Latest / The Refrigeration Mentor Podcast / Episode 241. Transitioning to CO2 Refrigeration in Supermarkets with John Scott & Marc Feeney

Transcript

Episode 241. Transitioning to CO2 Refrigeration in Supermarkets with John Scott & Marc Feeney · The Refrigeration Mentor Podcast

• 0:00
  trevor: Today I'm gonna have a great conversation with John Scott and Mark Feeney from Carter Thermal Industries group. I'm super excited to get into this conversation because I have a lot of friends over in the UK and they're doing a great job and we're going to get into CO2, get into refrigeration business, get into the way the industry's going for them, , over the pond. And I'm super excited about this conversation. Welcome to the refrigeration mentor podcast guys. very
• 0:01
  Speaker 3: much indeed.
• 0:02
  trevor: Thank you for having us Trevor. Awesome. John, why don't you do a quick introduction about yourself?
• 0:03
  John: Yeah. Well, I must admit, first of all, I'm, I'm, I'm not an engineer. So most of the listeners will know more about engineering than me. So if I, if I come across as knowing nothing, that's, that's a reason.
• 0:04
  Uh, I did a degree in business studies. Uh, I then trained as a chartered accountant and at the age of about 24, 25, I joined the family business. So Carter's was founded by my grandfather in 1945. , and I joined in 1989 I think from memory. Uh, i've been run various companies in the group. I've been the group financial director I've been in charge of Carter Synergy The manufacturing companies are in the group, uh, and now I'm Group Chairman, I've got a fantastic team under me.
• 0:05
  We employ about 700 people at the moment. Uh, we turn over in US terms $175 million. And 70% of that is really what we call supermarket refrigeration. But, but grocery store refrigeration, probably about 70% of what, of what we do. And within that we do, we do manufacture cases.
• 0:06
  Uh, we turn over about, about $30 million in that we do contracting. So. System design installation commissioning. So we turn over all 60, 60 million in that. And we do service and maintenance. So we have 300 engineers out in the road, all of which are trained in CO2. So I suppose we, we build the equipment, we put it, we put it in.
• 0:07
  Uh, but we also maintain it. So, yeah.
• 0:08
  trevor: I love that. And so that's it. Like. You're a third generation, you know what I mean? This is one of the things I see in the industry. I'm first gen. I, I locked in to get in the refrigeration to where I'm at today to speak with, with professionals, just like yourself. But, you know, continue to see this.
• 0:09
  It's like, it's generational, you know, so you're getting the kids in where we need to, and we'll talk about it today. How do we get people outside the industry like myself to get in there? So that's an amazing story. And I love the, the growth. Seeing that you're continuing to expand, you get that business mindset, but still staying in the refrigeration industry.
• 0:10
  I love that, John, Mark, why don't you dive in a little bit about you and your role at Carter?
• 0:11
  Speaker 3: Yep. So I am the international account slash overseas business development manager. I'm principally concerned with the North American market. Uh, I started out doing PPMs. Uh, and then I was kind of back to front. I started doing PPMs, then it was case cleans.
• 0:12
  Ordinarily, we'd go the other way around, but for me, that's the way it was. I had a little bit of knowledge, so I could pick up a Uh, fan motor change here or there, basic electrical fixes. Uh, I did that, swapped around, and then I came back. I'm one of these generational refrigeration techs that you speak of.
• 0:13
  My father is the service director here at Carters. I've got three brothers who work here as well as myself, all in different parts of the industry. So I've got a brother working in projects. I've got a brother working in mechanical electrical. I've got another brother who's training to be commissioning engineer, we would call them a startup tech
• 0:14
  trevor: for our
• 0:15
  Speaker 3: North American friends.
• 0:16
  Uh, I then moved on, became a fully fledged service tech. Uh, I then became a project manager who was also responsible for system design. So I've been designing CO2 systems for, I did that for maybe about two years under an incredible team up in Glasgow, Scotland. Uh, I then moved down to London to pick up project management down there because there was a lot of work.
• 0:17
  Uh, and then I was seconded onto the North American front to help out with cabinet sales there. I'm on my, it was a one year secondment and I'm on my third year of that secondment, so here we are, we must be doing something right.
• 0:18
  John: Clear answer, Trevor, to your question is how do we get more people into the industry is we need to procreate a bit more, to be honest.
• 0:19
  Yeah,
• 0:20
  trevor: that's the same here in Canada.
• 0:21
  Speaker 3: I love
• 0:22
  trevor: it. Uh, so that's an interesting, you know, I love that mark, you know, in the field. Now you've worked your way through and now you're up into the office and you're in a heavy role now, international role, which I love that. And this is what I talk about with technician all the time.
• 0:23
  Honestly, supermarket is a young man's game, you know, for, for me, and I'm trying to teach them how to grow throughout the industry. Yeah. And because the best salespeople in refrigeration grocery refrigeration is technicians who evolved into those sales role and every day Your engineers are out there selling themselves, but a lot of them don't think they're salespeople, you know, i'm not a sales guy I'm not but every maintenance every service call that is selling for the business and I try to teach them the evolution of Your supermarket a career, you know, you start out in a field, you work your way up, getting an office service director or manager, whatever operation.
• 0:24
  And there's such, there's so many amazing roles, uh, in this industry, just like your role now international. So you're coming, you're going to different countries and you're talking to new people, networking around the world, which is amazing. And this is the opportunity we have in the supermarket industry and refrigeration versus other trades out there.
• 0:25
  You know, other trades don't have the opportunity like this.
• 0:26
  Speaker 3: I could not agree more. There's fantastic opportunity for upward mobility. I, so that was only 10 years ago that I made a start in the industry and here I am, I've been in four different positions and they, they, they happen very quickly. It doesn't take an awful lot if you, if you can stand out from the crowd and make it known that you want to progress, then I believe that progression is there.
• 0:27
  And even more so now, because as you know, we've got a diminishing wave of force. An agent labor force, we need new blood and they should understand that that those opportunities are there.
• 0:28
  trevor: And it's super exciting too, because there's so much cool technology change and advancement compared to when I started 20 years ago.
• 0:29
  You know, we are advancing real fast and there's, and I think it's more technical technology advancement, you know, now we can use our cell phones on refrigeration system. Now we can get out our laptops and look at stuff, which is cool for me anyway, because I always liked playing video games when I'm a kid.
• 0:30
  Sometimes working on the CO2 system is like playing, playing a game. You know what I mean? Making sure that product is running properly.
• 0:31
  Speaker 3: You recall your first set of digital gauges and the laugh you got off of that, when you could pull it up on your, on your laptop screen and see what your superheat was without even needing to be in the building, that was.
• 0:32
  A fantastic innovation. Yeah, I totally agree. There's the industry is changing. The mindset of our engineers is changing So it's up to us as an industry to change and adapt for that
• 0:33
  trevor: So let's get back to it co2 wasn't something. , That was Is new to your business now in the Carter industry, but, but John, let's talk about when this first started.
• 0:34
  CO2 is a big thing globally. Now it's continuing to ramp up here in North America, but let's talk about maybe 15 years ago. You know, when CO2 wasn't that prevalent in your business, what was the talk about back then? You know what I mean? Because you're, you're probably your big customers were on those HFC systems.
• 0:35
  And there's a lot of was, I believe a lot of regulation push to say, listen, we've got to go to CO2. Let's talk about that a little bit.
• 0:36
  John: Yeah, I'm not sure if it was so much regulation changing. I think it was, it was consumers
• 0:37
  trevor: and I
• 0:38
  John: think the degree of ethics as well, I would, I would like to think. So, uh, early 2000s, a lot of the people like Dreampeace, a lot of organizations started to target in on, on, on energy usage and, uh, and global warming.
• 0:39
  And they started to target the supermarkets. And obviously refrigeration is, is a huge amount of, uh, the national grid, uh, the electricity supply, and they targeted in that. Obviously, CFCs were in the past, but it was realized, well, HFCs are a lot better, but they're, they're not the end solution. And the likes of Greenpeace used to regularly, every year, they would rank all the supermarkets as to who, who, who was the greenest.
• 0:40
  And so, you know, as well as organic food and how they look after people, it was also how, how are they doing refrigeration wise? And, uh, I think there was an early acknowledgement that the industry as a whole needed to change towards natural. So whether that is, it is, it's more charged hydrocarbon or whether that was, was CO2.
• 0:41
  So all the supermarkets started to, to look at that and wanted to see themselves going up those rankings. They didn't want to be seen to be the people holding back because, okay, there might be 10, there might be 20 percent of consumers who would change their buying habits. We say, actually, I prefer to, I mean, my wife buys, uh, free range chickens.
• 0:42
  She doesn't like to think this has come from a factory. She likes to think there's chickens running around. And the likes of her would think, actually, I want to shop somewhere, which isn't hurting the planet at the same time. So I don't know whether it's 10%, whether it's 20%, but there was certainly a group of consumers And the supermarkets have sort of latched on to that, well actually, if we don't go green, we risk losing those, and we do, we've got the advantage of going, of doing that.
• 0:43
  And I also like to think, in the boardrooms, you know, and quite a few of the directors of the major supermarkets now, I think there was a degree of ethics as well, thinking actually this, this is the right thing to do. You know, global warming is a fact, and we should change. So I think the change really happened from those two groups.
• 0:44
  And I think now it's more driven by legislation, but I think the legislation actually started because global warming is a, is a fact. It is a risk to all of mankind. It's a risk to our future and what can we do about it? I think in fairness to the supermarket, they, they made that jump. I can remember whether it's 14 years ago, 12 years ago, Tesco is one of our major customers in the uk and I, I like to see my customers went to see them.
• 0:45
  I had my sales director with me and and the, the guy there said, oh, John, what do you think about CO2? And I said, well, I think the, the jury's out really, isn't it? You know, lot an advantage, lot of negatives and. He looked at me quizzically and he said, you do realize we've just put out a tender and every single main store going forward is CO2, don't you?
• 0:46
  So, uh, on the basis of that, we did not have a choice of business. We had to change the CO2. We will not have a business left if we, if we hadn't changed. One company in the UK went the other way. So Waitrose decided they would go to, uh, integral cases. Uh, with hydrocarbon, propylene we use, but propane, effectively propane, very small factory sealed units with either a water cooled fan or, or, or ambient air cooled on, on the cases.
• 0:47
  So those are the two solutions and really, I don't know, 90 percent of what we do now would be, would, would, would, would be natural when it comes to the service and we maintain. There are about 1500 stores, I think, across the UK. Uh, we're probably 50 50 now on CO2 ranks versus HFC ranks.
• 0:48
  trevor: Wow. Wow. And you said you weren't tactical.
• 0:49
  Look at you popping out all those technical terms, bud. . .
• 0:50
  John: I've got my neck say to be honest. A boy.
• 0:51
  Speaker 3: A boy. Oh yeah. But just, just to pick up on that, Trevor, if I could, that stands in pretty stark contrast from what I see in North America, whereas I don't, I think the attitudes are somewhat different. For better or for worse.
• 0:52
  That's just the way it is. I believe it is more legislation led. Obviously now we're gonna see EPA snap, snap 26 coming through, into, into, uh, and well being stipulated as of the 1st of January, 2025 for self-contained units 2027 for rack systems with, you know, a one 50 GWP limit as. It's setting the goalposts and it's setting them pretty tight.
• 0:53
  There's, I'm not aware of a lot that you can do under 150 GWP other than CO2 and 1270, whichever way you want to go in the hydrocarbon realm. If we see one of these magic A2Ls that I keep hearing whispers about, then great, we'll work with that. Transcritical CO2 specifically, it's a, it's a fantastic solution.
• 0:54
  It's not a silver bullet. It's not applicable absolutely everywhere. I mean, we can put in parallel compression, ejectors, whatever it might be, you're still going to struggle in those warmer states. And, you know, anywhere near the equator, you might run into difficulty even with. Like I say, ejectors, parallel compression, adiabatics, all you need is for one of them to fail, and we might be looking at a stock loss, which we never want, so we will always endorse the correct solution for the customer's needs.
• 0:55
  trevor: But
• 0:56
  John: I think that is changing Trevor, that is changing over time, obviously CO2 started off in the Nordic nations, it's come south, it's ideal for the UK, we think on the stores that we maintain, we're probably going transcritical. A hundred to 150 hours per annum. So it's very, very little . But then you got Southern Europe and now it's transradial.
• 0:57
  CO2 is is standard with, with, with Woolworths in, uh, in Australia. Yeah. So they've got a hundred racks over there, CO2 racks. So that, that, that is changing. The technology is developing and I think it is a warm, hot weather solution as well as a, a cold weather like the uk.
• 0:58
  trevor: Totally agree with you, John and Mark, because the thing is, is that the technology is advancing and now we're talking about this right now, where we're running, there's still difficulties running in those warm, warm climates.
• 0:59
  But even with HFC systems, they run into issues in those warm climates as well, right? Because we don't pass time. Yeah, the temperature rises up. That's hard on the condenser. And if it wasn't designed, you know, with a little extra and then it gets plugged up a little bit, you still run into these issues.
• 1:00
  Components contactors fail when it's 45 degrees out more than when it's in Canada here when it's minus 20 all the time, well, actually the weather's pretty good here in Canada, but, um, but that's the thing as technology advances, like you said, parallel compression, ejectors, adiabatic cool. They didn't use that 20, 25 years ago on CO2 transcritical, you know what I mean?
• 1:01
  And so. I know for sure the advancement is going to continue to happen to make it easier on customers because it is a strain right now going from a standard synthetic, especially here in North America, we have maybe 2000 Canada really did the push back in the mid 90s, early 2000s for CO2, just like the Nordic countries, but we're a small country.
• 1:02
  You know what I mean? So it wasn't like a big rollout like what's going to happen in the rest of north america Uh going forward all the major chains that they're going naturals or co2 or something That is going to be better for the environment So we're going to see that happening very quickly here versus before and I like what you brought up mark is that the regulations, you know, a lot of people I talk with Owners, they don't they're not really involved in all these regulations refrigerant changes You Back in 2014 is when I really started learning when I worked for a manufacturer that, okay, 404 is going to be delisted and deregulated here in North, in Canada.
• 1:03
  And in 2016, there was no 404, but there are still people that don't know that 404 is not, is gone. You know what I mean? Cause they just go and they get the service replacement and stuff like that. And their new systems don't have it. And it's like 448, 449 or whatever it is, but this is a real thing. You know what I mean?
• 1:04
  Speaker 3: I think you've hit the nail on the head, as far as my point goes, because we are seeing a reluctance toward the adoption of natural refrigerants, but I can understand why. In the US in particular, you've got different attitudes left and right across the board. But in the warmer states such as Texas where we've got a prominent customer and when I speak to prospective customers, they're asking me, do we really need to do this?
• 1:05
  And I'm saying, well, actually, yes, if you were to ask me last year, I would have said no, but now you are legally obligated going forward to be looking at these solutions. We have, I think we made our first CO2 case in 2004. So we have, we have 20 years of experience doing this. We've experienced all the bumps in the road.
• 1:06
  Let us help you look over the pond. And, and, and take some advice, not that it's necessarily required, but why suffers through the same things when we could just let you know ahead of time.
• 1:07
  trevor: And that's the big thing too, is like, uh, deal with people all around, around the world and Europe, um, UK, there's lots of experience there.
• 1:08
  Like even here, like even in Canada, it's the first system. It's over 20 years ago, CO2, you know what I mean? So CO2 is not new. It's just now it has to be done. You know, we're moving forward. It's going this direction. Let's go back. So, uh, John back to 12 years ago when you had to put the first system in, uh, your customers is looking for, what were some of the things that you guys were worried about at first, but really overcame as the experience of installing, selling, servicing the CO2 systems.
• 1:09
  John: Well, I can remember sitting there, standing next to the first CO2 transmittal pack that we got, that's operating at, uh, what, 80 bar, I called it, but whatever that is, 1100 PSI, something like that. I think, gosh, do I really want to stand in this plant room? Uh, you know, as a group, every single board meeting starts with, with health and safety.
• 1:10
  And, uh, you know, I'm, I'm, I'm 61 now. I've got a few years left, but not many. I don't want to be on the deathbed thinking I've made a few more million than I would have done, but a couple of people died as a result. You know, that, you know, life is too short. And I would say the biggest headache was, well, what about these high pressures?
• 1:11
  Is it safe? What's going to happen accident wise? And that is still my biggest fear. And the reality is, you know, we have somewhere like 300 engineers out on the road. We've probably, we maintain, I think, 1, 500, is it, uh, CO2 racks at the moment. We've installed probably the same number. I've had one injury, which might be pressure related, but to a young apprentice, he connected his hose correctly and it hit him in the eye.
• 1:12
  And that is the only, in all honesty, the only injury that we've had. So that change, I think, looking back, was far, far easier. Then we, then we, then we fit it with them. And I think not enough credit is given to the industry, us or the company, but most of all to the engineers who, who made that change, the change was not as bad as everyone thought.
• 1:13
  We've got a fantastic training facility here, more than happy to share it with you guys from North America, invite you to come over, we're happy to put on seminars, etc. But I spoke to my training manager, you know, what was the training? The two day training course that we put our engineers on. And throughout that course, he just said, look, you've got to remember, this is the same system as an agency.
• 1:14
  You've got a couple of components, different, you know, you've got a bypass valve, etc, but 95 percent of this is the same, you're still delivering liquid to the, to the evaporator, and that is still the basis of the system. So it is not rocket. It is not rocket science. I think an analogy I use if you look at aircraft engines, what we're talking about here is moving from the 1930s from a normally aspirated engine to a supercharged one, which operates at a bit of high pressure.
• 1:15
  We're not talking about complete new technology. We're not talking about turning, going from a propeller to jet engine. It is the same technology. And that change was far, far easier than we thought. I also spoke to my commissioning engineer. I said, look, how did you get a call? He said, no, John, I just knew how HFCs worked.
• 1:16
  My dad had done CO2 stores a couple of times. Again, keeping in the family seems to be a theme here. And I had a fantastic boss. The wrap manufacturers really, really wanted to help us. A lot of support. And we just went on and did it. So I think this journey, this, this fear, if I can give one message more than any other, this fear, which I've, I've seen to an extent in North America, the reality was you don't need to fear this change.
• 1:17
  It's a lot, lot easier than you think it would, should
• 1:18
  Speaker 3: be.
• 1:19
  trevor: Yeah.
• 1:20
  Speaker 3: I'm pleased to say, none of us were particularly nervous standing next to a nitrogen bottle. What's the standing pressure of a nitrogen bottle? Around 200 bar? It's part of the course, you know, it's just with anything new that is going to be a reluctance to adopt.
• 1:21
  But that's why we're here. That's why we're having this conversation. One of
• 1:22
  trevor: the things though, is that that is a bit different is where you are in the UK, where I'm at in Canada, the temperatures are different, you know, and then when we start getting closer to the equator, as we talked about earlier, there's more difficulties.
• 1:23
  And I see customers here in North America running into a lot of issues for many reasons, getting into the warmer. If B not having the skilled technicians or engineers right now, working on the equipment, losing a lot of charge. And I know this happened around the world as well, but in the Nordic countries and in Canada, we were in sub critical more time than transcritical, right?
• 1:24
  You said 140 hours. I know I talked to some technicians this year in Canada, and it was like less than same as it less than 200 hours in transcritical. And they probably didn't have to go into transcritical. You know what I mean? Like with the new technologies that have, but what are some of your thoughts on some of those customers right now that are struggling in around the equator?
• 1:25
  Cause it's not only in North America, I've talked about people in Australia that struggle with it, depending on the customer, depending on who they have servicing there. So, uh, you know, so what are some of your thoughts on that for customers right now that are like, man, I'm, I'm doing these changes, but it's costing me a lot because we're losing all the gas.
• 1:26
  We don't have skilled technicians. What are some of your thoughts on that mark? I would
• 1:27
  John: say first of all, there's no reason to lose all your gas, you know, I've obviously left gas regulations. We have to, we have to keep a very, very detailed records and, uh, supermarkets within the UK average between eight and probably 14 percent, uh, gas loss per annum.
• 1:28
  And I asked around the industry, what's the thing about CO2? The thing was CO2 is higher, uh, maybe double, But when I checked with my engineers yesterday, we, we looked at a few hundred stores that we looked at, we looked at our gas uses between six months from March to August, we then annualized that we're actually running at a 17 percent loss.
• 1:29
  On CO2. I think what CO2 has done is, is you can't get away with a small hole in the system, and I think CO2 has made the quality of installation that much better, that much better.
• 1:30
  Speaker 3: What I would say, Trevor, to your point is, is adopt the European method. We also started at 45 bar system pressure design on the suction, 60 bar on the high side.
• 1:31
  We don't do that anymore. We're very much 80, 60, 80, oh sorry, I said high side, I should say intermediate side, of course, the intermediate side of around 80, 60 on the low side minimum. If we in these warmer ambient climates spec both the case, the system, everything spec at 80 bar minimum, that will help you prevent your PRVs lifting because you're going to have more time, you're going to be able to sustain higher temperatures.
• 1:32
  Okay, we do have that exponential curve CO2, we all know the graph. We know how it behaves when you, when heat gets involved, especially in those higher ambient areas. But if we intelligently design these systems, the cases, every single component in the system, we can mitigate that and get someone who can deal with it out there in time.
• 1:33
  John: So yes, that standard within, within the UK at the moment, in American money, it's, it's, uh, You're talking about suction 870 PSI. Something like that is standard. You're talking about the discharge up to 1740 PSI. You're seeing some higher discharge as well, 185 PSI, and you're talking liquid up to 1100, 1200.
• 1:34
  Just use the standards which work. Don't try to reinvent the wheel. There's a lot of knowledge out there. These systems work. The rack manufacturers now know what they're doing. I can remember, you know, 12 years ago, the racks shook themselves to bits. They didn't have the correct bracketing. They didn't have the correct bracketing.
• 1:35
  Uh, some of them, they've got the whole hydraulics of it wrong and you've got hydraulic surges and they're running the compressors at certain speeds and they were literally just, just knocking themselves to bed. Yeah, the knowledge that the wrap manufacturers have got, the likes of Teco, Green and Co, you know, two that we've got close relationships, but there are other fantastic companies out there.
• 1:36
  They know what they're doing now. You don't have to go through that learning curve. Speak to us, you know, one of our engineers is, is ex, uh. a supermarket. His job was to specify the plant. He now works for us on our plant site. Speak, don't reinvent, bend the wheel. The knowledge is there. We're more than happy to share that.
• 1:37
  You know,
• 1:38
  trevor: and I think, I think that's the thing. Like I talk with manufacturers that work with CO2 all around the world. They're at the level where they, they understand that's, that's not a problem at all. I don't, I don't think so. All the manufacturers that I deal in Canada, us, Europe, Australia, we, they gotta down pat.
• 1:39
  The, the thing is, is now the customer's cost, like you just said, uh, 60 buyer, low side, you know, eight 70, low side where. Most systems, even out here in Canada, I don't know many that are 80 or 60 by our low side, still all, uh, 45 by our low side. Right? Because we don't run into that issue of pop offs do happen, you know, or releases do happen, but it's very, , it's a lot smaller than we see around the, the equator, like these warmer, warmer climates, because in Canada, a lot of the systems will have a backup.
• 1:40
  auxiliary unit will turn on. So you get an extra, you get more time before it relieves, you know, it all depends on the design, but what about the customers? All of a sudden now, instead of doing a 45 bar, it goes to the 60 bar. So you guys, cause you went through this, you were doing 45 and you went to 60.
• 1:41
  The cost of this stuff does go up. What is that cost barrier? Cause I don't know if all your cases now are six are all your cases. You make 60 bar for actually
• 1:42
  Speaker 3: going to 90 bar Trevor. We've decided to go to 90. It was the conversation with some prominent retailers in the U. S. was, okay, how we've had this conversation.
• 1:43
  How can we mitigate stock loss in the store? How can we mitigate? PRVs lifting said, okay, we need to design the system up to a higher standard, a higher spec. It was 80 and then it was 90 and we're now coming back to 80, but we've already made the design changes. We've implemented those. So we are actually going to supply cabinets as standard to 90 bar.
• 1:44
  John: Okay. That's good. And it's very easy cabinet wide. It's very easy to make that change. You're not talking about the huge changing componentry.
• 1:45
  trevor: No, but cost now there's a big change in cost though. So what do you see? What kind of percentage are you seeing going from a 45 bar to a 60 bar or a 90 bar case?
• 1:46
  Initially, you were talking about a 20 percent premium going for the CO2. That, that sort of level, I think now it's probably gone the other way because CO2 is the standard out there with it within Europe and you're probably almost up to a stage, it's either cost neutral or it's, it's cheaper because of volumes.
• 1:47
  John: And that was that you've got, don't get me wrong, you've got more copper, you know, you've got more raw material in there. So in theory, the only real price change is that you've got, you've got more material in there. So it should be material. So that is our experience. It was about a 20 percent premium. Now, I think it's very, very, I don't think there is a premium.
• 1:48
  I think it's a mature market price. Ditto on service. So on service, when we started, we were put a 20 percent premium on a, on a CO2 store. Now, there is, there is no premium at all. In fact, it's gone the other. So if we would install a, uh, replace HFC on a, on existing store with, with CO2, we would do a discount on the service price for year one, two, and
• 1:49
  Speaker 3: three.
• 1:50
  trevor: That makes sense.
• 1:51
  Speaker 3: To answer your question, Trevor, in regards to the cabinets, you're probably talking about an eight, 9% price increase to go from fortified bar to 90 bar. There's not an awful lot that actually has to change. We spec K 65 is a in our installations and in our cases, so that is more than capable of handling pressures up to 120 bar.
• 1:52
  Uh, in terms of componentry changes, you're looking at a battle change. You're looking at an evaporator change. If it's a dual temperature cases, you need to make an allowance for an EEPR. Uh, on top, which is actually somewhat difficult to find or struggle to to locate a good EPR, but we're essentially just using a valve that will operate as an EPR, but to get that at 90 bars standing in the U.
• 1:53
  S. market is difficult. That's not something that's. Prevalent in the marketplace yet, because we're only just adopting this technology and setting this new standard.
• 1:54
  trevor: Yeah. And I think that's the thing as we continue to evolve, we'll see the price, it starts high, but when you get more volume, the prices come down and more competition between different manufacturers, which is totally fine, but it's important that the customers understand this because right now they're going to see a bit larger price.
• 1:55
  Cost for a CO2 system, if versus the HFC or even an H well, but an H well, they're still expensive because the leak mitigation, we won't get into that today, but, the cost of what they used to pay.
• 1:56
  Speaker 3: Yeah. I would say, I would say your average price variance in CapEx from HFC system, the transcritical CO2 system, you're probably talking about 20%, but your future proof, your system, your future, future proof, your store, um, as more and more people come on.
• 1:57
  That's almost like, like John was saying, with our figures, that's almost what we expect to find. So it is entirely demystified and you are seeing a return on your investment. It's probably down the line and I, I wouldn't say to any of our North American partners that you're gonna see a return on your investment anytime soon, that eventually you will.
• 1:58
  I mean, look at the price of CO2 to buy. I'm not entirely sure what the buying rate is at the moment in the us, but we can get it for two pounds a kilo at one point. So that's two great British pounds, Nel. At one point, 404A was 50 pounds a kilo.
• 1:59
  trevor: So,
• 2:00
  Speaker 3: these things do come back as the technology advances.
• 2:01
  trevor: And I agree with that.
• 2:02
  John: Whole life cost, Trevor, I think they're comparable. You're not talking about double the whole life cost. There might be a premium, there might be a 10 percent premium. Premium, but certainly as the market matures and it will mature very very quickly I think this fear that people have but I think the ethics comes that comes in as well Doesn't it the ethics actually this is the right thing to do and sometimes to do the right thing can cost you personally It can cost you in the pocket as well.
• 2:03
  It is the right thing to do. And it is future proofing. Why go to stopgap now, which you're going to have to replace? Why not just say, this is the right thing to do. This is where, and let's concentrate on how do we do this change and how do we make it economic? Rather than trying to resist the change.
• 2:04
  trevor: And, and there's, there's, I talk with so many people that have lots of different opinions on like increasing the, the pressure rating on the systems, cost wise capex.
• 2:05
  And to me, it doesn't matter. It's what we do for the future. Right. Just like you said, like, is this better for the environment? Our, our children, you know, 20 years down the road, 40, 50, a hundred years, 200 years down the road, and we, we gotta, we gotta evolve, right. Um, and with, uh, the, the high GWP limits, things like that, we're going to continue to evolve.
• 2:06
  And I think increasing or not increasing like the lower side, I, I think it's just a skill level that we need to get to. Um, we get higher skill level technicians and engineers out there. We will have less leaks. Um, for sure. One thing though, I had a conversation last week. I had, Uh, someone that was in my CO2 program said they called me up and they said, like, Trevor, we are out of high pressure, copper.
• 2:07
  They can't find any in, uh, their state or is the states around them. They couldn't get any XHP 120 or one three, I can't remember, or K65. So that's an issue that we're running into in North America right now. So now if you have a whole low side, At 80 or 90 bar and you can't get the pipe, then what do you do?
• 2:08
  I, and I know down the road as we get more and more, but there's so many systems going in right now here in North America is that they don't have the actual, uh, material to install these higher pressure systems. And this is, this is a call that I got last week.
• 2:09
  John: And Trevor, I know it's a different marketplace and we're saying, yeah, just take that technology.
• 2:10
  It is a different marketplace. There's different, different dynamics. Some. There's a fantastic engineers over there as well. Yeah, oh yeah. I don't know why we get this market imperfections. There's no reason. You know, I know a few years ago, post, post COVID, the whole supply chain seemed to drive for a while.
• 2:11
  I know we're talking about R404. Was it 2018? The price went up within two months. It went up eightfold and there was no reason for it at all. They said, well, there's new limits coming in. Well, actually the price increased, you know, over here we can bank if you've got an old system and take it out, you bank the gas and then you can use that gas again.
• 2:12
  So that, that was more than enough because we knew it was being taken out. The old gas was more than that. And suddenly this price actually around, I don't understand market perfections, I imagine someone's making a lot of money somewhere.
• 2:13
  trevor: And all these things are going to get worked out. I we're, we're going naturals around the world.
• 2:14
  It's, and which is, which is great. I enjoy it, but we need to make sure the engineers are safe. The customers understand, you know, what's going on. What needs to be done because I think they need to be involved more as well. I personally believe the customers need to understand the contractors that they have there.
• 2:15
  Are they ready? What stores are you going to be going to? Do you start with stores? You get people to come in that understand the system to get a start and train the next people that are in that town. So there's a lot of dynamics right now. This is what you guys went through 12, 12 years ago. You know what I mean?
• 2:16
  And you're up 15 years ago, whatever, whatever the case is. And even here in Canada, we continue to evolve. I do more and more trainings with contractors that, okay, we've got three new stores. We've got two new stores. We've got five new stores. And it's like anything, same as you, when you guys started out, you probably had three or four tech, you got 300 engineers, but you had three or four that knew it.
• 2:17
  But then you had the extra 150 that were like on the edge of it. And then the other 50 that didn't really, you know, want to go near it as we continue to evolve here, as we start to level up the skill level, it's going to get easier and easier for everyone. What are your thoughts on the conversations you do have with your customers here in North America versus, you know, the 12 years ago conversations?
• 2:18
  Or do you feel like it's the 12 years ago conversation you're having again, John or Mark, or it's a different,
• 2:19
  Speaker 3: I would say no, because To your point, we were all figuring it out. We were, okay, this is what we're doing. Let's Find an intelligent path to a good solution. I've worked with incredibly diligent engineers, our customers over at Target, at H E B, at other places.
• 2:20
  They really do know their stuff. They know their stuff and they care about not only the contractors that are going out to work, but ultimately their customers, because we need to keep everybody safe. That's our first, could be first, second, and third priority, that you keep all the guests safe in the store, as well as the contractors that are working on this equipment.
• 2:21
  So a lot of time, a lot of effort, and a lot of money has gone in To make sure that what we're doing is responsible, safe, and ultimately effective. We're looking for good coefficients of performance, that's never going to change. We're engineers, that's what we do. But with higher pressures, you know, there is, okay, it's not quite a nitrogen bottle pressure, but there is a, there's a care that we must impart on, on people coming in the store.
• 2:22
  We need to be looking after people and that has been taken extremely seriously by everyone that I speak to over in North America.
• 2:23
  trevor: Yeah. And that's a big thing. I think even here, all the contractors I work with, it's all about, it's about safety, right? And, that is important, but that's the same thing with when I started 20 years ago, safety was one of the things that the guys I work with most important.
• 2:24
  I think driving is probably the most dangerous thing in refrigeration at this point. Driving because you're on, we're on the road so much versus what's going on in the system. We're talking about the system, but driving is probably, we get more Incidents with driving, then actually working on refrigeration equipment.
• 2:25
  John: That would be the number one risk in our business, is people driving to the side. You know, we, you know, we, we've had a fatality and I can still, you know, when the court case comes up, it wasn't one of our guys and he was totally blameless in it and the court and the police admitted he was totally not his fault, but yeah, I took it upon myself to, to read the court proceedings and just, okay, from the family's point of view, what's that like any fatality?
• 2:26
  And we're lucky in the UK within the construction industry, uh, the fatality rate is pretty low compared to North America, but, but it's still too high. So. I would change tomorrow my attitude about CO2, my attitude about naturals, if it meant that people's lives were being put at risk. And I'm always wary.
• 2:27
  And okay, there are higher pressure systems, and you should never just take it for granted. And that fear, I think, is a good thing. But, you know, going back to the supermarkets, the technology is there. Come and speak. If there's anything, I think, what I presented when we moved to the States, we did it seven years ago.
• 2:28
  Before that. I presented at StorePoint, I think, eight years ago, and I said the move to CO2 is a natural revision we think will become mainstream within three years. And the reality is we are now at the stage I thought we would be five years ago. So there's a degree of frustration there because I think it is the right thing to do.
• 2:29
  And a lot of this fear, if I could say, you know, I sleep well at night, Trevor. You know, I know my engineers are safe. I know I won't wake up on a, we do have occasionally hot days. You know, it does get into the mid thirties sometime. I know that 99. 5 percent of my customer assets will have worked overnight.
• 2:30
  They wouldn't, they wouldn't have turned off. Yeah. It's a, it's a hard job to get, keep them working sometimes, but I know my, my customers will not lose much stock. Our pe, our people, our people are safe.
• 2:31
  trevor: I don't think the biggest thing is I've been training so many people, uh, John, honestly, on CO2, and it is not the, the high temperatures, that's the, the biggest issue for a system.
• 2:32
  It's the really cold temperatures. Honestly,
• 2:33
  John: it's the cold temperatures, very mild. Climate here. We don't we it doesn't go you guys are just like this
• 2:34
  trevor: you float through we're here man We get down to minus 40. That's when you run into a lot of issues with the co2 system or an hfc system
• 2:35
  but but it's good.
• 2:36
  I love that that you guys are very conscious about being safe around any refrigeration system Training is like one of your number one things for your engineers uh, and I love that the the the evolution of your your your company because You know, I love that all these technicians engineers that are coming into your business.
• 2:37
  There's a lot of growth opportunity, you know If you want to stay in the tools you totally can but there's opportunities to get into, you know, service manager roles operation manager roles just like yourself, Mark. And in a short period of time, I really love that you guys are doing that. And, uh, and moving forward, moving the mark with the naturals.
• 2:38
  That that's great to hear.
• 2:39
  Speaker 3: I do feel like we're, we're, we're seeing, you mentioned earlier that the U S they've got a handle on transcritical and that I feel like that is true.
• 2:40
  I feel like you're absolutely correct. It's not magic. We know what it is. It follows the fundamental principles of refrigeration. There's a couple of extra parts. It's about the implementation of this technology. And how do we apply the implementation at such scale that we can take on the North American continent?
• 2:41
  It's no easy task. So yes, we've got great, intelligent people. We're all together. We're talking about the benefits. We're talking about This is how we can advance it, but it will be interesting to see how that plays out when the regulations come into force and it's stipulated that this is what you need to be doing on a building site as of the 1st of January 2027.
• 2:42
  As it stands, we don't have this magic A2L yet. I would love to see it because why not? A2Ls are great. We've seen R32s stand in for R410A with very little difficulty. That adoption was great. It was easy. Hopefully, there's someone that works for a big chemical company that's listening that can They can help push that along because I do feel like that's a massive opportunity for anybody who can get it right.
• 2:43
  But as it stands, transcritical CO2 is the way that we have to go for larger application. So we just want to be there. We're flexible enough that we'll do whatever we can to help. We're not, you know, absolutely it must be transcritical CO2. It's all about how we apply these robust technologies. to end users and ultimately to provide the best experience for the guest in the store.
• 2:44
  John: Yeah, we're doing the two, we're doing the propane cases, the small, the small, small loops. And that's what we started 70 years ago in the States with Target and HEB. We're now at the stage where we're saying, okay, let's convert all our UK specifications over to U. S. specifications, get it all U. L. approved, get all the U.
• 2:45
  A. approvals on it. So that's what we've got through all our test labs at the moment, five test labs. I think all flat out in the North American market at the moment, so come first to JASC, we have got the complete range. So rather than 3. 66 meter case, we've got, we've got, we've got a 12 foot case, we've got an 8 foot case.
• 2:46
  So all the changes are being done at the moment. We're working along with some, you know, brilliant, cool, fantastic company. We worked along for a number of years. Lots of tech are looking to, to come over as well. And just to share our knowledge, even if you don't buy anything off us, just please just, just, just speak to us.
• 2:47
  We're more than happy to share our experience, share our knowledge of what works and what doesn't work. We just, you know, we want the world to be a better place and global warming to, you know, to slow down.
• 2:48
  trevor: Yeah, and that's what I love about refrigeration. Like we care people who are passionate about refrigerant.
• 2:49
  They care. They want to share their knowledge Even even if they're not and i'm seeing that more and more Which I love about co2 is that more people are are opening it up and sharing their experiences about it You know what? I mean where it's it's When I started co2 probably learned about it 10 years ago now Not many people knew about it here.
• 2:50
  So even Not many people were sharing their knowledge unless it was their customers. And as the last 10 years went by, I see more and more manufacturers opening it up. I see more and more contractors opening up and users starting to talk about their stories and, and benefiting the industry. Not only them themselves or bring them just value to their, their internal group.
• 2:51
  You know what I mean? In value to the whole industry. And I think that we need to do more of that as an industry, because we're all, we're all trying to do the same thing, help solve our customers problems. You know what I mean? The actually the world's problems with refrigeration, not only customers, the world's problem, because medicine, food quality, uh, uh, you know, shipping the food, you know, around the world, and that's what we're involved in and I, and I love that you guys care.
• 2:52
  About your customers care about the industry. What are some of your final thoughts? Um for for Co2 for refrigeration. I love this conversation We'll have to do another one again because there's so much we can talk about But what are some of the final thoughts for uh for end users out there? Um that are getting into co2
• 2:53
  John: Speak to the right people don't try to reinvent Specifications now are well known.
• 2:54
  Speak to people who've done, who've done it before. Uh, don't go to people who've built HFCs packs for the last 50 years or whatever and now want to to move in. Learn from those. I mean, take, what, 8, 200 CO2 racks, you know, advanced, you know, one of our competitors. Speak to those who've done it, but don't try to reinvent the specification.
• 2:55
  Learn from previous experience. You know, we, we got it wrong. You know, we had stores where we did have CO2 leak. Father Christmas running out of one store. It wasn't a good look.
• 2:56
  Speaker 3: Those are in the past. That's a whole story. We can maybe come to that next time. Compression fittings, don't go that way. That's it in a nutshell.
• 2:57
  Learn.
• 2:58
  John: Speak to yourself, Trevor. You've got huge knowledge. Speak to us. Speak to our competitors. Learn about it. This journey doesn't have to be painful, but it will be painful if you don't speak to those people who've already done it, and you know what they're talking about. But I would, I mean I asked Tessie, it was like what comments, and one of our customers, did they think when they changed it was right or not, I think the jury was out at that stage.
• 2:59
  You know, there are pluses and minuses and it was probably a bit even balance. I think now this is, no, this is the way it's standard technology. It works. The stores are there to sell product to the customers. Keep the customers safe. Our bills have not shot up. What? Why? Why not do that? Do that, John? Why not feel better when you go to bed at night?
• 3:00
  Speaker 3: I would echo John's sentiments, but I would add to it that we need to invest in people. That's got to be a priority. And that responsibility isn't just the responsibility of manufacturers of service providers. Ultimately, it's the responsibility of the end user in one way or another. So what needs to happen there?
• 3:01
  How do we endorse that? Is it money? Probably. It probably is. It's a multifaceted approach of getting the right people in, keeping people engaged, because I know multiple people that can't handle the hours of this industry, and I do not blame them. It's very hard going. We have a diminishing workforce. You know, the workforce is getting older, the mindset's changed.
• 3:02
  How do we get fresh blood into the industry? You're doing a great job, Trevor, and yourself and your contemporaries. We can assist. We, I think we've got six apprentices at the moment. We try to take on six apprentices every year. That's great. It's a drop in the, it's a drop in the ocean. We need to be doing better.
• 3:03
  We need to bring in intelligent and driven people to, to oversee these systems. We always think things are future proofed in this industry. I'm sure we all thought everything was future proofed when R32 was around. We thought, yeah, that's it, done. What will come out next? And PFAS, we're looking at PFAS very closely thinking, okay, this is a serious issue.
• 3:04
  It's time to expand. We need skilled trades people, but there's, there's many other positions that people could take up in the industry. Something's going to have to give at some point, and I'm sure we can all collectively decide what that's going to be. Well, I'm an accountant. I'm a company director,
• 3:05
  John: company chairman.
• 3:06
  Uh, The business owner, I wish I was a fridge engineer. I think it is a fantastic trade to be in. I think the ability to do the right thing, to make a difference in the store, what you're maintaining, you're, you're putting in, I think it is a fantastic. You've got so much responsibility to, and so much commitment.
• 3:07
  Ability to do the right thing and to do things. It is a fantastic job I would I wish I was an engineer rather than accountant. It's too late for that
• 3:08
  trevor: And the thing is though like you can have such a good career make a a ton of money too Uh when you're young and then just evolve from there, especially if you're smart with your money You can you can I've made so much money on the tools.
• 3:09
  It's just Crazy. Probably more money now than running a training business, you know what I mean?
• 3:10
  Speaker 3: And on top of a turbulent economic climate, we are essentially Recession proof might be a bit strong, but we're certainly recession resistant. Nobody's going to stop going to the supermarket. So it's going to take a serious catastrophe for us to be able to work.
• 3:11
  And even at that, like I was just alluding to, we, we, there's more jobs than we have people. So let's speak to our friends. Okay. Yes, we are a family business and we're proud of that, but I've run out of brothers. So, and we'd like to take it on. Of course we're a very inclusive industry where we're proud of the fact that we've got females doing things for us.
• 3:12
  That's that. That's something that I feel like we need to tackle as an industry as well. It shouldn't be male dominated, but in 2024, let's look at how we can do better there.
• 3:13
  trevor: Yeah. No, I know lots of, lots of females come into my training programs, but there's still a big, there's still a big, uh, Uh, big, what, what's that, that, what's the word I'm looking for, uh, discrimination, you know what I mean, in our industry, like there's still, I don't understand why, like not the contractors, but other technicians that have, and this is not only our industry, I see another skilled trade industry, women coming in and the guys can't, they can't handle it, it seems, and so I'm trying to change that, you know what I mean?
• 3:14
  It is 2024. They, we need them to come in and, and they're so smart. Like there's some of the best that come into my program. So I'm telling you.
• 3:15
  Speaker 3: Yeah, of course. That's something in the culture that needs to shift, not only in refrigeration, but in trades post op. I feel like it's time that way. We make the best use of the best people and they're always welcome to your cars, anybody and everybody.
• 3:16
  trevor: Yeah. And I love that. And that's what I think about our industry. It's going to continue to grow, but we got to help evolve it. I, I still try to, I, I have conversations with so many different people about is how do we get more people into the industry? Into our industry, which is the hardest things. And I don't think we talk outward enough.
• 3:17
  We're having a great conversation here. A lot of people that are listening to our refrigeration professionals, technicians, business owners that are dealing with supermarkets or refrigeration in general. But how do we get the people that are outside our industry? You know what I mean? Is it more commercials on TV, more commercials on YouTube, uh, more people in the schools.
• 3:18
  But I think that's, that's where our roadblock is right now. People outside. It just keeps
• 3:19
  John: food cold. It just keeps food cold. My, my, my other passion Trevor, as I mentioned to you was, uh, I'm a business owner, but, uh, my wife and I also foster children and I'm just aware within the UK, the worst route. The least likely to go to university, the least likely to get a job, the most likely to, uh, to end up in prison are those children who've been, been in care when they were younger.
• 3:20
  And, and, you know, I have an opportunity with the local authorities, the local government that I deal with to say, actually, if you've got any foster children, put them on place in the carters, give them some work experience, we're more than happy. The last foster, the foster lad I've still got at the moment, he went out on a tour, loved it.
• 3:21
  I've yet to persuade him, he's 19 now, I'm yet to persuade him that refrigeration is his future, he will get there hopefully. I just think, talking to schools, people don't know about refrigeration. You know, people don't know about cartons. The reality is that every single person in the United Kingdom would have touched one of our products or benefited from one of the products in the last month.
• 3:22
  Every single person, but no one knows us. And I quite like that, but also I think there's an industry, we're the quiet industry.
• 3:23
  Speaker 3: Yeah, very niche. But I agree to your point, how do we break that? I think John's right, we need to be in schools. Advertising people like yourself, Trevor, you're fighting the good fight.
• 3:24
  You're, you're bringing the limelight to our industry in a lot of ways. So we, we take on and we do what we can.
• 3:25
  trevor: No, I love these conversations. I love the time that you guys spent with, uh, with us here. I really appreciate you taking the time to do that. Uh, any final thoughts for anybody out there in the industry today?
• 3:26
  Speaker 3: Well, we'll be at FMI, as I mentioned in Baltimore. So please come and say hello. We would love to meet everybody. Anybody. To quote yourself, Trevor, let's start a conversation, or let's get a conversation going.
• 3:27
  trevor: Atta boy, alright. Nailed it. There you go. Nailed it. Please come and see us. It'd be great to talk.
• 3:28
  Yeah, we'll catch up in Baltimore for sure. John. Yeah, I was
• 3:29
  John: just saying, don't be fatal. Be sensible, don't take any safety ever for granted when actually this, this change, they're easier to do than you fear it is. That's my experience with 700 employees. It happened better than I thought it would do. I
• 3:30
  trevor: love that.
• 3:31
  I love that, John. John, Mark, thank you so much for taking time at, uh, hanging out with me at the Refrigeration Monitor podcast and we'll catch up next time.
• 3:32
  John: Thank you. for your time.