The Business Leadership Podcast

Salli: [00:00:00] You're listening to the business leadership podcast with Edwin Frondoso.

Wayne McIntyre: We want to start a revolution, which means there's no chain at all. We want that chain to go away, right? We want to basically collapse that whole chain, put it right at the distribution center that vertically integrate everything in one place and get rid of the trucks completely.

I think when it's a hundred people or a hundred companies, it's a thousand times the impact, right? And that's how we 10 X our movement and 10 X this revolution

Edwin: Good morning. Good afternoon. And good evening biz leader. Welcome to another episode of the business leadership podcast. I'm your host Edwin Frondozo and today we are featuring a very special episode from our future narrator mini-series, which was recorded.

Live at the collision conference in Toronto, Canada. In this podcast mini series. We explore the future of leadership, innovation, [00:01:00] and storytelling with visionary leaders who are not just designing products. But they are creating entire new world's end markets.

Joining me is Dr. Paul Newton. And together we are speaking with Wayne McIntyre, the CEO and co-founder of Relocalize. It is a company on a mission to decarbonize the food production industry. By de-centralizing food manufacturing.

And our conversation to Wayne discusses, how re localize aims to eliminate middle mile transportation and reduce carbon emissions by establishing autonomous micro factories at distribution centers. Starting with packaged ice and beverages.

We'll explore this significant impact this approach has on both costs and sustainability, as well as the challenges of securing funding and promoting a movement towards a more resilient. And efficient food system. So without further ado. Here we go.

We're now speaking with Wayne McIntyre, CEO and co [00:02:00] founder of Relocalize. Wayne, how are you doing today?

Wayne McIntyre: Yeah. Doing really well. I think as Edwin startup life is a rollercoaster ride, right? The initial climb, the heart stopping plunge and having fairly recently closed a seed round. And right now we're building The next version of our platform. It's the fun part right now.

And of course we're waiting for the next loop to loop, right?

Edwin: Yeah, 100 percent and I'm sure you wouldn't have it any other way though, right Wayne?

Wayne McIntyre: Absolutely not. That's the life of the startup, right?

Edwin: Exactly. So why don't we just start right there, Wayne. If you could just share what problem is Relocalize solving within the food production industry?

Wayne McIntyre: Absolutely. So our business is focused on two things. Our purpose primarily is decarbonization. That's really as an organization, what our mission is, but in order to deliver on that mission, we need to deliver, I think, real business value for our retailers, and we're focused on food retail for our customers who are food retailers. And so the challenges our food retailers are facing are, of course, [00:03:00] inflation control of their supply chain disruption, and of course, sustainability is top of mind these days as well.

Edwin: Oh, it's a, there's a number of things challenging within the food industry for sure. In terms of, the solution that Relocalize is doing and how it hits each one of them, does it, can you share how, within the robotics automation, it's really revolutionizing that food, the food production?

Wayne McIntyre: Absolutely. So if you look at the way food is made today, it's made in large factories and we're talking about manufactured foods or typically large farms as well, but we're really focused on the manufactured food segment. And once it's made, it goes on a truck. That's the middle mile transportation. And then off it goes to a distribution center where it ends up in the convenience store or grocery store for consumers to buy and that middle mile journey, all that trucking is a huge source of carbon, just to put it in perspective 3.

1 gigatons of annual CO2 equivalent carbon emissions come from food supply chains, right? And it's all because of this [00:04:00] centralization and, over the last 50 to 70 years, centralization and food sectors has really reached a peak and we're on a mission actually to decentralize production and decentralization means you're getting closer to the customer, you're getting closer to the retailer. Closer to the end consumer and actually our solution is quite simple. We're breaking that mold of a centralized factory into a small, what we call a micro factory. We're producing right at a retailer's distribution center. And that completely eliminates middle mile transportation. So zero trucking between point of production and point of distribution.

Edwin: Two things come to mind, Wayne, which is pretty, it's pretty fascinating where I think the industrialization brought us to that centralized Network or infrastructure. And as time goes and all the problems, as you said, and when it comes to that CO2, can you remind me how much The number you said, and what does that really mean to a layman like myself when it comes [00:05:00] to, like, all that gases that is coming out from the trucking industry?

Wayne McIntyre: just to put it in perspective, the total emissions are less than a hundred gigatons. And we're talking about a large percentage of that. So food is the number one source.

Our food system is number one source of global greenhouse gas emissions. And if you're looking at that 3. 1 number, that number, for example, and there are different studies with different numbers.

I'm quoting, one of the largest, most cited studies for that number, but that number is actually about three times the entire commercial aviation industry. So it's a huge number. It's a big number. It's an important number. And that's really why we're laser focused on, on, on that part of the food system.

Edwin: wow. I didn't even realize, and I guess this is something that is hidden in plain sight, to a lot of the consumers in terms of the, all those emissions that are being sent out there.

Wayne McIntyre: Yeah, absolutely. And I think we've become so used to the centralized dogma, right? And this whole centralization was pretty predicated on this idea that, what one, there's an unlimited supply of [00:06:00] resources that we don't have to internalize any externalities. The cost of polluting is zero. That labor is infinitely cheap and available. And we live in a world where none of those things are true anymore. And I think this is where suddenly. There is an opportunity to be actually more efficient economically, at least in some product categories. And I can talk a little bit more about that and deliver on the carbon at the same time. Even before we're willing to say, put a true price on carbon.

Edwin: Thinking about the products and where it starts when it comes to the robotics or what type of things could start what are the what are the things that are starting and make sense for the retailers, not the retailers the restaurants or the distributors.

Wayne McIntyre: We're very focused on packaged foods. That's our segment. Vertical farming, of course, was another segment where you started to see some decentralization. The challenge in the vertical farming sector, and I think we've seen the bottom really fall out of many of the decentralized like fully decentralized models for vertical farming is [00:07:00] the unit economics, right?

The real problem was throughput. And that's why we're laser focused on packaged foods. The package food manufactured foods because here's the place where you can get a lot of throughput. And actually we're even more narrowly focused than that. We're focused on products made of water. They're extremely heavy. They're extremely expensive to ship. So just to put that in perspective, logistics is the number one cost of a beverage for example, or a packaged ice product. And they're also extremely carbon intensive. So that's where we're really focused where we're shipping and middle mile transportation is really expensive and really nasty from an environmental perspective.

Edwin: So it's almost sounds like you're hitting in a high impact segment of this solution right now. And it could be something that inspires all, create within that industry or within this decentralization solution.

Wayne McIntyre: Absolutely. And I think there's been some negative fallout to the sort of decline of the vertical farming, at least temporary decline in vertical farming right now. And what we're really trying to do is prove there's a model that works. [00:08:00] And. Start with the place where you can win. And that's really how you start a movement. If you want to change a food system, there are lots of things you can do. You can take that whole supply chain and make each individual link more efficient. And one of those links is middle mile transportation. And a really important one is that electrification of the semi. And so Elon Musk's Tesla semi, that's a huge improvement by electrifying that key link, but we're trying to take it to the next level. We want to start a revolution, which means there's no chain at all. We want that chain to go away, right? We want to basically collapse that whole chain, put it right at the distribution center that vertically integrate everything in one place and get rid of the trucks completely. And by starting with a category where it makes sense where the unit economics work, that's how you start a movement. That's how you start a revolution. And that's our goal because ultimately we're not going to fix the whole food system. We'll do our best to do as much of it as we can, starting with foods made of water, but it's going to.

We need, what we really need to do is catalyze a movement behind what we're doing, a [00:09:00] decentralization movement around food production.

Edwin: It's inspiring. coming from the telecommunications industrywith the rise of AI, what I was, what was coming to mind as everything is centralized. If there's any like negative talk about AI is how much power it actually takes and then it's delivering, and if 7 billion people are trying to access the smart AI, it takes a lot of power, energy and people don't, it's like an abundance of resource, but really it's taking a lot.

And I guess to circle back to yours, it's maybe it's going to, your movement when successful, Wayne could inspire other industries. maybe there's a way to like, Bring back the windows server back to your office, right? Like you never know.

But anyways, that was Kim Tomat. I just thought it would, it was just interesting is how food industry went centralized and now to save the earth per se, you have to decentralize.

Wayne McIntyre: Absolutely. And you know what, and I think your example of the telecommunications industry is a great example right of networking as well. So when you have food as a network we're envisioning thousands of micro factories across [00:10:00] North America alone, each individually producing and, and you produce at the location that's the most carbon efficient and cost efficient.

That's how you fight climate change, but also it allows for resilience. So the first product we're making in the world's first autonomous microfactory for food down in Florida is actually packaged ice. And the Southern US it's an essential good. Like in a hurricane, they depend on ice.

It's monitored by FEMA and Homeland security. Ice is actually essential. And so if a hurricane comes through and takes out a portion of your network that's not the end of the world. When the rest of the network can pick up the slack. And I think that's our vision for a resilient food system and a resilient supply chain where, look what's happening right now in the Middle East in terms of supply chain constraints. When you have a joint pick choke point, when you have a single chain and a link breaks or there's a blockage, it has, huge effects because we're so dependent on that one chain, a network is just more resilient. And it's a better way, I think, to look at a food system.

Edwin: That's an amazing visualization [00:11:00] and really tying it to things that are happening currently. And it may have led into this question. And I don't know if you have more insight on it, Wayne, but what are the future possibilities for the solution for robotics and I guess food security as well? Like, how do you see that moving forward?

Wayne McIntyre: So really, this works very well in my opinion, for anything where you have a simple input supply chain. So what do I mean by that? If, if we're talking about, we're starting with packaged ice for a whole bunch of great reasons, it's just the best beachhead possible. It's the most expensive product to ship. It's high shrink, high waste. So there are a whole lot of reasons to start with this product, but beverage is a great next step. That's a multi trillion dollar industry. It's a huge waste of resources, a huge carbon footprint, but anything where you have a simple input supply chain. Is really, I think, important because, if you can make something out of a few small ingredients that can get to a point distribution center very easily or get to that local location really easily.

So water comes out of a tap, for example, [00:12:00] right? Or, if you're making, Packaging, for example, it's great. If you can have a circular source of packaging locally, or, you have a feed stock, like rolled stock, but you have to keep that input supply chain. Simple. That's really the, at the core of all this, because, or else you end up with a new problem, which is you've got a, get a simple downstream supply chain, but a complex upstream.

But that's in my opinion, probably about 25 to 50 percent of products on shelves could fit into that category of simple input supply chain.

Edwin: It's amazing. And it's things that, like I said, and it's just to reiterate is things that people don't really think about, and even the challenges of supply chain, because it's just you just for me, I just assume when I go to the grocery store, that stuff's just there. You don't think about these thousands of miles and this warehouse or this factory that's who knows where and this type of solution allows you to get more insight, more aware of what's happening And that's a definitely a start in terms of big change.

When I think about, what you're working towards and it's clear in terms of the [00:13:00] solution and the opportunities and also the vision that you're creating as a business leader, as with being a startup, being a founder what are some of the biggest challenges you're facing today presently and as you're working towards this?

Wayne McIntyre: I think, in the last 12 months, people talk about the, VC winter and, the challenges of raising funding. And when you're trying to change a food system, we can't do this with software alone. And I think there are lots of great software solutions and opportunities to improve some of those links when we talk about software. But if you're going to make a wholesale change to a food supply chain, you can't do it with software alone. And that involves. It involves CapEx, it involves infrastructure, it involves hardware. I think one of the change, biggest challenges right now, when you want to make a huge transformational changes, you need investors who are brave enough to play a long game.

You need investors who are brave enough to believe that, there's going to be a solution to the infrastructure financing and definitely one of the challenges we faced. And fortunately we found [00:14:00] some great investors, but also, we found some great supporters so that we could Make our business model CapEx light, but that was really difficult. It made a much longer process to raise our seed round than it might've been otherwise. So that's one of the big challenges right now. I think you have a big vision and an expensive vision. How do you find that capital, especially in Canada? It's much tougher here for those big plays.

Edwin: So to that point in your current challenges, I'd be curious to find out and to hear for those, finding those bold and courageous type of investors. What are they saying when they're saying no right now? What are they saying? And for those who believe in your vision, And supported your seed round and whether it was with financial support, or as you mentioned, there's a, you have a lot of supporters right now what are they hearing?

That's making them like, Wayne's got it. I'm going to follow him".

Wayne McIntyre: I think by, people always say packaged ice, like, why? How did you end up landing there? And I think it's really about unit economics. And I think that formula for success is [00:15:00] show unit economics, show a path to profitability, show a pick a segment where the model just works. Even if you'd rather be growing tomatoes if the numbers aren't there, you should be making ice, right? Cause that's a place where the numbers are. So I think one get the numbers, but ultimately we had defined and prove that we had the infrastructure capital. Partners that people in our case, it was a PE group out of California that people are excited to support this.

So once we build that unit then this next unit that can show the unit economics are viable and that's coming within the next within the next nine months that you can actually deliver. And I think that's something that's hard to find in Canada, that kind of early support. But if you look south of the border, I think you can show, Hey, look, here is somebody who wants to back this.

Here's somebody that wants to deploy a quarter billion or a half a billion dollars of capital and, put the put the infrastructure on their balance sheet. So we can be a technology company. I think that's how [00:16:00] you get people to support this. Cause when they see that, yeah.

All right, you know what? The whole process is thought out from unit economics to technology to the customers. And we've been really fortunate to have essentially the whole market pulling for us, including some of the largest retailers in the world. So we really, by picking the right segment, by getting the unit economics, and then showing, okay, there is a path to making this real. We were able to raise capital, but that's not a, that was a Okay. To be honest, a heck of a lot of work and to make pull that all together as a precedestartup.

Edwin: Wayne, thinking in terms of all that hard work and I guess just for it. And isn't this quote unquote, just for the seed around, but I imagine as you raise more. It would be similar and you'll have more of that data and more evidence.

Wayne McIntyre: Absolutely. When you're talking about deep tech and hard tech, there are these plate at the beginning, I think you can tell people on a vision, you can show, sell people on hypothesis. You can, get. CXOs from the industry to support what you, who believe in what you're doing and you [00:17:00] can raise that pre seed. I think when you're a, when you're getting ready for your A round and you have a piece of technology that, is on the right path and there's some certainty it's that gap in between when you're deep deck, hard deck, right? It's that gap between the pre seed and the A where you need to raid that seed.

That's the toughest, that's the toughest spot because it's a large seed round and you're not showing. A. R. Like a software company. You're not showing, some of the classic metrics that particularly in Canada, feces are used to seeing. And I think that's the challenge when you're doing something that in the deep tech hard tech world. That's the gap. And I personally believe it will get easier in some ways harder and others. There will be more ups and downs for sure. But in terms of able to hit the proof points. I do believe that it will be easier for us in our A round than it was in our seed.

Edwin: Yeah, I just for clarity in terms of, a lot for myself and perhaps some of our listeners as well. How do you distinguish the deep tech and the hard tech? And then you mentioned ARR, which [00:18:00] is, for those, annual recurring revenue like, how are you distinguish?

And then how is it different? Is it more of an outlay in terms of the revenue model that you guys are creating?

Wayne McIntyre: Yeah. When we talk about deep tech and hard tech, sometimes you're talking about, it's based, you're still at the basic science, the quantum computing type of example.

And there's a ton of research before, you're miles from a product and there's lots of R and D, basic R and D even to get there. And then there's the other scenario, which I think is more like us where, We're actually, we built, we're the world's first autonomous micro factory for the food industry. And the reality is the current technology on the market is so far from autonomous and it's too big and it's built for centralization, which means you have to do a lot. You can't just build one little box and add it into a system or one little link in the chain. We had to recreate a whole lot of those links. We had to do everything a full factory does and do it at micro scale. We had to build control systems, that are not just one piece of equipment at a time, all connected in series, but a master [00:19:00] control system that controls the whole thing.

Because ultimately we have to control thousands of micro factories, not even just the one. Pieces of machines. And there was, there's so much to build. There's so much technology that's where the deep comes from. That's where the hard comes from, because, an MVP isn't something that comes together quickly and you validate it, literally have to build. A replacement for an entire centralized factory from end to end.

Edwin: I get it. No, I appreciate you sharing that. And really the visualization of that. I want to turn to your vision and I know you've mentioned your vision and what you see the solution in the world could look like, but I just want to reiterate it. And very specifically what is the vision of the future that you are building?

Wayne McIntyre: So let's just start, maybe a little more narrow. Our vision of the future is very simple for products made of water. So every packaged beverage, packaged ice where we're starting, this never goes away on a truck. It never goes on my truck, right? It's produced locally. It's produced right in a [00:20:00] distribution center fulfillment center. And then it goes on a one step journey to the customer on an electrified vehicle, a neuro a local delivery robot, whatever that might look like directly to the customer. So one stop journey for food. No trucks, and, that's where we believe one, you eliminate food waste, you eliminate much of the carbon footprint of what you're doing, and also you eliminate cost because you take electrification, it's a hugely important, but it's not going to be cheaper. And a Tesla semi is not less expensive than a traditional semi truck, it's just better. But ultimately that's going to lead to inflation for consumers. And we really, we believe there's a vision where food is just cheaper, better, and greener. And that's really the vision for us.

Paul: Wayne, I love what what you're doing. It hits so many so many good good spots in me. And when you started, you said you're building a movement and you're starting a revolution. [00:21:00] And you definitely you got the tech, you got all the products there can do it. How do you go about the movement aspect of things and changing beliefs and perspectives, and just, it's like, there's people like us, we just go to the store and we think it's just there. And it's just drinks in a bottle, big deal, or, ice in a machine. But like, how do you get all the players that need to be involved on board?

Wayne McIntyre: It's a great question. when you're talking about the customer, who in this case is a food retailer, convenience store retailer or grocery retailer, that first step is they're already sold. They're looking to take control of their supply chain. They're looking to move up the value chain.

And when you can disintermediate CPGs, or you can disintermediate food producers and give them control of their supply chain. They're on board, They're already sold. I think, we have to deliver on that vision and prove it's possible. And we're really open. We share our model. We share the secrets like this input supply chain. We've even had large package goods companies reach out because we've been thinking so [00:22:00] much about micro factories. we're the first and, people, help us think about this we're open to sharing everything, all our learning, all of our thinkings about micro factory models, because ultimately we, we really do want this to be a movement.

We want to be a business. We want to be successful, food is such a massive, space, there's plenty of room for others to join us. And when we started, there was no one. We were the only company doing microfactories for food. We're already aware of a couple other startups that are entering the space.

And that gets us excited.

Paul: It can be a challenge to, to get things to change. And coming in with that, it should be cheaper, could be a big way to grab attention of course. And cutting out the middle people. What's the story you're telling when you approach these people?

Wayne McIntyre: So when we speak with a food retailer, we're First of all, we're focusing on the low hanging fruit and for that's the food retailer who has their own distribution capability. And that's true for most large retailers right now less so for convenience retailers, [00:23:00] but definitely true for grocery retailers. So we're focused on the grocery retailer right now because they control that distribution already. That makes it much easier conversation because it's just one party to talk to, not two. And when we're talking to them, we're talking about cost savings, cost reduction. So reduction of cost on shelf. And actually for our first product, we're talking about 30 percent or more cost on shelf production. These are massive numbers in retail. So if you can focus on a product segment where you can deliver those kinds of revolutionary cost saving numbers and offer sustainability surprise, it's not a particularly difficult sell.

There are other segments where it'll be harder. Right where baby, you've got to, and I think those are the ones you do later because, you're going to have to be shaving pennies again and really optimize to make the, the way you start a movement is, start with the place where it's easiest, start with the proof points. And again, packaged ice really is that place. And that's why we started there.

Paul: Oh, wow. That's great. And then are [00:24:00] you, like, how are you evangelizing this? Are you, do you tell the story other places? Are you doing things outside of the, outside of even just the industry or customers just to get adoption in the public?

Wayne McIntyre: So we've been very focused on our client base, we've been very lucky to win a lot of awards for sustainability product of the year. the trade press has been very supportive we've been getting the word out amongst retailers, because I believe commercial traction will catalyze this movement.

When people see there's a business behind what we're doing, but beyond that, of course, we participate in things like the climate solutions festival here in Montreal, things like collision in Toronto, these types of events where this is an opportunity where people can come together, can share ideas, catalyze, different thoughts.

And I've reviewed other startups who've come looking and saying, you know what, I really liked this model. When you bring your model to what we're doing, say bioreactor plus hyperlocalization, maybe there's a way to sometimes think [00:25:00] differently about the model because everybody's so focused on centralization that other people can take some of the learning and we do the same with everybody else.

Of course, we're learning from others on autonomy and automation as well. I think it's that cross fertilization that really allows us all to grow faster.

Edwin: I have a quick question and I'm really inspired when I love what you're doing. I think just for the greater of humanity too. I think it's really great. And, personally, I'm rooting for you, but I'm curious in terms of, that evangelizing or not evangelizing, but building that movement.

How are you keeping, how are you or the organization keeping that conversation alive with those who are supporting you?

Wayne McIntyre: Yeah. I think, activities just like this, being on podcasts, having those conversations, I think, staying part of informally, I think networking with people who are already part of this movement, one thing we are exploring actually right now and we haven't made a final decision to move forward or not, is do we actually create? A group, a network for people [00:26:00] focused on doing what we're doing. Cause as I said, there are already a couple of startups that have entered this space. I think there's room for more. Do we provide a platform for what could be our competitors in some cases, but I'm okay with that to join us and share information and I just think this pie is so big. That there's no need for us to be fighting over a slice right now. And definitely right now it's more informal. So I'm in contact with other CEOs and other entrepreneurs with similar ideas and even some larger companies as well. But I'm really am thinking about formalizing and building a network and a platform for us to connect and grow together.

Paul: You're in a prime position to be the category leader, to just really seize this this space, which, defines you as the go to, but also sets the stage for the development of the infrastructure, the ecosystem to deliver on this so that other people can play in the space. Yeah, like what you're saying, forming that that network of of people and you [00:27:00] setting that up and more evangelizing the category than the company, that's what we see in a lot of other other companies that really made it big.

Wayne McIntyre: And I think that's something what both of you are involved in as well, right? When you can, when it's one person telling a story or one company telling a story, it's not the same as a hundred companies or a hundred people telling the story. And it's not just a 100 X growth at that point.

I think when it's a hundred people or a hundred companies, it's a thousand times the impact, right? And that's how we 10 X our movement and 10 X this revolution.

Edwin: Yeah, that's amazing, Wayne. Sky's the limit. I know we chatted someone within the medical industry. These are big industries ripe for change and it takes leaders, founders, to be bold, courageous, and really put it out there Do a lot of work to show that there is, a desire for this. a solution and it's profitable for your clients. But ultimately there's a bigger goal we're definitely rooting for you I just want to get your final thoughts before we let [00:28:00] you go. And maybe I'm going to, I'm going to frame this up for you. Maybe your final thoughts for any founder CEO who are thinking that they're sitting on a movement or something that could be transformational within an industry what would you say to them right now?

Wayne McIntyre: I think, if you're a founder in that position, think big, right? Think systems level, don't think incremental chain, don't think of a link in the chain. I think, when you're really sitting on that, that, that massive chain, think big, think about how you can, get rid of that whole chain or change the system.

Because I think, we're often constrained by the way things are done now. And then it's much easier to. Take one step in the way things are done now and make it different. But when you make, one change in one link or one step, the system remains the same. It's just that little bit better. And so I would encourage those founders who are sitting on an opportunity like what you just described. Is are really to think at the systems level and think about, tearing the whole [00:29:00] thing up and starting from scratch because that's ultimately what we're looking to do for our food system.

Edwin: That's amazing, Wayne. I do appreciate your time. Let us know how we can support you, or maybe we have to get you back on the podcast when you're get an update in terms of the movements. But we'd be happy to have you. But again, thank you for joining us on the business leadership podcast.

Wayne McIntyre: Thank you gentlemen for having me and and giving us a platform to to promote our vision and our movement. So thank you both.

Edwin: That's it biz leader. Thanks for joining me on this special episode of the business leadership podcast. Part of our future narrator mini series. Recorded at the collision conference. this was an amazing conversation with Wayne. Exploring how Relocalize is pioneering. A decentralized approach to food manufacturing and its potential impact on sustainability. So for more links to all the resources that we discussed to connect with Wayne, And to learn more about the future narrative project. Please do checklist show notes in the app [00:30:00] that you're listening in right now.

And if you are interested in reading more about Wayne and the other amazing business leaders that we profiled. Please do join our wait list for an upcoming book.

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