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October 12, 2022 17 mins

In episode 10, Catching Carbon welcomes a special guest to the studio to discuss CO2 in the Food and Beverage Industry. Trey Smith, Product Manager at Tomco and Dry Ice Expert, explains how food processors require carbon dioxide from start to finish of their respective processes. From stunning to packaging, this compound is essential for these companies to continue operating. With the CO2 shortages, food processors have been scrambling to find solutions. Alternative sources are the obvious answer, but these producers are growing increasingly curious on how they can make their current processes involving CO2 and food freezing more efficient. 

 

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Episode Transcript

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(00:25):
Episode 10.
We made it to 10 double digits,
right?
I have to start using toes waiting on me to get the 10.
Yeah.
Well this is like the big drop,
who do we have in house,
who said I got a calculator sit there and they number them for me on the podcast.
Kind of an engineer.
I'm a retired engineer.
Yeah,

(00:46):
literally still trade line wife calls me a recovering engineer.
That's not,
it's not like that dude that made the practice squad and got cut and went into retirement.
So what was it like every person with aspiring NFL so everybody calm down.
Oh man.
Alright taking shots and maybe we don't want to trade right here.

(01:10):
We got in the studio with us for the first time.
We have a guest actually here in the studio.
It is,
it really is.
We've got trey smith with us.
He works as the product manager with tom ecosystems and we're excited to have you here.
We're going to dive into how Sio two is used in the food and beverage market,
specifically beverage.
Uh and you can tell that we're shooting this episode before lunch because we thought,

(01:33):
what do we want to talk about?
I'm a little hungry today.
Let's talk about food.
Absolutely.
So Jeff,
why don't you tell us a little bit about uh dude,
I'm a little nervous in this episode.
So I'm gonna rub both your hats,
I got to like saving.
So as we talked about before.
Food and beverage makes up roughly 70% of the use and utilization of co two in this country now.

(01:56):
it's really pretty simple where it's used in beverage,
right?
Carbonates are soda so it grab it donated anyway obviously.
But the majority is used in food processing.
So you know for those of you in the food business that were following us,

(02:19):
you you probably know most of them run us through.
Where do we use C.
02 today in a food processing,
meat,
poultry seafood where the major utilization.
So it's literally from the start of the process to the end of the process uh whether it's stunning the livestock coming into the plant all the way to uh using the C.

(02:39):
O.
To to to chill the meat as it's going through a mixer through a freezer final product going through and then all the way to the packaging going out the door so they'll put pellets snow um some some type of extra cooling on top of the packaging before it leaves the plant going out to the their final customer at the end of the day.

(03:00):
What happens if you talk about shortages?
What happens if you don't have to you don't have a good product,
you know 2000 people?
Well that's the big thing.
Right?
Yeah you just shut the plant down?
You're you're in a temperature controlled environment but that's still not enough to accomplish what you have to have the ceo to medium.
You've got some transit of that product either within the plant or outside of the plant into a truck into a truck,

(03:26):
going to another storage facility.
So yeah there is some transportation in there where the product needs that extra bit of chilling if it's not in the controlled environment.
So I guess like a nice visual,
right?
A lot of delivery home food delivery right now is taking place.
And so maybe a lot of our listeners have experienced that you have the refrigerated packs but also frozen dry ice there.

(03:47):
So kind of the same thing happening at a large scale within these plants essentially you're using that C.
02 to cool at exactly the same thing on a more of a commercial scale versus the individual,
What they call Combo boxes,
these other dimensions but roughly £2,000 of meat layered or mixed in with all sorts of dry ice in there to transport it from where it was processed or we're going to the processing plant,

(04:12):
harvesting,
planting,
processing plant and everywhere in between.
So given all that.
So obviously,
I mean the bottom line is it's critical to our food supply is critical to our food.
So we've talked about it being a critical ingredient,
this is critical to the manufacturing process and like I said,
if you don't have C.
02 and we're experiencing shortages across the southeast right now,

(04:33):
I've heard of plants being shut down.
I've heard a railcar of C.
02 which is about £80,000 of CO two from the west Coast East Coast costing upwards of $250,000.
Where it used to be.
You know could be 1 1/100 of that on a given day prior to that.
So crazy Numbers right now because again it's the opportunity you shut the plant down and have 2000 people standing around with nothing to do with millions of dollars versus a quarter million.

(05:00):
So what trends are we seeing in the in the food processing business in the industry I think you know for years and years you've seen plants tackle any problem with headcount?
You know they can throw more people at it.
Labor was cheap so too was cheap.
Uh That doesn't exist anymore.
You know it's harder to find uh you know staff that can that can do uh you know higher level task within the plant.

(05:29):
Uh So the cost of of the employee has gone up.
The cost of C.
02 has gone up.
So there's there's a huge trend towards automation.
Uh Anything you can do to reduce headcount.
So what we're seeing in a lot of plants now is is a focus on just that.
What can we automate uh to reduce headcount and increase efficiency.

(05:52):
Uh And one of those,
one of those is a good example is our new snow hood.
So we take a lot of these plants will use bends of pellets hand scooped.
We joke that is a calibrated scoop.
But you've got these boxes coming down the line and there's a that's right,

(06:12):
that's why I like 56 pieces of I do it with my ice cream,
you know,
it's a little deeper.
Right?
So uh but that's it's it's a part of the process that's not controlled either.
So depending on who's working the line,
who's scooping ice out of the bin into the boxes.

(06:33):
That could be £1 it could be half a pound,
it could be £2.
There's there's no control over what goes in that box.
So what what what does that look like?
What are we doing?
So it's it's an extension to an existing conveyor system going through the plant.
So as those boxes come through,
uh it hits the limit switch inside the box dumps a given amount of snow in the box and the box box passes on through gets politicized and then off to secondary customers.

(07:02):
Process automating the production line in any production line,
right?
Manpower and saves here to get the same dose every time as opposed to what we talked about.
You never know what you're really truly getting other other thing with pellets.
So you,
you're not ordering these food plants are ordering a bin of pellets,

(07:24):
they're adding a truckload of pellets.
So that truckload sits out in the parking lot for a given number of days.
So you've got roughly 10% per day being lost through sublimation out in this trailer,
that's sitting if it's a summertime doesn't matter if it's summer or winter.
The pellets are,
you know,
negative 110 degrees.
So whatever that temperature differential is,

(07:45):
it's,
it's the same,
you know,
sublimation rate,
whether it's summer or winter sublimation picture,
like that fog coming across the dance floor of some horrible nightclub kind of,
Right,
is there a horrible dance you're going to find it if you saw me dance,
it's a horrible dance club,
I'm there.
It's horrible.
Yeah.

(08:06):
So basically if you buy £50,000 of container,
whatever a whole load of it,
you're saying every,
you're losing 8 to 10% of that.
I have no doubt that these employees at these facilities are using the first in first out method every single time,
No doubt.
Uh and and I've walked through plants before where there's a bit of ice that just comes fresh off the truck,

(08:28):
you know,
it's no telling how long it sat out on the truck,
but they take the lid off and it's literally 25% full.
So that,
that was,
that was paid for,
but never,
never had the opportunity to get used pulling from the front.
They probably think they got 5,
10 pins that just showed up empty by the time.
It's good,
especially after day three that starts to turn into kind of a block of ice and that pill it anymore.

(08:52):
So they really don't like doing that when they got to break it up and I'm sure the consistency is the same and there's never gonna,
nobody's ever get the last bit of ice down in the bend.
So there's just a huge amount of waste pellets versus a snow hood that you're literally only dozing what you need on to me.
Exactly.
That's how I like that definition of.
That's great.
So what I heard you say is the biggest issue of trends that you're seeing is manpower,

(09:17):
labor shortages to shortages and praising and cost control at the plants themselves by the producers,
by my chicken is used to be 7 99 99 a pound.
You know,
these guys are killing it,
right?
I mean,
the food processor making tons of money.
Not necessarily,
that's what we're wondering.
I mean,
you assume that big corporations price gouging,

(09:38):
but I mean,
is there a chance that they're actually making less than they were pre covid it's not right.
It's different in the poultry industry.
Yeah,
I think that's that's really,
I mean,
one of the true friends that we're seeing is is especially,
I've seen a lot in the poultry.
Again,
red meat is definitely there maintaining some of the margins,
but I've heard all sorts of stories around culture market is definitely seeing a constraint in their margins.

(10:03):
You see some stock price pressures on some of these,
I don't know if you saw the news recently.
Tyson food just last week,
I believe,
announced they're consolidating all of their corporate headquarters into one location in Arkansas.
Again I don't know for sure if that's driven by cost overhead reductions.
Things like that but kind of screams to be a little bit.
That is not to speak for Tyson in any way shape or form but I think they're feeling some pricing pressure not just on Sio two obviously but all aspects green feed,

(10:29):
everything.
We talked about that pricing and pricing that goes into the fertilizer to feed.
Everybody knows that the inflation in this market right now.
So so what else are we doing?
What are we doing?
You talk about the snow hood,
what else we're doing for efficiency use of C.
02.
Well that's that's a great point.
So you look at any of these plants and their their processing roughly two million birds a week.

(10:49):
I mean you could have plants,
you could have plants doing more than that less than that but say an average plant might be two million birds a week.
So if you can say 1% you know in what outgoing outgoing through the plant.
Uh So big thing with transporting poultry,

(11:10):
you've got water weight within within that product.
Uh You want to retain that water weight because that's what your billing.
Uh It could be an internal external customer.
But the point is you want to maintain as much weight of the bird as you can through that transportation cost how much pounds of weight and weight of me and my shipping.

(11:31):
So I believe you got a product you're talking about earlier,
it's called combo chili.
What does that do we talk about efficiency and yield on that?
What do you,
what are you hearing from the customers?
So so when when you're filling any combo box with product,
whether it's beef,
chicken,
pork,
what you wanna do is you want to eliminate any temperature stratification within that box,

(11:53):
the best you can.
You want an even cooling of C.
02 over that product uh to retain that water weight during transportation.
So our combo chiller uh takes that as as the meat is distributed into that combo box,
it's got a rotating horn on it that distributes me evenly through the box versus what you'll see a lot of times implants is the conveyor just dumps in the middle,

(12:19):
in the meat,
just stacks of it comes off and you've got to have a guy with a shovel that's you know,
kind of moving the meat around shoveling pellets in.
So you'll literally see combo boxes sitting on the production line that have huge cold spots on them,
huge warm spot on the other side.
So you know,
there's just extreme stratification of temperature throughout that box.

(12:42):
The combo chiller eliminates that as the meat goes in spread in the box.
We don't snow right behind that.
So you have a nice thin layer of snow over all the meat,
even temperature distribution and much higher yield on the product.
So it sounds like you know you've come in,
you've walked through these facilities and you've identified solutions to help have less of the need to shovel on ice with the human error.

(13:08):
We want to get rid of the calibrated shovel.
Right That's going away for good.
You know we're doing away with that.
You can get a hardware.
So it makes me wonder are you getting a lot of requests from your partner people your relationship to kind of come in and do an internal on it and say okay trey.

(13:28):
You know you helped us here like you mentioned co.
Two from start to finish in the process.
Where else can we be more efficient?
What can we do any R.
And D.
Around that?
I mean is there an interest in continued improvement in other parts of the plant?
I think that's that's what we're seeing right now.
And it's it sort of goes back to that saying this invention is mother is a necessity of invention.

(13:49):
Mother,
I don't know what other necessity is the mother of invention.
Thank goodness you're a new product development with others.

(14:11):
So what we what we are seeing is is because of the squeeze,
the shortage of C.
02.
The shortage of manpower.
We are seeing that uh our customers take a hard look at where they can make improvements no matter how small it is because again 1% over two million birds a week.

(14:31):
I mean that's that's a significant number.
Uh So what we've done with the snow hood uh we we put a barcode scanner on it.
We can actually scan the box tell exactly what's in,
what product is in that box,
how much weight is in that box,
what the date is and we can actually does snow into that box on the fly based on exactly what that product is that didn't exist six months ago.

(14:57):
That's awesome.
So that's great.
Well real quick just to close it.
I think we have a broader conversation about this is a whole another episode.
But what are you seeing in nitrogen?
So it's some of those applications that you talk about making ice can do that.
But the blending some of the freezing are there are the utilization of usages of nitrogen in these plants and you know what do you see what the trends going on there?

(15:21):
Like I think it's a bigger conversation but it's a bigger conversation.
But what what plants want to be ready for now is with a shortage of C.
02 with that market being as volatile as it is.
They want.
They want the ability to go from nitrogen to C.
02 with the flick of a switch.
So that's that's what we're seeing dual gas type of system.
Yeah because of the fears is yeah we have a ceo to shortage everybody.

(15:45):
I think it's kind of a jerk and we need to be a nitrogen but that's you know,
and that's not.
Is there enough nitrogen in the market to support that?
We're gonna have the nitrogen everybody.
You can trade your shortage.
I like that.
So if you're able to use both gasses follow the trend where if you have to go to in your market or it's cheaper to have nitrogen market.

(16:08):
No,
I'm excited to dive into that because I would love to understand where can you use nitrogen and where you have to be agnostic to C.
02.
But that gives us one more episode in our Q.
We're gonna make it to number 11.
That means for sure.
So I'm excited about it.
I don't think that's number 11.
Oh,
absolutely not.
No.
We we've got we've got 100 more of these.

(16:29):
Come on.
You think we're going to step away?
No,
way too much fun.
Alright,
appreciate you summarize biggest trends.
You see manpower shortages due to shortages,
tightening squeeze on margins and dual gas conversions leading forefront.
We really appreciate you coming in and talking to us about this stuff.

(16:53):
Go take care of manpower short versions.
Don't forget to pack your what's the shovel calibrated?
Check that.
I think you have to check it is a checked bag.
Otherwise might be used as a weapon.
All right,
everybody thank you so much.
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