Is Chitin the sustainable alternative to Polystyrene? / Cruz Foam with CEO John Felts

https://cruzfoam.com/
hello@cruzfoam.com

What is Cruz Foam made from?
Cruz Foam is a certified compostable, patented formula utilizing the unique ingredient of chitosan derived from chitin (sourced from seafood industry waste, largely shrimp shells), as well as starches and other bio-based plasticizers.
Is this the solution to replace polystyrene (styrofoam)?
Are surfers the heroes we have been waiting for to implement sustainable packaging?
https://www.linkedin.com/in/john-felts-7a784936/

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https://ororapackagingsolutions.com/

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https://www.amazon.com/dp/1329820053/ref=as_sl_pc_qf_sp_asin_til?tag=corygat

https://www.linkedin.com/in/cory-connors/

I'm here to help you make your packaging more sustainable! Reach out today and I'll get back to you asap.

This podcast is an independent production and the podcast production is an original work of the author. All rights of ownership and reproduction are retained—copyright 2022.

Transcript

Cory Connors: 0:34

Welcome to sustainable packaging with Cory Connors . I'm very excited for our guest today, Mr. John felts, who's the co-founder and CEO of cruise foam. How are you, John?

John Felts: 0:44

I'm good, Cory . Thanks for having me.

Cory Connors: 0:45

I'm excited. Thank you so much for taking some time. What you guys are doing is really innovative in the packaging space. And then in our interest of our audience, the sustainable packaging space can you tell us a little bit about how you got into packaging and kind of how you started this great company?

John Felts: 1:02

Yeah. I'll give you kind of the shorter version. So my. My background's in chemical materials engineering. I grew up in California and I spent a lot of time in my early career doing environmental remediation and whatnot with in my old past life, you could say. And when I went back to school, I met my co-founder Marco Rolande and got exposed this material called chitin. And at the time he was doing a lot of research, kind of higher-end research you know, army DARPA funded projects for the university, but we really connected kind of. Around the idea that this material had a really strong potential for a bioplastic, but nobody was really looking at, you know, at that scale. And nobody was really looking at things beyond films are kind of bottles and the typical kind of plastic sheet kind of immediately go to in your head. But what we kind of had our light bulb moment around was the fact that we both love the ocean. We're both big surfers and we kind of had this combined moment where we thought. As surfers, you know, you're so tied to the ocean. You love it so much, but you're riding around on this piece of trash. And ironically enough, this piece of trash is plastic foam. And it was really this moment where like, why couldn't this be something we look at for chitin in the application. And that's really where the first, you know, Fruition at this company or idea came together and we came down together, me and him to, to Santa Cruz and kind of developed the early technology here at the university. And we tackled surfboards for about a year and gave it a pretty good go. You know, it's where a lot of the passion originally lied. But when we really looked at why we were starting this company, why we saw it to be so important, it was really around the idea of plastic and getting rid of the enormous amount of, you know, essentially trash we have that doesn't go anywhere. It sticks around for 500 or 1000 years. And through that, we kind of pivoted and really identified to have the impact. You know, we want it to, as a company, it was clear that this was in packaging and when we died, didn't even more, it became even more apparent that. Nobody was looking at foams, at least in a really scalable, effective way. When you look at, you know, the big targets like styrofoam or EPS . And that's when we pivoted, we went through the national science foundation and really found a really strong fit for our technology. And it was definitely the right choice because it's, it's it's, you can tell all the demand and the, and the excitement around what we're doing.

Cory Connors: 3:22

Absolutely is it, and it seems like to me, that surfers are trying to save the world. I'm I'm totally impressed. I just interviewed Sam Boex from Flexi-hex . Oh, nice. Yeah,

John Felts: 3:33

it's awesome.

Cory Connors: 3:34

And he's him and his brother are surfers too, and they that, that was their impetus for starting their company of sustainable packaging. So thank you to the surfing community. All the surfers are always have the best intentions for the planet. And I just, I love that. That's really cool. It's a cool, it's a

John Felts: 3:55

cool time.

Cory Connors: 3:56

Yeah, that's neat. So can you tell us a little bit about Cruz foam and you know, how it's a natural alternative to oil polystyrene and foam.

John Felts: 4:07

Yeah, for sure. So Cruz Foam itself, you know, we're kind of looking at, you know, a billion as company around, you know, really been a leader in the biomaterials, you know, technology development. How we can look at, you know, all natural solutions to replace, you know, create eco-friendly solutions and replace, you know, petroleum-based plastics. And, you know, clearly the, the first thing we're looking at tack was with, you know, our compostable bio benign protective package. To, to replace bene polystyrene or polyethylene and polypropylene, and really what we saw when we looked at the landscape around foam, which I kind of touched on nobody really finding good scalable solutions, but even more focused on the protection side, you know, cold chain food delivery. I do think the arson good foam substitutes and solutions in those space. But when we looked at, you know, heavy objects, electronics, expensive, They're still using enormous amounts of EPS. One company, two companies were we're actually, you know, working with right now. They use 80,000 tons plus a year. And so you see, and they're desperate. They want to change, but there's just, hasn't been a good solution that, you know, it's usually performance, scale and cost and they all kind of work together. And they're just, there's always been a breakdown in the sustainable options that they've had. And. And that's when you see this coalescence really coming together between our technology and the need in the marketplace where the, the market fit and, and how we see this getting into the commercial scale is, is very viable at this point. And somethings we're, we're very excited to start tackling.

Cory Connors: 5:36

Yeah. I saw you on a tech crunch recently and that was a really cool panel you did, was that a. Who is the company on there with you? A Whirlpool. Wow. What a massive you know, he was talking about how many

John Felts: 5:52

th the thing you said about stuff like three dryer, every three seconds or something like that per second. Conomical it's astronomical. And that's when you see it, that's when you see that these guys, and we voiced it very well and something that I think is awesome. When you look at the protection of these, you know, more expensive, durable products, there is a lot of embedded carbon in those products themselves. And so understanding how to not lose that, but still make a switch to a more sustainable alternative and packaging. But keeping that perspective in mind is something that's also very important and something, we working with brands like Whirlpool and, and these, you know, early movers and adopters is going to be key to seam, you know, technologies like our scale effectively. Cause. You need buyer, you need people that get in and want to make.

Cory Connors: 6:40

Well, he seemed very eager to move forward with you guys and I can see why it works. It's a sustainable and it's replacing in my opinion a less sustainable option. So can you tell us like a little bit more of the technical side of things? Is, is the material, is it compostable? Is it biodegradable? Is it recyclable? What's what's the end game for after a,

John Felts: 7:02

you. Yeah, no very good question and something that I think a lot of people are. Evolving and learning about as we really start to see new technologies come into this space. And when you look at ours where we saw a lot of potential and a lot of growth and a lot of ways to give back, and then life was around composting. And you know, our material itself is, you know, a combination of this biopolymer chitin, and then other, you know, bio-based usually renewable waste streams, things like starches, low grade fibers other kinds of additives, but it's really finding a way, which we. Create unique formulations of these different combined materials that can scale effectively, but also have a viable and of life. And when we look at ours, we kind of moved away from recycling at the beginning because, well, I think there's a lot of limitations around recycling and I think composting has a lot of growth, potential, and a lot of energy behind it. Not only in the viability at scale, which hasn't been explored yet. Well enough, it is changing legislation, definitely going that way. But I think it's also a way to really look at a viable way to control something as grand, as packaging and understanding to really dispose of something that's going all over the globe, all of the world. It's really important to really tap into all those different end of lives. And for composting, you have regular composts. And I think it's really interesting that this idea of a rent anaerobic digester. And not only getting good fertilized content, which our material actually is fixates nitrogen. It's a very good fertilizing material. We proven that in tests, but what's even more interesting is this idea of anaerobic digestion where you can get biomethane. And the idea is capturing that biomethane a to not let it go in the atmosphere, because then it's just lost right. Also by capturing it, creating renewable energy gas to actually. Power and run the municipality municipal trucks that are picking up the trash. So it's just you telling you look at that story and you think that just makes sense. And you know, and so that's really where we see this idea of is it compostable is a biodegradable. I may not tackle that. Cause that's a very interesting conversation. When you look at legislation, I would say in all intensive purposes, our material is definitely biodegradable, but when you look at the industry and how it needs to be classified, definitely compostable and we'd love it to go anaerobic digestion.

Cory Connors: 9:18

That's a great answer. I think because there are still a lot of questions and there are still there, there is still a lot of work to be done by municipalities figuring out, okay, how do we work with extended producer responsibility and Make sure that what these packaging companies are producing, like, like yourselves we'll we'll be reused or recycled or, or biodegraded, or like you said, digested and turned and turned into something that is another fuel source. What a brilliant concept. I

John Felts: 9:53

mean, you look at Europe and they've been doing this for a while. And there's this company that's doing it like modular for, I think it's, you know, like not sewage, but like sanitation and, and toilets, but it's like, it's this company called home bio gas and they have this modular system, that's doing it in people's homes. And we're like, this is, this is it. Like, this makes so much sense. And it's like, why not expand that type of idea and really start looking at the other materials that other applications. Well, that has a viable way to take some of that waste and some of that stuff. And actually we use it, turn it into something valuable. And so it's very exciting and you can look across the whole ecosystem and you see everybody trending in the same path, but now it's really understanding how do we come together and make this happen.

Cory Connors: 10:34

Yeah, great idea. And you know, when most people get their larger appliances delivered nowadays, they don't have pickups or, or a cube truck to go pick it up themselves and they're heavy and I get it. But what I see when, when you get that delivered is the delivery service removes the packaging, and that could be an opportunity. For a consolidation of troopers on Cruz foam and then, and then taken to a a special digester anaerobic digester. So that makes sense. Yeah, I won't,

John Felts: 11:12

I won't give away all of our secrets, but I can tell you right now we're doing a lot of work and exactly what you just said and really proving out that. I mean, we have, obviously, you know, you look at companies like Whirlpool and others that do exactly, like you just said, they'll drop it off and they take the trash. With the packaging and it's very, very important for them. How do they get rid of in a way that makes sense for their business model? How can they really get value out of that? How does that not add extra cost for them? And then you have this real growth around you. Not only composting, but some anaerobic digesters, we've gone through one in slow. And, you know, toured the whole facility and chatted with them about all of what we're thinking and how can we start really implementing those doing early pilot and get into scale and really showing the viability. So when we see legislation coming through, when we see these bands or these EPRs, these companies like Whirlpool and. No, that there's an answer out there. That's viable for them. And I think that's why there's been a lot of disconnect. You know, when you look at all the different stages along the value chain, some things are made in a closed chamber and you don't really look at what's the impact. How does this actually get implemented? How is this actually going to be executed? And I think when we're really trying to do a step back and be a facilitator and catalyst to bring all these stakeholders together to kind of be a real. You know, leaders of war, but really kind of, you know, a model in a way to show that this works and it's viable and it's economical and actually adds value for all the stakeholders along the value chain. And that's what I think is really important to see this happen.

Cory Connors: 12:36

There has to be someone like you guys that, that guides the way and tests the model. So thank you for doing that. Well, I appreciate it. It's so critical these days. So many people are, oh yeah. I'd love to try something sustainable, but it costs five X or it's or it's we've tested it and it's not water resistant or we've tested it. And you know, there's always caveats. There's always things that people come up with. And I think what you guys have as a one-to-one replacement potential, that that could be a game changer.

John Felts: 13:08

Yeah. And it's, it's, it's a hundred percent that, you know, cause there's always going to be levels of evolution. The technology, you know, the startup term is MVP, minimal viable product. And so it's understanding where that MVP fits in what customers and what different parts. Are engaged in to help you develop that further. And, you know, people like, you know, for thinkers, like Whirlpool, understand that growth, understand that development. But I think I said to my tech crunch, you know, it's not going to be a silver bullet. Yes, you need to be pretty close, but it's not going to be exact costs exact performance in already at scale around the entire world a week after you come up with the technology. I mean, there's, there is a stage

Cory Connors: 13:47

growth into the market.

John Felts: 13:53

And it could, I don't want to say it's ignorance. Mission's not unfamiliarity, but it's just, it's understanding that. And it's understanding that's how it is across the board with almost any technology and packaging is challenging because of the sheer, you know scale across the entire world it's everywhere. And so it becomes a bigger picture when you are working with global brands and understanding how that action is to work on that global scale and, and implementation. And so for us, We really do want to see that happen. And that's one of the ways we've from the core, not only understanding the cost and the performance, but you know, the scale and really finding a way that we can facilitate that adoption with the, you know, the more dropping technology where we can run with existing extruders, running things that you manufacturers and really constantly, yeah. Constantly. Not evolving constantly doing more R and D to learn more manufacturing techniques. We can broaden our technology beyond just packaging. Maybe it's going to go to something beyond that, you know, next year. And that's where I think when you look at materials, it's having that understanding and that kind of approach is key. And that's something we're trying to really, you know, have the core of our Texas.

Cory Connors: 14:59

I get asked all the time. Why is it taking so long? Why, why are, why are these sustainable alternatives taking so long? And the answer is the plastics industry has had decades to perfect what they're using and billions of dollars and you know, thousands of tens of thousands of scientists we're working on shoestring budgets and oftentimes minimal staff. So. It's just gonna, like he said, it's gonna take a little bit of time, but it'll be

John Felts: 15:28

worth it. And that's, that's a very good point because that's what I, you know, I it's something maybe often overlooked is I think like the earliest plastics were like discovered in the fifties and sixties. I mean, it's like over a half a century realistic. Yeah. It's definitely something, but, but that's where we see the partnerships and really understanding how we can collaborate is really what's gonna accelerate that. And that's really been our.

Cory Connors: 15:54

I love this idea of working with the people that are making polystyrene now because they've got all the infrastructure, they've got the staff, they've got the equipment. That to me is a slam dunk. If you guys could perfect that.

John Felts: 16:08

Yeah. And it's, it's exactly the reason you said now I've touched on it. These guys, I, you know, I shouldn't say they all want to switch because that's maybe a little presumptuous, but I would say the majority are definitely desperately looking to switch and that's because simply the consumers I've had enough, you know, you get, especially during COVID it's been, it's been so crystal clear, I order like two chairs or something. All of a sudden, I can't put any more traction. My trash man, because it's now filled with EPS and I've had points where it took me three weeks, three weeks to get rid of all the EPS I got just because I had to throw away regular trash. I wasn't EPS and that's in my garage. That's in my house. It's just laying around, gets broken up, starts flying everywhere. And it's just a pain in the end of the button. So I think a lot of people that are ready for that switch, I think it's me look at the manufacturing. The time is now and the legislation's quick catching up. So it's definitely. It's time.

Cory Connors: 17:04

And for people listening that don't know what EPS stands for, it's expanded polystyrene. It's those white circles that fly down the street. When you break up your, your packaging and they drive everybody crazy. So that's six EPS, polystyrene, styrofoam, whatever you want to call it. Yep. So speaking of timeframes, what, what are we looking at here from Cruz Foam ? What, what's your.

John Felts: 17:31

Yeah. So we got a ton of exciting, fun stuff happening right now that we're hoping we can make an announcement and then, and let some of it out into the world here in Q4. But we're really, really heavy engaged right now. We're building out our in-house, you know, larger production facility here in Santa Cruz. We're engaging with some partners across north America looking to set up, you know, first scale manufacturing, operations and strategic locations with our first customer. Looking at the kind of appliance space. And we see that really being in a place to launch in the market around early Q1 next year. And so we're really excited with some, a pretty healthy demand. No doubt. We're, we're ready to see this really start getting on the marketplace and having the impact.

Cory Connors: 18:14

Well, congratulations in advance because you guys are doing great things and it takes guts and it takes tenacity and it takes all the good things that a good business people have so well done.

John Felts: 18:27

I appreciate it. And I, I have to say. It's been, it's been a journey, but it's something that has definitely not been solely me by any means. I, I would say the team that we've built here has been absolutely incredible and the developments they made over the last year and really putting us in a position that I think has really differentiated us from any of the other kind of sustainable films you've seen and, and the expertise and the enthusiasm we have as, as a core is I think in a really propelled us into something special. So it's, it's been a fun ride.

Cory Connors: 19:01

Yeah. I've had the pleasure of communicating with Leslie Nakajima that your, your CMO. And so I can attest to that. You've got a great team already around you. That's nice. And it's impressive to see when you're all working together. Good job. So what, what's the best way for people to get ahold of you guys? Website.

John Felts: 19:21

Yeah. So the website is pretty straight forward www.cruzfoam.com . All the tags on Insta and LinkedIn, Facebook, I believe are the same cruise foam or at cruise thumb. I believe if you want to get to us by email it's hello@cruzfoam.com pretty simple. Yeah, I think there's a number on our website. I can't remember off the top of my head. I'll be honest, but you can find that we're probably the least one that we respond to. I'll be honest in this day and age, but that's also available if you'd like to shoot us this local.

Cory Connors: 19:50

It's cool. When people still have a phone number, I think. You don't see it very often, but why not? Why can't, why not?

John Felts: 20:00

And one of the things you were in manufacturing, you know, sometimes it's really helpful to get on the call and get on the phone. So for sure, it'd be a bit, you know, speed things up.

Cory Connors: 20:08

Anything else you want to speak to before we end this?

John Felts: 20:13

Oh, no, I think the biggest thing is, you know, I really appreciate having us on, I think, you know, it's really important that, you know, we, we really started having more conversations around this space and really understanding, you know, the, the, the penalize tech crunch, you know, we have, I believe it's sustainable packaging, coalition, advance, SPC advances coming up. I believe I'm doing a panel there with temper packages on that one as well. I, I had a panel with the temper pack founder, so I just think, you know, really highlight and understanding how we can really keep these conversations and really having, you know, important discussions around how we make this viable and that. You know, see the future change for the better, because I think we've all all around the globe or are ready to just stop getting giant packages with those little beads in it. I think we're ready to, and we have the technology. We have the, you know, the innovations it's just, let's make it.

Cory Connors: 21:00

So I agree. What's the best place to surf in Santa Cruz.

John Felts: 21:04

Oh, that's, that is a very subjective question. This is going to sound very strange, but because of the place that's really close to my work, my favorite place is actually ironically called John street. So it's easy for me to find and know what that one is, but no, you know, it depends on if any of the west or the east side, my work on the west side. We've got a couple of good spots over here. Swiff you know, the lane and in John street are kind of my go-to

Cory Connors: 21:30

that's good advice for the surfing community. We want to support all the surfing community because you're all doing such a good thing for sustainability. We appreciate it. I'd like to thank Landsberg ORORA for sponsoring this podcast, listeners, please take the time to review and recommend this to your friends so we can make more great episodes and spread the word about sustainable packaging. Again, this is Cory Connors and thank you so much for your time, John. Appreciate it.