Executive Roundtable: Commercial Refrigeration
Originally published: 04.01.21 by Pete Grasso
Dealing with uncertainty, increased demand and virtual training lead the commercial refrigeration sector.
Like many aspects of the industry, commercial refrigeration has experienced a shift in focus during the past year thanks to the COVID-19 pandemic. Uncertainty in the food service industry and increase demand for refrigeration in supermarkets — as well as cold storage and transportation for coronavirus vaccines — have challenged refrigeration manufacturers.
When I last conducted a Commercial Refrigeration Exeutive Roundtable back in November 2019, the discussion revolved mostly around regulations, new refrigerants and adapting them to new, efficient systems.
I recently spoke with a handful of the top executives I interviewed 18 months ago for that Executive Roundtable to revisit this market sector and see just how much the COVID-19 pandemic not only affected their businesses, but also the industry.
This Executive Roundtable panel included Drew Tombs, president of AHT Cooling Systems USA; John Galyen, president of Danfoss North America; Dave Bersaglini, vice president and general manager, refrigeration for Emerson; Kerry O’Brate, aftermarket sales senior manager at Nidec Global Appliance and; Dustin Searcy, division marketing manager for the Sporlan Group of Parker Hannifin Corporation.
What’s the biggest challenge in today’s refrigeration market?
Bersaglini: One of the biggest commercial refrigeration challenges we face in the U.S. is the complexity of aligning equipment and system choices with what is suitable for a specific region. For example, due to the regional variances in environmental regulations, operators in California will have completely different specifying criteria than those in the Midwest.
Understanding where a refrigeration system is going — and what the current and likely future regulations will be for that region — are becoming primary criteria in refrigeration specifications. As a result, an increasing variety of refrigeration system options are designed to meet diverse operational scenarios.
Galyen: Refrigerant and regulation changes remain the biggest challenge. Generally, the refrigeration market is moving towards lower global warming potential (GWP) refrigerants, like transcritical CO2, flammable and mildly flammable refrigerants, and low charge ammonia. The AIM Act, which was signed into law at the end of 2020, should provide the refrigeration market a solid regulatory framework to transition to the new generation of low-GWP refrigerants. In California, OEMs, component suppliers, end users, advocates and regulators came together in 2020 to produce a regulatory solution that worked for most stakeholders. Danfoss expects the market to do the same when working with the EPA on federal regulations stemming from the AIM Act.
O’Brate: To get up-to-date and accurate information to contractors and manufacturers about the transition to natural refrigerants from HFCs, a work we have been consistently doing for the last few years and in which we plan on keep evolving. While the majority is switching to R-290, some have restrictions on this refrigerant due to the specific application.
Tombs: I think the biggest challenge in refrigeration is the ongoing transition to Low GWP and Energy Efficient architectures that are just starting to impact decision making — especially in US Climate Alliance states. Combine this with food retailer’s changing landscape with regards to the COVID-19 impact on consumers shopping behaviors, all have influence on the types of equipment and systems OEMs need to bring to market.
Searcy: Supermarkets are developing plans to comply with future GWP limits and refrigerant changes that will impact their stores. Many have a large installed base of equipment in existing stores that adds complexity and must be accounted for in their plans.
How has the COVID-19 pandemic affected business?
Bersaglini: COVID-19 has affected the food retail business dramatically, starting with the unprecedented spikes in demand that retailers experienced in 2020. Now that demand has leveled off and the pandemic appears to be waning, many retailers are reflecting on the challenges they faced in 2020 and making proactive plans to upgrade their supply chains and fulfillment channels.
One common theme that has emerged is retailers’ desire to take control of their own destinies by reducing reliance on third-party logistics (3PLs) providers and food storage warehouses and bringing these critical functions in-house. Many were caught off guard by the demands of 2020 and simply do not want to be put in that position again. As a result, many companies are building new food storage warehouses in hopes of shifting the balance of control into their own hands while leveraging 3PLs to a lesser degree.
Galyen: Our first priority has been keeping our employees safe and — at the same time — ensuring we had business continuity to support our customers who are working in critical infrastructure like food production and food retail. We’ve been able to meet demand and we see the market growing so we’re optimistic about 2021.
O’Brate: Since 2019, after being acquired by Nidec Corporation, Embraco has been integrated into the Nidec Global Appliance division. So now Embraco refrigeration solutions for the residential and commercial cold chains are a part of the division’s portfolio, which is also composed by Nidec motors for dishwashers, washing machines and dryers, as well as US Motors brand solutions for residential and commercial HVAC systems.
We set up a global committee that, in partnership with regional ones, implemented procedures and actions that enabled business to continue running while ensuring communication, cleaning and hygiene routines as well as the establishment of testing and social distancing protocols. This scenario allowed the company to keep its commitments with customers while putting the health and safety of our people in first place.
Tombs: The impact of COVID-19 has mostly been a delay to projects — especially new construction. Otherwise, I think the situation in the last year as expedited changes in Food retail that will force OEMs to develop and refine new technologies and learn to adapt to faster remodel and retrofit business in the next few years.
Searcy: We have seen COVID-19 impact our customers’ businesses as demand and shopping patterns were forced to change. Online grocery pick up and cold storage has shown to be a growth area over the last year.
Has there been an increase in demand for refrigeration during the past year?
Bersaglini: With the onset of the pandemic in 2020, many retailers temporarily paused any plans for refrigeration system remodels and retrofits while retailers did everything in their power to keep existing systems running during this period.
Today, many of these retrofits and remodels are back on the table, especially in California where proposals mandated by the CARB will take effect in 2022. There, retailers are evaluating strategies to lower HFC emissions, whether that’s by increasing leak inspection, reducing refrigerant charges or installing new lower-GWP or natural refrigerant options such as self-contained cases, full CO2 systems or more distributed equipment architectures.
Galyen: Over the past year, refrigeration demand has significantly evolved. A study by the National Restaurant Association found that 17 percent of restaurants have closed permanently or long term. The industry is resilient, however, and we have seen a shift in how refrigeration is being used; more than any other year, grab-and-go and drive-thru service, outdoor dining, online order and delivery and ghost kitchens have made up a significant portion of that demand.
In the food retail space, end-users were focused on installing plexiglass, spacing protocols and cleaning upgrades to meet COVID-19 requirements, so demand for refrigeration systems and controls upgrades had decreased over the past 12 months.
O’Brate: There has been a sharp increase for refrigeration in food retail, medical (with special attention to vaccine cooling), and home appliance applications, and a decrease in refrigeration applications for the food service industry. This was all brought on by the unprecedented pandemic the world lived through in 2020. Despite the large variation, since the final months of last year, we have seen a sharp increase in refrigeration products demand overall for all industries.
Tombs: Our demand remained steady and growing through 2020 and a strong forecast and pipeline heading into 2021. For our core customer base, food retailers faced considerable operational challenges and shifts in 2020 and we believe there will be a focus shifted back to capital projects — with a focus on remodel and retrofit projects.
Searcy: At the start of the pandemic demand reduced sharply but has since rebounded in many areas and demand continues to be strong.
What kind of challenges have you seen as a result of the COVID-19 vaccines need to be stored frozen?
Bersaglini: Initially, with the Pfizer vaccine in particular, the issue was meeting the Centers for Disease Control and Prevention’s (CDC) guidelines for ultra-low-temperature storage — which had temperature holding requirements between -80C and -60C. This presented a significant challenge to the vaccine cold chain, which relied on dry ice and other types of ultra-cold storage containers to meet these temperature requirements.
Recently, the U.S. Food and Drug Administration (FDA) announced that the Pfizer vaccine can now be transported and stored at conventional temperature ranges commonly supported by pharmaceutical freezers for up to two weeks. This means that once the vaccine is delivered to a health care provider, they won’t need specialized refrigeration as long as they use it within the first two weeks.
Galyen: The extremely low temperatures required for long term storage of the COVID-19 vaccine are challenging but are typically beyond the operating envelope for many of our refrigeration component solutions. We are, however, starting to see temperatures needed for long-term vaccine storage evolve to a range where cryogenic systems are not required.
The distribution of the vaccine is able to be conducted at typical commercial refrigeration temperatures, and we have been able to utilize the existing North American cold distribution chain that placed increased demand on commercial refrigeration equipment due to the pandemic.
O’Brate: Since the first studies for vaccines showed up last year we have been running against time to help our customers prepare for when the vaccines started being delivered. The cold chain must be ready to maintain the vaccines’ effectiveness throughout transportation and distribution until administration, and this is where refrigeration technology together with smart designed products becomes a life saving issue.
Tombs: As part of the Daikin Group, AHT Group is working to support cold chain initiatives in all markets to improve the efficiency of deliveries and storage of vaccines. Locally, AHT USA has not yet been part of the delivery and storage but are looking at technologies with the Daikin Refrigeration Portfolio where we can make a future impact.
Searcy: The ultralow temperature requirement to transport and store one of the vaccines presented additional challenges but it appears dry ice and low temp refrigeration systems have been utilized to meet temperature requirements. The other vaccines are transported and stored at freezer temperatures that were previously used for vaccines.
Moving forward, what type of training and education will you offer to contractors?
Bersaglini: Emerson Educational Services has been committed to helping our customers continue their professional education during the pandemic. Though our in-person training sessions are currently unavailable, we have offered a wide variety of free online training courses since April 2020 and will continue to offer free online learning access through June 2021.
Of course, we hope to resume our comprehensive in-person training curriculum when pandemic-related restrictions get lifted. We also look forward to relaunching our mobile CO2 Booster training unit, which is designed to give contractors, manufacturers, wholesalers and end users a hands-on experience of what it’s like to work on a CO2 refrigeration system.
Galyen: Prior to COVID-19, we were already focused on virtual and online training. During this pandemic, we have expedited our virtual education training program, and now much of our training can be accessed online and is much more flexible and interactive. We expect to continue with online and interactive training modules as their possibilities and success have been proven over the past year.
We do see the need for the return of in-person classes, but they will be more focused in their target audience and material.
O’Brate: This year we plan on offering more webinars and technical content through online channels, like social media, Embraco’s website, the Refrigeration Club blog and the brand’s channel on YouTube. We even have made a training videos playlist in celebration of Embraco brand’s 50th anniversary, which we celebrate this year. As for in-person classes, we are waiting for a clearer picture of the situation regarding social distancing recommendations in the US, so we can plan our actions.
Tombs: AHT USA continues to develop and enhance our training programs with a focus on remote learning. But throughout the last year our field service and project managers continue to operate in the filed with our customers directly — both in delivering new projects, training third-party vendors and supporting start-up and commissioning activities for new stores. In the coming year we will also begin to consider training at our facility as a way to further bring opportunity to third-party vendors to our technologies and innovations.
Searcy: Parker Sporlan began a webinar series focused on refrigeration systems, highlighting system components, sizing and troubleshooting about 18 months ago. As COVID-19 caused in-person training to be canceled, we increased our webinar frequency and now have over 20 webinars recorded and available for customers to access on our website, sporlan.com.
When last we spoke, we talked about the evolution of smart controllers for refrigeration units ... how has this segment continued to evolve in the past year and a half?
Bersaglini: From Emerson’s perspective, we continue to improve on our refrigeration and facility management controllers to help retailers simplify the operation of critical store systems and leverage the power of strategic data insights.
We recently launched the Lumity E3 supervisory control, which is built upon the Lumity supervisory control platform to deliver the next generation in facility management and refrigeration controls.
Galyen: The continued evolution of smart controllers for refrigeration units has been driven by end-users as a result of conditions shaped by the past 18 months. Now, end-users are looking for more efficient ways to control their refrigerated cases and protect their refrigerated products.
With case controllers, end-users and technicians have remote access to their refrigerated cases, allowing for more insight into how their refrigerated units are operating.
Adoption of technology, such as Bluetooth and Wi-Fi access, in refrigerated units is becoming more popular, allowing ease of access and visibility to these refrigerated units.
O’Brate: It has continued to evolve at an increased rate, despite the pandemic, because of its contribution to medical applications as well as the need to adapt to new energy savings requirements from end users. Within the Embraco portfolio, last year we continued to expand our range of smart controlled solutions and have even presented a series of case studies with customers achieving results as high as 40 percent in energy savings.
Tombs: Remote Monitoring to support Preventative Maintenance and Predictive Alarm Management remains a focus of not just AHT Group but Daikin Refrigeration. We are working on enhanced controls and platforms to help simplify the experience for our customers both with our OEM Suppliers and internally through R&D projects.
Searcy: Interest in electronics and case controllers continues to grow. This will continue to be a trend, especially as CO2 refrigeration systems become more popular. Also, the benefits of remote monitoring and the ability to pull data without being onsite is a huge value to contractors and supermarkets.
Looking ahead, what excites you most about this industry?
Bersaglini: Our industry is evolving so quickly that we have an amazing opportunity to work with stakeholders at every level — from contractors, engineering firms, original equipment manufacturers (OEMs) and end users — to help shape the path forward. The ability to use data as a strategic advantage is becoming a top priority for all stakeholders to help them better understand new ways to optimize equipment performance, achieve sustainability initiatives, improve energy management, and drive a variety of other operational objectives.
Galyen: For all of the many evolving challenges facing society today, it feels as though there is equal room for opportunity. I’m excited by the instrumental role our industry can play in shaping the transformation ahead of us and improve quality of life — from reducing greenhouse gas emissions to improving building energy efficiency, air quality, and performance, and ensuring a safe, fresh food supply.
O’Brate: This last year has made us realize how important the refrigeration industry is for the world, not only for quality of life but even to try and bring us back to a sense of normality within the pandemic by allowing a safe distribution of the vaccines at a global scale.
What excites me the most is really spreading the word on all the technology and new product launches that we have not been able to properly expand on as we had wished in 2020, given the overall travel and access to customers constraints. I’m not only talking about the migration to R-290 in the light commercial refrigeration, but also the migration to variable speed compressors, which have a great impact on reliability and energy consumption. So, we have a great journey ahead in these two areas.
Tombs: I think the next 3-5 years will bring about significant change in the acceptance of new refrigeration architecture platforms to support Food Retail and other Refrigeration applications. Daikin Refrigeration and AHT Group are committed to R&D and localization for all markets with a focus on commercial, industrial and transport refrigeration to help support our customers through these changing times.
Searcy: Technology adoption is growing in the commercial refrigeration market. I’m excited to see new technologies like predictive diagnostics, analytics, and cloud computing grow in our markets. These new technologies will help us make better decisions and resolve problems more quickly.