Tim Figge (00:00): 

So if you think about strawberries as they start aging, you can cut the price on those in half by automatically just changing the price through that digital price tag, it's immediate. That can really cut down on shrink and waste. A big part of a retailer's mindset around sustainability is food waste. 

James Kotecki (00:27): 

This is CES Tech Talk. I'm James Kotecki. CES 2023 is January 5th through 8th in Las Vegas, and we are here to get you hyped and get you smart about the world's most influential tech event today. What's cooler than being cool? Energy efficiency. Thought I was going to say something else there, didn't you? The refrigerated grocery cases that keep our food cold in the store basically make modern life possible, but they take energy to power them and they contribute to global warming. So if there was a better way to keep food cold, that would be better for all of us. Tim Figge is the CEO of Hussmann, a Panasonic company that makes those refrigerated cases, and he joins us now. Tim, take us to CES 2023. When people walk up to the Panasonic booth and they visit the Hussmann section, what are they going to see? 

Tim Figge (01:22): 

Our CES vision is all about how do we create today to enrich tomorrow at Panasonic? So you'll see a little bit of everything around how our products impact society today, but also they're enriching the lives for tomorrow in a sustainable manner. Not only our refrigerants and sustainable refrigerants, but also some technology where we can predict from an analytical perspective, refrigerant leaks to eliminate refrigerants going into the air as well as then also some digital shelf tags that help from a sustainability perspective on removing excess paper and tags, but also help on food sustainability as well. 

James Kotecki (02:05): 

Let's talk about what's actually possible today. What's the current state of the industry when we talk about power and we talk about greenhouse gases and things like this, what's the baseline? 

Tim Figge (02:16): 

A significant percentage of the US energy consumption goes towards the powering of US supermarkets and food retailing. And then of that refrigeration is a significant component of their energy used within a supermarket. And so as we look at refrigeration, there's a lot of different things that we can do to reduce the energy consumption, and that's been always one of our goals at Hussmann, which is always about continuously providing the most customer focused solutions in the food retailing industry. So how do we take energy consumption down through using new technology, introducing new products? And then on top of that, we also are focused on how do we reduce the use of refrigerants that are harmful to the atmosphere? And we look at it from a GWP perspective. 

James Kotecki (03:10): 

And spell that out for folks who aren't familiar with GWP. 

Tim Figge (03:14): 

Oh, thank you. So the GWP is global warming potential. So it really is a metric to say this refrigerant has a high global warming potential so it emits a significant amount of greenhouse warming gases and some of the more natural refrigerants such as CO2 or near natural refrigerant in propane or R290, they have very low global warming potentials. And so we've been moving more and more technology towards low GWP refrigerants to help the environment. 

James Kotecki (03:49): 

Is there a way to quantify the unit of today will do X amount of global warming potential, but very soon we'll be able to do Y? 

Tim Figge (03:57): 

The refrigerant of today, one of the standard refrigerants is roughly around 1500 GWP. An A2L such as propane or R290 is probably closer to a GWP of four or five, whereas CO2 is closer to GWP of one. 

James Kotecki (04:18): 

So sorry, did we go from the thousands to the single digits? Is that really... 

Tim Figge (04:22): 

Yeah, so you can go through from the thousands to the single digits now. 

James Kotecki (04:26): 


Tim Figge (04:27): 

The offset to that though is that in warmer climates, CO2 is not as an efficient refrigerant, so it can operate at a much higher energy consumption rate. So there's new technology that's coming out that we're working on to make sure that we can bring down that energy consumption of that unit during the hot seasons of the year. 

James Kotecki (04:50): 

Another technology that is really important is the connectivity here to be able to monitor all of these systems and make sure they're doing what they're supposed to do. Can you tell me about what you're doing there? 

Tim Figge (05:02): 

One of the investments that we've made at Hussmann is software system called Store Connect. And that Store Connect is enabling us to connect into the refrigeration systems of the store, the HVAC system of the store, monitor compressors. And through that we can watch the energy consumption, we can also get into predictive failure modes and understand when a compressor is going to be going down. And then we can also get into refrigerant leak detection. We can signal a leak in a refrigeration system probably much sooner, significantly sooner than what you can in today's world. So if you think of your home HVAC unit, you don't know that you've lost your refrigerant in that unit until it no longer is cooling. And similar in a supermarket, it's too late, that refrigeration system is no longer working in cooling the products and you've lost a significant amount of the refrigerant in the system. So now under this new technology with the leak detection, we're able to predict that leak and indicate that and be able to go fix it when you have only lost one or two pounds of refrigerant versus hundreds of pounds of refrigerant. 

James Kotecki (06:15): 

When I walk into a supermarket, what's the chance that what I'm interacting with is the latest and greatest and what's the chance that I'm interacting with something that's actually more damaging to the earth and the environment than we would actually want it to be? 

Tim Figge (06:28): 

Yeah. So most of your larger retailers, they tend to remodel their supermarkets anywhere from a seven to a 12 year cycle, where some of your smaller regional retailers that don't quite have that level of capital, they may only remodel their stores every 15 to 20 years. A brand new store is going to be probably the top of the line from an energy efficiency perspective. Go out into small rural America, you're going to find an older store that has old refrigeration equipment that's just not quite as energy efficient as what a new store is today. We recently launched a new refrigeration case about five years ago on the medium temperature side, that reduced the energy consumption by 23% on an open air case. Now if you look at that same case and you put doors on it, you're going to reduce the energy consumption by almost another 70% in total. 

James Kotecki (07:26): 

Do you have to balance out the maximal energy efficiency, global warming efficiency of these things with other consumer psychological perspectives? 

Tim Figge (07:35): 

Yeah, there's definitely some consumer behaviors that come into play, and we work with the retailers on what they're trying to accomplish from their marketing perspective and what fits their store needs and what they're trying to do. Anytime you put a door on a merchandiser, the stores will oftentimes think that they don't want a barrier between the product and the consumer, which a door is. However, there's also studies that show that when you put that door on, consumers are willing to stand in front of that refrigeration case or that merchandiser for a longer period of time, so their dwell time increases, which also then increases the likelihood that they're going to buy more product. They'll stand in front of it because it's much more comfortable to be in that aisle with the closed doors as opposed to a cold aisle that can be anywhere from 10 to 15 degrees warmer once you have doors on the case. 

James Kotecki (08:31): 

How do you typically sell this technology to retailers? Do you emphasize the environmental benefits or the planetary benefits here, or is it really just a bottom line thing like you're going to save on energy costs if you install this stuff? 

Tim Figge (08:45): 

It's a combination of both. We'll look at it from the environmental aspects as well as also the energy aspect and that you will actually save and there is a payback when you put that door on a case. 

James Kotecki (08:57): 

And is there also a consumer element to this where if you create a more energy efficient store, you can then effectively market that as a message to consumers, like the store is saving on energy and you actually have that as a benefit from a marketing perspective? 

Tim Figge (09:11): 

Yeah. What we're seeing is that more and more of the retailers are becoming much more conscious of the consumer behavior and the consumer's focus around energy efficiency and green and ESG. And as that increases, our customers are becoming more and more likely to investigate these energy efficiency ideas in higher level products that we offer. 

James Kotecki (09:37): 

Hussmann won an energy environmental award this year. Congratulations. Can you tell us about that and what you won the award for? 

Tim Figge (09:44): 

In 2021, we partnered with Emerson and Chemours to create this energy efficiency refrigeration solution for the Gem City market in Dayton, Ohio. And Hussmann had assembled the overall refrigeration system, which is made of different components, and it includes some low temperature booster systems from Emerson, as well as using some new low GWP refrigerants from Chemours, the Opteon XP10 refrigerant. And the endeavor really showed the energy efficiency that this new system brought as well as using this new refrigerant and the low charge in it. 

James Kotecki (10:28): 

And was this something that you built on a custom basis for this customer? And does that mean that typically every store solutions need to be customized to a certain degree? 

Tim Figge (10:38): 

So this was designed specifically for this store, however, it's one that can be replicated in a very similar manner. Every supermarket has to have a refrigeration system engineered specifically to that store in that environment of the store. Unfortunately, it's not quite as simple as your own home refrigerator. We have to do a lot of engineering for each of the stores to make sure that we're meeting the needs of that store based on its geographic location, the ambient temperatures, barometric pressures, and all these different factors that go into the location. 

James Kotecki (11:14): 

How long will it take for today's advanced technologies to be in most places and having the kind of energy and environmental savings that we want to see? 

Tim Figge (11:22): 

It's just an estimate, but I would think that it probably before we could get a hundred percent of it converted, it would be 30 years at a minimum just because of how some of these retailers continue to run and utilize their assets. Now what I would say is that within 10 years you'll see that there's going to be a significant impact in food retail around this changeover to new technology where we're utilizing CO2 and R290 and other energy efficient gases and lower GWP refrigerants. And part of that's going to be driven by regulation and part of it's going to be driven by the retailers and their desire on the ESG side. 

James Kotecki (12:05): 

And other than maybe having an additional door to open and feeling comfortable in the aisles, will I as the consumer notice the difference or is the point that I'm not necessarily noticing the difference, I'm still shopping as normal and behind the scenes, all this savings is going on? 

Tim Figge (12:17): 

Yeah, you as a consumer would not really notice the difference in the store environment. It really comes down to how the store operates in the back room and in those refrigeration cases, you yourself would not really see too much of a change there. Now what I would say is food retailing is going through a transformation though right now as we speak, as you've seen a large uptick in e-commerce. And I think the store of the future is going to look a little bit different though. 

James Kotecki (12:45): 

We hear about the rise of so-called, I think they're called ghost stores or dark stores or something like this, where it's a grocery store that's only for delivery, and it's optimized only for that, where consumers would never physically set foot in the store, but it's effectively set up like a warehouse. Are you thinking about and operating in those environments? 

Tim Figge (13:03): 

We have definitely worked with some of our retailers and some other partners around what that e-commerce model looks like, and not only just how the refrigeration needs to work, but how does the food staging. Once you've picked that food in that order, how do you stage it to be ready so that it can be delivered on time and still have that sustainable food quality? Because as soon as you start taking a refrigerated product or a frozen product out of those environments, it degradates and can degradate quickly. So we've definitely worked with a lot of the retailers on that and with a couple of partners on those technologies. There's a lot of exciting things going on in that space. 

James Kotecki (13:47): 

Is it easier in some ways because you don't have to make it look pretty for someone who's walking down the aisle, all you have to do is optimize for the warehouse workers or even the robots to be able to get it? 

Tim Figge (13:56): 

Yeah, no, it's much easier in some ways, but also there's other challenges though, because now the robots work in certain environments and robots generate heat. So being able to have a robot that can work in a low frozen food temperature zone is extremely difficult, and it's one that really hasn't been done yet efficiently and cost effectively. However, in a medium temperature zone, a robot can work very effectively, but you have to still do a lot of work around the airflow because of the robots in the different crates that you have in the system. 

James Kotecki (14:30): 

There is something that consumers will notice, and that's if they're labels, the price labels on their shelves are electronic. So tell me about what that technology is and what that means. 

Tim Figge (14:44): 

So we created a new division within Hussmann called Aperion a few years back, and it's really about how do we help enable digitalization in food retailing utilizing electronic shelf labels or price tags and other electronic signs. And that's really helped not only change the experience that the consumer has, but it also changes the way the retailers look at things from not only a labor productivity, but also from the sustainability perspective. There's some definite benefits there as well that tie right into the theme that we're promoting here at CES. On average, the US grocer changes 20 to 25% of their individual paper price tags a week. So that's about 7,000 to 8,500 tags per week per store. And through using this digital shelf label that eliminates all of that paper and it eliminates all the time and labor associated with the paper. 


But then it also, what it does is it enables the retailer to mitigate shrinkage around fresh food. And it does it because they have the ability to dynamically change price as the fresh food begins to spoil or expire. So if you think about strawberries as they start aging you can cut the price on those in half by automatically just changing the price through that digital price tag as opposed to having to go reprint a price tag and go through all of that process, then it's immediate and can be seen at the store level and the shelf level. And so that immediate nature can really cut down on shrink and waste. So a big part of a retailer's mindset around sustainability is food waste. How do they eliminate that food waste? The other way it can be done is day part pricing can be utilized for bakery items such as donuts. The price of a donut can be set to change automatically at 2:00 PM to where automatically you get buy one, get one free or half off, just to help make sure you lower that food waste and the spoilage aspect. 

James Kotecki (16:56): 

And what's the status of this technology? Is it being rolled out to stores right now? How many places can people actually experience this? 

Tim Figge (17:03): 

It's being rolled out now. It's much more mature over in European markets. The retailers here in the US are now starting to roll it out across some of their newer stores as well as going into the older existing stores. So what I'd say is you're starting to see it come in to several of the markets, and I think over the next five years, you'll really start to see a transformation at the shelf label perspective, the shelf perspective. 

James Kotecki (17:35): 

And I imagine marketers and advertisers might want to know, well, if you can put a price on something, can you make a dancing leprechaun show up on the price tag and get your attention for a specific product? Are there things that you can do creatively with that? 

Tim Figge (17:48): 

Some of the offerings that we have, not just at that digital price tag, but also at the digital shelf label and the digital shelf edge, will enable the merchants to really get creative on how they market products and working with CPGs. And then the other thing is, once you have that digital connectivity, you can transform that price tag to do much more. It can help you with inventory, it can help you with coupons and recipes. So a consumer can link through a QR code to a recipe to food safety information, the dietary requirements, et cetera. So there's a lot of different things that you can do with that digital shelf edge in including clicking on it and getting digital coupons as well. 

James Kotecki (18:36): 

A big theme of CES 2023 is human security for all, and clearly access to refrigeration contributes to food security, but can you paint a more detailed picture for us of places that maybe lack sufficient refrigeration? What does that actually mean for daily life? 

Tim Figge (18:53): 

Refrigeration at the core is all about sustainability of food and how we keep food safe for the consumers. And in the US and Canada, we have a very mature food supply chain, and we have relatively easy access to the food outlets, but when you get into certain countries, the food access can be scarce, and so the need to keep the products fresh and safe from spoiling has an even greater need. And through refrigeration, we can prolong the life of the food, allowing more folks to be fed and the shelf life of products to be extended longer than they are in ambient conditions. That sustainability and that access to refrigeration is one that continues to grow every day. As you look at certain countries, they're starting to mature their food supply chain, and it's one that we definitely are interested in continuing to pursue how we help some of those countries. 

James Kotecki (19:52): 

It occurs to me that this concept that people talk about of a food desert, which is a place in a community where I believe the definition is there's not really fresh options. It seems like actually maybe what that's talking about on a technical level is really a refrigeration desert. Is that how you see it? 

Tim Figge (20:08): 

It is kind of how you should think of it. Because when you think of food deserts, it's does the community have access to healthy food options? Because a lot of those communities where you have food deserts, they're still convenient stores or they're still, you can get snacks at and you know something, but what they don't have access to is really fresh foods and perishables. And so that's a key component of it. And that's a component of what we do is how do we make sure that we can help get fresh foods into those type of environments and refrigerate them efficiently? Without a doubt. 

James Kotecki (20:45): 

So Hussmann is a Panasonic company. How do you integrate with other pieces of the Panasonic consolation, if you will? 

Tim Figge (20:54): 

Yeah, so Panasonic is a large global conglomerate and has many different pieces to it. And over the years, we've been owned by Panasonic for six years now, but we've been working with them on different components. We've integrated their LED technology from one of their former divisions into our refrigeration cases, and so they make our LEDs for us. We've worked with them in the smart mobility office that they have here in the US that really is all about digital connectivity. And it started out with digital connectivity for mobile devices, and we're using that now to be able to connect into some of our remote refrigeration systems to be able to monitor their performance. And then another one that we have is over in Japan, they were one of the first companies to come out in Japan and Southeast Asia that had a CO2 condensing unit. So we're taking that technology and working on bringing that technology to the US for the supermarkets and for the convenience stores and small food retail. 

James Kotecki (22:02): 

As you look out to the next five, 10 years, what are you most excited about in your industry? 

Tim Figge (22:07): 

Yeah, look, I think the industry's going through a transformation not only just from food retail and the shift to e-commerce, but also there's a transformation where we will be able to really impact the environment through not just what Hussmann does, but what the total industry does in changing and transforming the refrigeration systems. We're at the beginning of that change and over the next 10 to 15 years, you're going to see a big transformation in the energy consumption in the supermarket, as well as all of the greenhouse gases that are emitted from them are not emitted because of the new refrigeration systems and the new technologies that we've deployed in the industry is using out there from the retailers all the way to the service providers and the manufacturers. 

James Kotecki (22:55): 

Tim Figge, CEO of Hussmann Corporation, a Panasonic company. Thank you so much for joining us today. 

Tim Figge (23:01): 

Thank you. Have a great day. 

James Kotecki (23:03): 

Well, that's our show for now, but there's always more tech to talk about. Here's a preview of the next CES Tech Talk. 

Speaker 3 (23:10): 

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James Kotecki (23:22): 

Please subscribe to this podcast so you don't miss a moment and get more CES at ces.tech. That's CES dot T-E-C-H. Our show is produced by Nicole Vidovich, with Mason Manuel and Kristen Miller. Recorded by Andrew Lynn and edited by Third Spoon. I'm James Kotecki talking tech on CES Tech Talk.