Episode 17 Transcript: Why Reusable Water Bottles Ain’t Gonna Cut It

Molly Wood Voice-Over:

Welcome to Everybody in the Pool, the podcast for the climate economy. We dive deep into the climate crisis and come up with solutions. I'm your host, Molly Wood.

I hope you all enjoyed your Labor Day barbecues … some of you went vegan, right? Yeah … you did.

Ok … this week on the show … a very cool entrepreneur … tackling the double whammy of greenhouse gas emissions and plastic waste … by trying to kill off one of the grossest symbols of both … the plastic water bottle.

Manuela Zoninstein:

My name is Manuela Zoninstein. I am the CEO and founder of Kadeya. We eliminate the need for single use beverage containers.

Molly Wood Voice-Over:

Kadeya is creating what Manuela describes as a bottling plant the size of a vending machine … that dispenses reusable stainless steel bottles full of local tapwater that's heavily filtered and cleaned … and when you're done … you return it … and the bottle is washed … sanitized … inspected … and refilled … all inside the Kadeya machine.

And that's pretty cool … but like so many entrepreneur and startup stories … there's an even more amazing story about how Kadeya found an unexpectedly awesome market …

And also … Manuela herself … is fascinating. I started like I always do … asking … how she got here.

Manuela Zoninstein:

You know, it's not been one moment. I think we're . Each kind of primed to look at the world and identify certain sets of challenges, and I was for sure primed to look at the waste problem. I immigrated from Brazil when I was seven. My dad was a communist and um, my mom is a feminist anthropologist and I think that mix of kind of academic, very, very activist upbringing along with moving in a young age from one country and one culture to another. I was already . Raised to think about problems at scale and in a systemic fashion. And then when I moved it was like terrifying and jarring, but also amazing to realize like, oh, the world I knew there like co-exists temporarily with the world I know here. And they're very different. So that means you can have different ways of doing things.

at the same time. And so I think that really shaped my worldview and my desire and belief that where we are today isn't where we have to . What we have to be doing tomorrow. And um, and then yeah, I just, I, I hated waste. I was, I like to say what made me weird as a kid is what made me, makes me cool as an adult.

So like my second grade science fair project was a bus that ran on garbage, and I used to stay after class and separate. The garbage because I hated all the paper that was going in there that could be recycled. And I moved to China, um, after college. I started out as a climate correspondent with Newsweek and had a front row seat to not only the world's greatest clean tech revolution, but also the greatest waste generating revolution.

And saw that country from 2007 to 2015 go from . reusable beverage containers to single use containers. Anything that happens in China, you think 1.5 billion people are literally doing this exact same thing right now,

Yeah.

and it's easy math to figure out that that is not sustainable, whether in China or at a global scale.

So it was when I came back to the US that I started really thinking, okay, look, we designed the system of single use. We can design a different way to do it. And I started, I was walking to work every day in New York and walking by city bike systems and thought, what would it take to do that for bottles?

And literally just started saying that to people and that's where it began.

Molly Wood:

Let's talk some nuts and bolts here. So what, tell us about the packaging industry and like how a bottling plant works now. I mean, I think people have this awareness of single use plastics, but like walk us through what you learned the , I don't know, the true scale and the true horror as you were developing this company.

Manuela Zoninstein:

Yeah, so I'll give I guess some numbers to start with. Part of it was I, I was working at a software company. We had all the bells and whistles of single use beverages as well as all the fancy beverage dispensers. So I don't mean to name check anyone, but we had bevy, we had flow water, we had kombucha dispensers, and um, you know, uh,

What is it? Cold? Um, cold brew on tap. And so I wasn't doing anything with sustainability in that job. And I started the sustainability club to scratch my green itch and worked with the kitchen staff to launch a reusable water bottle program for the company where I was working.

And when we ran that for three years and we reduced single use consumption by about 30%, so hurrah, that sounds amazing. We, you know, 30% reduction better than our recycling rates in the United States, and. Then I learned about the size of the market, so, uh, uh, for single use and how quickly it's growing.

So in 2021, single use plastic water bottles in the US commanded $40 billion in revenue, whereas reusable water bottles commanded 2 billion. and by 2030 it's gonna be worse. Where single use plastic water bottles will be $67 billion. Market and Reusables will be 2.6 billion. So it's gonna go from a 25 times larger market for single use, excuse me, a 20 times larger plastic market to 25 times larger.

So, and by the way, the US is the world's largest market for reusable water bottles.

Hmm.

No one in Africa, Asia, Latin America, or Europe for that matter, is carrying a Yeti around with them all day to refill at the tap. And so it was a really daunting moment for me as an environmentalist and as a reusable water bottle nerd who's been carrying around her water bottle for years to say, oh my God, this isn't gonna scale.

Yeah. I

Like I can, I can sit here and cross my fingers and wish and hope that everyone will change their behavior and see the light. But I've been in the environmental space since 2007 and people are not seeing the light and the data is being put in front of them. So that was my kind of terrifying aha moment that, okay, asking people to just carry around reusable bottles is not gonna be the solve.

Um, okay. So talk about the solution then. So then you were like, all right, this doesn't, getting everybody a reusable water bottle still has a host of problems. What's the, the bike share version of what you've created? Mm-hmm.

Yeah, so Cades sort of starts with this conception, just like bike sharing.

But what's unique about beverages is we have a ready water source available in most of the planet. And so Kya leverages that existing infrastructure and our station, it's, it looks like a vending machine. It connects to the water main. We take in local tap water, we filter that water.

And then we have inside of our station 70 bottles that are sitting in a, uh, humidity and temperature controlled storage. Box, and you go up to the station and you vend a bottle of your choice with whatever product you want, and we fill it there. So it's kind of like a soda fountain in that regard. But you don't have to bring a container and there's not a single use container that you grab.

It's a reusable stainless steel bottle. We fill it with your beverage, cap it, and you grab it and go on your way single use wins in large part, not exclusively, but in large part because of the convenience factor. It's a grab and go product that you can pick up. You can throw it in your bag, you can . Go on your way, you can carry it. And then when you're done, you can get rid of it.

So you don't need the container any longer than you're consuming the product. So for me, that was critical is we have to dispense a packaged good for the individual to go. And then when you're done, you would return that bottle, right? Um, and then we inspect the bottle, make sure there's not any major debris, like bubble gum, a cigarette butt, plastic wrappers, if it passes that.

It goes into a dirty bottle queue, and then it goes through a very intensive wash and sanitize process, which has exceeded all regulatory and commercial standards. We think we have the best bottle washing system in the world. We beat the best dishwashers that are available, and then it goes through a dry system and then, uh, goes through a final inspection where we use two cameras to

Identify if there's any final problems with the bottle, a blonde hair, a hairline fracture, a chip on the lip, a dent on the side. We can identify all of that. If it doesn't meet our standards, it gets put into a reject bin that we manage on our own, and we'll recycle those bottles. If it passes, then it goes back into that container that I mentioned earlier with 70 bottles that's humidity and temperature controlled waiting to be dispensed again.

Molly Wood:

This solves more than just the consumer end product. Right. And I feel like this is a, or consumer end consumption issue because on the, you know, when we think about getting a bottle or a soda from a vending machine, there's the part where I get a single use container, but on the back end, there's all of this.

Shipping of all of that stuff from location to location to location. Talk about the the impact that that takes outta the system.

Manuela Zoninstein:

So in my research I calculated that two thirds of the greenhouse gas footprint of a single use product is in the production of the raw of the material to PR to turn into the container, and then once packaged the distribution of that product to get it into your hands. Two thirds. And what's fascinating is our first CADEA prototype, our M V P, we did an impact assessment, a cradle to grave lifecycle assessment, and it was determined that we had actually reduced the carbon footprint against single use, 67%.

Wow.

And so it shows that just on our very first prototype, which was not optimized, it was super clunky. We had immediately removed that carbon footprint. Exactly. And so as a side note, I get concerned when I hear all about new material innovations for packaging because while that can eliminate the, the.

Plastic eyesore that we are all becoming aware of. It doesn't eliminate that two thirds critical carbon footprint of producing the material over and over and shipping it over and over.

Molly Wood:

I mean, just picture to yourself if you would, friends, container flats full of bottles and cans, and imagine those not having to cross an ocean or the country. And that's what we're talking about here. Mm-hmm.

Manuela Zoninstein:

Yeah, so I mean plastic, I'm not gonna bore your, your listeners, but it starts with petroleum, it goes through a refinery. It then gets . You know, turned into a solid, then it gets pelletized, then it gets distributed to a bottler, a bottling plant. Then it gets blown into a bottle. Then it gets transported to be filled, and then that gets transported through three to five nodes, right?

Fulfillment center, distribution center retailer, to then end up, you know, in your grocery cart or in your hand at a seven 11. So we're eliminating all of that.

Molly Wood:

for like 20 minutes. I mean, like, you know when you put that story behind the 20 minutes that you spend drinking your Dr. Pib, like not good.

Manuela Zoninstein:

Yeah, exactly. Um,

okay. So, and right now cadea dispenses water.

Yep.

Molly Wood:

And is this a, so, you know, we've all kind of seen those like Coca-Cola machines that do all the different kinds of Coke or whatever.

Manuela Zoninstein:

The freestyle.

Molly Wood:

a solu? Yes. Thank you. The freestyle. Is this a solution that eventually becomes that?

Manuela Zoninstein:

So we started with water. Uh, just flat filtered municipal water. We filter out 99.999% of microplastics, and we feel confident that we can filter out about eight of the P A Ss and p f oas, um, that have been identified, which are the Forever chemicals, which the E P A about two months ago recommended that we start monitoring in our water systems.

It's been found that about 50% of Americans are consuming water. With P F A S and P F A Ss. Um, so you can look up forever chemicals. I'm not gonna bore you with that. Um,

Molly Wood:

But you'll be mad,

but

spoiler

Manuela Zoninstein:

yeah, they're really bad. They, they are forever chemicals. Uh, they don't go away. We don't know how to dispose of them yet. Um, and then our next prototype, which we've already tested in the lab, adds carbonation and flavoring.

So we're working through exactly which flavors we wanna be carrying, but yeah.

We could basically replicate the variety of, uh, Coke Freestyle and what we do that the Coke freestyle, I don't mean to name check them. And you know, I, I love Coca-Cola and I'm a huge fan of what they've done and, um, I'm talking to them regularly. Um, but what they didn't figure out is getting a beverage to someone's mouth requires a container and

Kday has taken care of the container, which nobody else has. And so I'll, I'll like just say, I think what makes Kday unique is we said the bottle, the package is actually an asset, not a temporary vehicle for a product. And what we're doing is we're divorcing the packaging from what is the core product, and we're saying to beverage companies, Hey, you can still sell your product. Sell it through the Cade network. So we like to call ourselves the Liquid Railroad and think that all beverage commerce will travel, travel on our tracks in the future.

Molly Wood Voice-Over:

Okay, time for a super quick break and also just sit and appreciate for a moment, okay, time for a super quick break. And also just sit and appreciate for a moment the scale of this ambition. Like why not build the Liquid railroad? This is why I do this, show friends, because people are working on stuff and they aren't thinking small.

Be right back.

Welcome back to everybody in the pool. I'm talking with Manela Zine, the founder, and C E O of C. Next up, she's telling me the story of how Covid led her fledgling company to a surprising new market.

Molly Wood:

Talk to me about where you are deploying, because I think the go to market for Cadea is what is particularly interesting in the industries that you've targeted as your kind of beachhead.

Manuela Zoninstein:

thank you. Yeah. We lucked into this. This is pure serendipity. We are focused on workplaces, but not the regular workplaces. I think your listeners, imagine we're focused on the trades. We're we're focused on environments where . The population needs hydration to physically perform, let alone stay healthy and safe.

And so our first and now repeat customer is a major general contractor in the construction space. Our second now repeat customer is the Air force. And we're getting ready to deploy on two Air Force bases that I'm so excited about. And we got, we were overwhelmed with demand. Um, but we chose these two locations to start with.

Um, we deployed about a month ago at a pharmaceutical, uh, plant where we're, uh, they're producing medicines. And then about a month later, . From today, we'll be deploying in a manufacturing plant just west of um, O'Hare Airport. We're here in Chicago, um, and then we're talking to an airline to deploy with their ground maintenance crew at the airport.

And then we're talking to a major fulfillment center. So these are all environments where the workers need hydration to do their jobs. Companies recognize that, and by the way, there's major OSHA oversight. With specific language about how much water these individuals should be consuming, and that language is becoming more and more strict with climate change.

Whereas I thought we would be launching, you know, in offices and university campuses. And then Covid hit and I had to step back. But really for a year and a half, I kept hearing, yeah, this is interesting, but I have so many other options, why would I use you? Whereas in these other environments, they're like, we only have one other option and it's not working.

Molly Wood:

So you're saying you lucked into it. Because of Covid, like you were sort of forced to look at other potential customers. What? What was the moment like?

Can you tell me about a customer moment where you were just like, oh, this is where to go? Because I feel like that's such a common startup thing, right? The business you build is not necessarily the business that comes to you.

Manuela Zoninstein:

Absolutely. Yeah. So I would say, first of all, it was C O V I D, and I had to quickly realize how critical . Um, the cleanliness of the bottles was gonna be to survive. So

invested a lot in that. Um, and then, yeah, I was just like, people aren't going to these environments. They're not going to corporate campuses, they're not going to academic campuses.

But I was hunting, I was just hunting for a long time and I just beating my head against the wall and I was terrified. I was a, you know, a solution looking for a problem. And I moved to Chicago two summers ago and . My husband put me in a sailing class as a gift for an anniversary, our anniversary, and I was like, okay, I am going.

I went by myself and I ended up in a boat with another woman. Who I really got along with, and it turned out that she works for this major construction general contractor. And she was like, oh, we gotta get you in our offices. I love this. And I was like, yeah, offices great. Let's go check it out. And we visited, we talked to her facility and office manager and the, the person who runs that office and everybody was like, yeah, that's nice. Nothing else. And so she came back to me and was like, man, well I cannot get you into our office, but you know, if you'd be willing to come to our construction site, I can get you in tomorrow. And I was like, excuse me, I have never heard anyone else say that to me. And then I had gotten into the Techstars Farm to Fork program in Minneapolis.

And so I went, I, I basically took a hiatus from . Um, trying to find customers and was like, I'm gonna take these 13 weeks and go back to, um, the drawing board and figure out is this industrial kind of use case? Is this, is there something there? And did about 130 interviews in those, um, 13 weeks and just kept hearing like, yeah, this is a problem, this is a pain, and.

So I came out of that confident enough to pursue it and, so demo day was October 6th and October 28th. So literally three weeks later, . I had a contract signed and I was installing our Alpha 2.0 prototype into this construction site. And

awesome.

what what was even more exciting is before I even plugged in the unit, the project executive, his name is Aaron, he has to buy the station.

And I was like, You wanna buy this, it's gonna break. Like you don't wanna buy this. And he was like, no, I wanna buy that unit. So we, we converted him to just a, a recurring pricing model. But I said, Aaron, why do you wanna buy this? And he said, What am I gonna do when Kade leaves go back to buying and distributing single use plastic water bottles and what was so interesting is when I was kinda re. Reliving that moment. What stuck out to me is that for him, the emphasis was not on single use plastic, which is what I had always thought would be the problem. His emphasis was on buying and distributing, and for me that was the, the one of the biggest insights is in these industrial environments, we're solving a logistical headache first and foremost, because these are places that are either transporting pallets of bottles of water.

into these work sites dozens of times a day, and then having to cut them open and people have to drop what they're doing and walk over to go and grab a couple of bottles and chug them, and then throw the plastic bottles and someone has to come and sweep it up, and then they've gotta get a waste hauler to collect all the trash.

So that was like the first and foremost, the biggest pain. And then the second one was, Because we are, and we can talk about the digitization because we can attribute to the individual. Then they started getting really excited about the fact that we could help workers monitor their hydration and understand dynamically when they should drink more water.

So kind of like step tracking for water and uh, it's kind of that one-two punch of like a logistical solution that also ensures worker health and safety.

Molly Wood:

so it becomes a compliance solution, which is huge. companies. Okay, so talk about the data. Uh, clearly you had built it in so you knew it was gonna be a thing that maybe you thought would be kind of like a quantified self perk.

Manuela Zoninstein:

So in terms of digitization, when I was in business school, . and I was telling everyone, I'm gonna build city bike for bottles. I'm gonna build city bike for bottles. And everyone was telling me I was crazy.

And I said, well, why, why is that crazy? And the first thing people said was, how are you gonna get people to return the bottle? I was like, huh, that's a good question. Let's go figure that one out. And so I did a bunch of experiments around campus and, uh, after a series of trials I found when I sharpied , A number on a bottle,

Yep.

and then I ask people, the students to write their email address next to their bottle number.

99% of the time I got the bottle back

Yep.

and we're now in our fifth deployment, and we're still getting 99% of our bottles back with no penalty or deposit. There's no deposit. You're not putting down a couple bucks, you're not putting your credit card down. It's, it's purely a trust system.

Yeah.

but there's like a psychology behind it.

And so in these work environments, what we're switching to, instead of you writing your email address is scanning people's work badges and that Venza bottle.

Mm-hmm.

have a, a touch screen so they can make their order. If they wanna upgrade, then yes, they do have to either scan a, a credit card or, you know, apple Pay.

Um, eventually we'll integrate on the backend with like the corporate debit system. A lot of these environments let you put cash on your, um, your work badge, and then a bottle gets fended down and every bottle has a laser edge QR code. On the bottom. So every bottle has a unique identity, and so we're able to link, at that point, call it user A, B, C, with bottle 1, 2, 3, 4, say 10:00 AM at station A.

And then after they've consumed their product and they return the bottle to any station, we know same user return. That same bottle at, let's say 11:00 AM at station X.

Mm-hmm.

And so we do . Believe that tr the connection of the individual ID to the bottle ID is really critical to continuing to have those high return rates.

It also allows us then to attribute to the individual their consumption and say, okay, user A, B, C has just consumed, you know, a lemon lime Gatorade, and a watermelon Waterloo. Um, so we know that that's what they're consuming. And we know that on a live basis. And so that's really fun because we can report to the individual through a web app what their consumption patterns are.

We're also integrated on the backend with Fitbit. We're starting to add on other integrations to let people track their health wherever they already do that. , that's one bucket of, um, of the digital product. And that's free for the individual and always will be The data follows them wherever they go. And then the other bucket is for the corporate.

Um, and they are getting access to the OSHA reporting data. So if an OSHA inspector shows up, they can say, Hey, we've got a record, which shows when we people took water breaks and how much water they were consuming, and we were making sure that they were drinking the right amount. And then also it helps the corporate to talk about how much they care about their workforce.

And they can have all these nice perks of, we're giving you great quality water and great quality products. So that helps them with recruiting and retention. And then we have, of course, E S G and waste footprint data that they can report out to their, you know, shareholders, um, or their clients, whoever is focused on climate and E S G questions these days.

Molly Wood:

Okay. Last question, I promise. Where did the name come from?

Manuela Zoninstein:

Yes. So Kya in Portuguese means chain, like supply chain, and we say we are re-imagining supply chains and starting a chain reaction for good. If you speak to a Brazilian, uh, we did change the spelling by the way. Uh, in Portuguese it's c a d e I a. We, I changed it obviously to K A D E Y, so it's phonetic.

The U R L was available for 1600 bucks. Trademarks were available. Um, but if you speak to a Brazilian Kya also means prison

Oh,

Um, but that was not the inspiration, you know?

Molly Wood:

Yep. Uhhuh.

Manuela Zoninstein:

So, um, if you're talking to your Brazilian friends or if you're listening out there, I also know Kya has another meaning. Um, but we're focusing on the chain meaning here.

Molly Wood:

We're just going with break free from break.

Manuela Zoninstein:

Exactly. Liberate yourself.

Molly Wood:

Liberate yourself. Where can people learn more?

Manuela Zoninstein:

kya.com. K A D E Y A and we are on Instagram and LinkedIn. And you can also just follow me, connect with me on LinkedIn. I am Manuela Zine, the c e o and founder of Kade. A pretty, pretty unique, um, names there. And, um, I'll just add, you know, we're really focused on Midwest based. industrial companies and opportunities.

So if you're looking for, uh, a win-win win solution that makes sure your workers are healthy and safe and saves you a ton of logistical headache and time and money and gives you a great sustainability story, uh, please reach out.

Molly Wood:

Manola, thank you so much. This is amazing.

Manuela Zoninstein:

Thank you. This is so much fun.

Molly Wood Voice-Over:

That's it for this episode of Everybody in the Pool … thank you so much for listening … I LOVE talking to climate startup founders with big ambitions … and I love these stories about how the business you think you're building … might turn into something totally different because of a weird twist of fate …

And most of all … I continue to love the fact that people … are … working on it. Don't get discouraged. The work is happening. The drops are becoming a flood. Together … we can get this done.

That's it for this week … please like and subscribe and rate this podcast … it really helps.

Please email me your thoughts and suggestions … I really read them! in at everybody in the pool dot com …

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See you next week.