I had the chance to sit down 1on1 with TemperPack co-CEO Brian Powers. In our conversation, we talked social entrepreneurship, venture capital and the future of sustainability.
Last month, the sustainable packaging start-up closed a $22.5 million Series B, led by billionaire Steve Case‘s Revolution Growth, bringing its total funding to $40 million.
The TemperPack story
TemperPack was founded in 2015 as a partnership between two friends from Maryland and a third colleague from school. The company was born out of a desire to reduce the amount of unsustainable packaging that correlated with the growing world of e-commerce delivery.
Brian Powers and James McGoff, co-CEOs of TemperPack, were those two friends from Maryland. And their founder story may surprise you. Powers and McGoff have been best friends since middle school. Yes, they got pimples and ate at the lunch table together. The two boys possessed an entrepreneurial spirit at a young age, with the idea of starting something always in the back of their minds.
In their teen years, they ran a yard work business, started a rock band, and even launched a junk removal service.
“We knew we wanted to start something after college,” said Powers. “It all came together when [James} met a materials engineer buddy from McGill”. That engineer turned out to be Charles Vincent, TemperPack’s CTO.
Once they had their team assembled, the three college kids got together and experimented on multiple ideas. Back then, Powers was studying at Wharton, while Vincent and McGoff studied engineering at McGill.
Their first go-around? A high-end cooler for the consumer market. Sound familiar? Yes, it sounds like Yeti. As it turns out, it wasn’t such a bad idea, and the timing was right. Back in 2012, this was around the time Yeti coolers were just emerging with serious traction in the market. But the pitch was not so good.
The group didn’t make it past the first round of the Wharton undergrad pitch competition. Powers recalled losing badly at Wharton, “The competition was designed to help fuel entrepreneurship at Wharton, not come up with the best idea. So, we knew our pitch was really bad.”
After experiencing failure and frustration with coolers, they pivoted. And never looked back.
With months of research, the group noticed how Pharma supply chain was undergoing a big change from shelf stable to temp sensitive. And the cooler idea had them in the packaging state of mind.
Pharmaceutical cold-chain packaging is market dependent on transporting temperature sensitive drugs in the supply-chain. A huge and growing portion of pharmaceuticals are temperature sensitive. Biologic drugs, which are almost all temperature sensitive, account for 100% of pharmaceutical growth.
TemperPack’s proof of concept
The team of three reached out to hundreds of companies to talk packaging. They even got a couple to dig in and complain about Styrofoam. Dow’s flagship product is ubiquitous for a reason — it is super clean and can mold into any shape — but like anything else, it has it’s setbacks. And it’s not just about the environment.
Back in 2012, ‘it’s good for the environment’ was more of an after-thought, a nice-to-have. But supply-chains were looking for something insulated, non-plastic to transport temperature-sensitive items. And Styrofoam wasn’t doing the trick.
Before long, Brian Powers, Charles Vincent, and James McGoff launched the first iteration of TemperPack with a major manufacturer as students in college. The McGill boys (Vincent, McGoff) received credit at a co-op program in the Engineering department, and Powers went to spend a year of investment banking while the other two graduated.
In the early years, the team still went after Life Sciences while meal-kits were exploding. They emailed firstname.lastname@example.org and somehow got some high-level people to respond. HelloFresh had some serious sustainability interests, and were making a big push for insulation in meal kits.
“We grew really fast with meal kits mostly for the next few years, then diversified into baby food, dog food, wine, smoothies, juices, vegetables, food delivery, high-end steaks, seafood,” said Powers.
After scoring HelloFresh, they had credibility in the market. The shift away from Styrofoam was beginning, but it is nothing like it is today. States like California are trying to ban Styrofoam, but even in 2020 it is a lengthy and controversial process. Convincing major players to make the switch was no small feat, and it spoke volumes about the efficacy of the product.
We always develop our products with a sustainable eye, because everyone sleeps better at night with a cool conscience. That’s why, at TemperPack, cool comes naturally.
Today, TemperPack operates two facilities in Virginia and Nevada and is rapidly expanding its reach in the perishable and cold chain shipping market, all with the goal of reducing the amount of packaging that ends up in landfills.
TemperPack launched ClimaCell© in 2018. ClimaCell© is a bio-foam material made primarily from plant starch in our proprietary formula. The product is approved by paper-based sustainable packaging coalitions, with recyclable-only packaging insulation. TemperPack products have the same recycling designation as water bottles.
More recently, they launched a new material called JootBox©. JootBox© is 100% recycled joot fiber that is recycled from used burlap sacks. The plant is grown in Southeast Asia. It uses very little water and traps a lot of carbon. They source the material from factories that would send it to the landfill after producing coffee.
“We decided to do something more scalable that used less material over all and was curbside recyclable, used less plastic,” said Powers.
In TemperPack, Brian Powers saw a niche in perishable delivery where innovation had stagnated and companies were still using insulation products that had been developed over 60 years ago.
“We always develop our products with a sustainable eye, because everyone sleeps better at night with a cool conscience.That’s why, at TemperPack, cool comes naturally.”
Q&A w/ Brian Powers of TemperPack
Q: There is a lot of greenwashing in the space. Consumers are wary. How do programs like How to Recycle drive real change for businesses, and how much of it is just hot air?
Answer: I think they’re a helpful step. In order for it to get cleaned up, you need the government to enforce things. You can’t call something recyclable unless you have data, and that isn’t happening.
Tony Fidel and Tim Ferriss did a great podcast explaining the problem with plastic recycling and how micro-plastics go into everything. It needs to be home compostable which is the ultimate, bio-based materials give you a lot of flexibility
Q: How do you balance being a mission-driven for-profit with venture capital funding, which usually equates to short-term profits to get faster returns?
A: In a capital-intensive business, a lot of learning goes along with it, unlike software where there’s a bug … you got to keep people safe and do the right things. I’m very grateful to be in the American venture capital market, it helped us accelerate and have the footprint that we have now. I think it’s important to get investors that see the same market opportunity that we do.
The product that drives the business is inherently sustainable… so you don’t have to pretend to be something you’re not
It makes it easier to be super authentic about it because we have one mission: replace Styrofoam coolers… we also replace some bubble wrap. This is what we’re starting out on … we’ll continue to grow our products in the future. Being simple in the beginning is beneficial.
Q: Where do you see TemperPack in 10 years?
TemperPack in 10 years will be a multi-billion-dollar company market leader in packaging insulation and food and life sciences around the world. And potentially solving other problems too. But that’s our main goal right now.
Q: What’s your main growth strategy right now?
Focused on growing in e-commerce food and life sciences. Continuing to grow in those industries and we have a strong value proposition in each market. We are starting to operate commercially in Europe. Customer in New Zealand and Canada. The next step is international expansion.
Q: What are some overarching trends/predictions in 2020, in industry and sustainability movement as a whole?
US consumers getting really smart about the results of their products. End-of-life products and what happens to their packaging. This is anecdotal- consumers seem to understand the difference between home compostability vs municipal compostability, biodegradability the US market is starting to learn that now and it will be a really important part of the value prop of products in a way that it is just starting out to be.
You’ll also see regulation in the US, Styrofoam bans.. food containers and plates and cups and not coolers yet. The Dunkin’ move – PR against Styrofoam- scares buyers and they use Styrofoam for everything. It’s enough to get some people to make the switch
Q: Something that you wish you knew if you could go back again
The early days were really fun. James and Charles are very bold people, it was fun to walk into a warehouse and then say hey can we sell you insulation? And then kicked out. When it finally gains traction, things can get pretty stressful.
While you certainly don’t want to take anything lightly, I wish I would have enjoyed it more. Even though we did really well, you want certain things to go a certain way, and most of those things don’t happen. Even when you succeed.
Enough of them do, so that you get to continue and grow, each day felt like a failure. But when you look back six months, you can see how you are in a way different place than you were six months ago.
Enjoy it and don’t wait until works.
Q: How much would attribute your success to luck and how much of it was skill and hard work?
There’s been a massive amount of luck. 30% luck 70% work.
For information about TemperPack, you can visit their website here.