficient, we also limit refrigerant usage and leakage over time.

AC: Our system consists of a gateway and sensors that measure temperature and humidity. But in the future we could be able to detect refrigerant leaks through “sniffers” – and prevent significant amounts of high-global warming potential gases from being leaked into the atmosphere.

Who else is innovating in this space?

AC: Amazingly, there are fewer folks innovating in the cold chain space than you’d expect given the size of the market and climate impact. Many folks are working on adjacent products like the chemical side of clean refrigerants with much lower global warming potential. But without regulation like those in Europe, it’s going to be hard to force businesses to adopt clean refrigerants — especially since they’re inexpensive and therefore a small cost driver. Other entrepreneurs are working on last-mile refrigeration in underserved markets. There is the possibility for huge food waste reduction from this work, as well as putting money in the pockets of local farmers, fishermen, and other producers in developing economies.

It’s stunning how under-informed the public is about challenges in the cold chain. Now, during COVID-19, there is huge demand on the cold chain to deliver vaccines. There are weekly calls to action from the industry, and an announcement that a simple lack of cold chain storage could leave 3b people without access to a vaccine.

To learn more about Therma, check out their website and be sure to tune in to Point 01, Aaron’s podcast with the 0.01% of innovators who will shape our fight against climate change. Therma is hiring! Check out AngelList for open engineering, sales, and operations roles.

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