An Interview With Russell McLeod
Consumer engagement. You need to educate and incentivize consumers to participate in the circular system. Sometimes, you don’t even need to use terms like “circularity” or “sustainability.” It’s about leveraging human behavior and economic incentives to make returning containers intuitive. Our user-friendly kiosks and digital tools help achieve this.
I recently had the pleasure of interviewing Manuela Zonensein.
She is a serial climate tech entrepreneur. Manuela has founded two agri-tech companies and has experience at Palantir Technologies and Newsweek. She also holds degrees from Harvard, Oxford, and MIT. If that’s not impressive enough, she is now driving forward the success of her latest venture, Kadeya. It focuses on low-waste, low-cost hydration solutions for frontline workers. Let’s jump into the conversation and uncover the story behind her groundbreaking work.
Thank you so much for doing this with us! Our readers would love to get to know you a bit better. Can you share with us your journey and the pivotal moments that have led you to becoming an entrepreneur?
In retrospect, I’d say that I’ve always been an entrepreneur. I was always the first person to complain about a problem that kept popping up. I’d always raise my hand to be the first one to try to fix it and make noise about it. For example, in second grade, I designed a bus that ran on garbage for my science fair project. I used to stay after class and sort the garbage from the recycling. This was like a deep, dark secret that I didn’t want any of my friends to know because I thought they would think I was a nerd — which I am, and I was.
It’s actually been part of my life for as long as I can remember, though I think I didn’t have the language for it. My parents were both academics. My sister’s an academic, so I’m the black sheep of the family, being basically the only capitalist. It was when I lived in China, reporting for Newsweek, that I saw how media was completely changing with the internet and the new business models that came with it. I started getting really frustrated that magazines weren’t evolving quickly enough, while other publications that were doing more innovative work were surviving and thriving in the new digital information age.
So, I decided, well, I’m going to build my first information service here in China, focused on agricultural technology. And that’s what I did. It really wasn’t until Kadeya, now my third business, that I started truly self-identifying as an entrepreneur.
That’s really interesting. And I want to dive into Kadeya. But before we do, one of the things that came up in the Fast Company article that you did, and also you mentioned in the Authority magazine piece, is how quickly you saw China go from reusables to single-use plastic. Can you speak about that and how it inspired your vision for Kadeya?
Absolutely. So I lived in China from 2007 to 2015. And I saw enormous change happen in those eight years. Not only that I used to be riding my bike in a sea of bikes and there were very few cars, but by the end, I was one of the last people on a bike surrounded by cars. Similarly, when I first got there, I loved the culture around tea. You had a tea jar made of glass, and in the morning at home, you’d put your loose leaf tea in it, fill it up with hot water, and throughout the day, wherever you were, there were hot water stations to refill your tea jar. I thought that was such a critical part of Chinese culture and one of my favorite experiences while there.
But by the time I left, I saw that especially the younger generation, who were busy with their jobs and always running around, had adopted a more Western commercial lifestyle. Everyone was carrying around single-use plastic water bottles. Anything that happens in China, with its 1.5 billion people, gives you a preview of what could happen at scale. Beijing ran out of landfill space before I left, Shanghai did too, and I’m sure other cities across China were facing the same issue. So I thought to myself: A, this is not sustainable at scale. B, if we’re going to solve the problem, we need to address it where it began — in the West and here in the United States. So I felt it was our responsibility to find a better model. And C, if you know anything about history and culture, things always change. So to me, it felt like a two-way street. Yes, we went from reuse to single-use, but we could just as easily go the other way if we understood the incentive structures that drive people’s behavior. Those are three of the biggest lessons I learned while being in China.
Okay, this point about incentives is so fascinating. Because we’re at a point where we’re seeing some really important incentives opening the door for new innovation, creating space for companies like Kadeya to succeed. What were the things in the market that you saw that made you feel Kadeya had the potential to be successful?
Great question. So I’ve actually always designed Kadeya with the assumption that there wouldn’t be any new incentives. No carbon tax, no carbon pricing, no bans on plastics, like what Europe has done, and no global treaty like the UN Plastic Pollution Ban, though we’re now on track for one. I designed Kadeya for a world where no one cared about sustainability. Basically, I designed our solution for what I call the three M’s: you’re either mean, moronic, or misinformed. My solution had to work for that kind of person if we were going to compete with single-use. My assumption was that sustainability doesn’t sell — we don’t get extra credit and we can’t charge more just for being green.
That’s really guided how Kadeya works. When I decided to explore this idea more in depth, I had just left Palantir, where I worked with the kitchen staff to launch a reusable water bottle program. I was really proud of that. We reduced single-use by about 30 percent. But I realized the model we used at Palantir wasn’t scalable globally. So when I went to MIT for business school, I went with the idea that reuse would be a design constraint, but it wouldn’t be the core value proposition. We’re not selling you reuse — it just happens to be a reusable bottle. What we’re selling is better quality, lower cost, and more convenience. That’s what I call CCQ. That’s what it takes to win in a dog-eat-dog capitalist market: cost, convenience, and quality. And that’s what Kadeya has been designed for.
Love that. I’m going to dive into more of that in a little bit, but I think we actually need to pause and have you explain to us what Kadeya is and what your value proposition is to your customer base.
Absolutely. Again, my motivation is to eliminate the need for single-use beverage containers forever, for everyone, everywhere. And we are doing that, but that’s not what we sell to our customers. What we sell to our customers is the elimination of a massive headache. With single-use, the plastic itself isn’t the core problem — that’s just the tip of the iceberg. What’s actually problematic is the whole linear supply chain that allows a consumer to get a single-use bottle. So, we’re targeting industrial workplaces to start: construction sites, manufacturing plants, fulfillment centers. We’ve also won two major grants with the U.S. Air Force. These are environments where people work on their feet, not on their seats like you and me in front of our computers.
It turns out that hydration is not only critical to the health and well-being of these workers, but also to their performance on the job. Employers are constantly restocking hydration options, and this happens dozens of times a day. It’s a very manual process. One of our customers found us by Googling “zero waste hydration.” He’s based in Texas, has a thousand construction workers, and goes through a million plastic water bottles a year. To get those bottles into the hands of his workers, he said he’s basically had to become a bottler and distributor, on top of being a general contractor. So, realizing the inefficiencies in this massive distributed supply chain for beverages, what Kadeya is able to do — and I’ll explain what we’ve designed to make this possible — is eliminate that whole back-end supply chain and create fully automated, self-sustaining bottled water. The container just happens to be reusable.
We’ve designed a bottling plant the size of an upright piano. You walk up to this upright piano, it looks like a vending machine. There’s a touchscreen where you choose the beverage you want. We offer all cold, non-alcoholic beverages: flat water, sparkling water, and branded drinks that people already know and love. The drink is dispensed right in front of you in our infinitely reusable stainless steel bottle — in just seven seconds. By the time you realize your bottle is being filled, it’s done. It’s amazing. Every time I use it, I’m shocked by how fast it happens. When you’re finished, you return the bottle to any station in the network. Think of it like bike sharing, but for bottles. Our patented station inspects the bottle when it’s returned. Once it’s inspected, we accept it to be washed, sanitized, dried, and stored for the next user — all inside this piano-sized box, over and over again.
So, that’s the technology behind the business. Our beachhead strategy and value proposition are about eliminating the annoying manual logistics needed just to keep workers hydrated enough to do their jobs.
Okay. So I love where you’ve taken your customer’s problem, because it’s so fascinating to figure out the pain point. I’m interested to know — when you were developing Kadeya, did you start with the goal of eliminating single-use plastics? Was this business your original planned customer base?
Great question. No. And that’s — I’ve had three crucial unlocks that have brought Kadeya to where it is today. The first one happened when I was at MIT. I kept telling people, “I want to build bike sharing for bottles,” and the first thing everyone said was, “That’s crazy. How are you going to get people to return the bottles?” And I thought, well, it’s not rocket science. It’s a little bit of social psychology and behavioral economics. So, I started figuring it out. What I found at MIT was that if I had you self-identify — write your name, email address, and phone number next to a bottle with a number Sharpied on it — you’d return it 99% of the time. We’re still getting a 99% return rate with no penalty or deposit. It’s the highest return rate I’ve come across. If anyone hearing this has seen a higher return rate with no penalty or deposit, by the way, please let me know!
The second insight was around the technology for washing and sanitizing the bottles. We decided that the wash and sanitize process had to be co-located at the point of use. COVID hit, and I really invested in sanitization. Now, we have the world’s best bottle wash subsystem.
The third insight — and this gets to your point — was figuring out what market we were going to serve. I banged my head against the wall for two years on that. I had done all this early market research at MIT focused on university campuses, white-collar offices, and conferences because that’s where I saw bottled water being used, and those were the people I had access to. So, I did user discovery with those populations. Then, thank goodness, COVID hit, because nobody was going to any of those places anymore.
I also, by chance, moved back to Chicago, which is a hub for industrial sectors. I took a sailing lesson when I first got here and ended up on a boat with a woman who works at Gilbane Construction. After a few months of trying to help me, she said, “Well, I can’t get you into an office, but I can get you on a construction site tomorrow.” I had never heard someone say that before. So, I did my market research, did site visits, and user discovery work. And when I called her on October 6th, I said, “I’m ready to go.” By October 28th, we were deployed at their IU Health Construction Project in downtown Indianapolis, one of the largest healthcare construction projects in North America. We’ve been there since October 2022, generating revenue. They’ve since committed to 10 units.
When I delivered the first prototype, even before I plugged it in, the project executive said, “I want to buy that.” I told him, “You don’t even know if it works or if your workers will want it.” He replied, “Yeah, but what am I going to do on a good day? Go back to buying and distributing single-use plastic water bottles over and over again?” That was the light bulb moment. I realized I needed to be in environments where the employer is already concerned about hydration and providing it in some form. They already have the budget, the expenditure, and the concern, but it comes with all these painful logistics of constantly restocking beverages for their workers.
There are two awesome things you just shared. One is that the line item already existed in the budget, which is like half the battle, right? Because trying to convince somebody of a new thing, if they don’t have it budgeted, is part of the challenge. But the second thing that’s so fascinating from your discovery work is that it’s the actual delivery of the water bottles that’s a huge pain for the customer. So, what did you do to find and land on that piece of discovery?
It really started with that project executive saying, “What am I going to do on two dailies?” From there, it’s been a constant journey — basically two years now — of fine-tuning the environments where that pain point shows up again and again. For example, one customer who came to us — we’d never even considered this sector — was in movie production studios. They found us and asked for the stations. If you think about that environment, it’s people working on their feet, right? They need to stay hydrated. There are fluctuations in temperature, and it’s actually a pretty itinerant population. A huge crew comes in to film a Beyoncé music video for a couple of days or a Marvel movie for a few weeks, and then they leave. And when they come, they bring a lot of stuff.
The production studio has to quickly scale up the availability of supplies, and it’s a purely manual process. They’re either ordering online for delivery or going to a Costco or Walmart to pick up the supplies. Then you’ve got to deal with scheduling the loading dock, receiving the truck, and unloading everything. Have you seen a 10-wheeler truck for a beverage company? It takes about eight hours to load and eight hours to unload, using two guys with a mechanical dolly — every single time.
What we’ve realized is that about two-thirds of the cost of a packaged beverage is in that upstream supply chain, even before it reaches the consumer, and two-thirds of the carbon footprint is there as well. What excites me most about Kadeya is that we’ve identified a problem that’s a really sharp migraine for someone who already has a budget for that product. But what’s even more exciting — and rare in sustainability — is that we’re able to link that pain point with the larger, macro-level problem at scale for the entire packaged beverage industry. I’d say this applies to all consumer packaged goods (CPG). We’re constantly redistributing these heavy materials, and they go through dozens of steps in the supply chain before a consumer can even buy them.
Yeah. Okay. So when I first connected with you, I went and did a quick scan of your website. I’ve worked with a few organizations doing reusable materials, especially with restaurants and food delivery. Usually, the material is used and dropped off at a central location. So, in my mind, I was thinking, “Okay, you’ve got a vending machine filled with bottles. People will drop off the empty ones, and then you’ll take them back, clean them somewhere else, and load them back in.” But you’ve actually developed something with a lot of technology in it. This is pretty fascinating. Can you walk us through how you built it, from the engineering and ingenuity that went into developing a standalone station where the refilling is done on-site?
Yeah. And to really emphasize that point, there are a lot of reuse packaging companies, but they get the dirty containers, and someone has to truck them to a centralized wash facility. People are manually loading and unloading plates or clamshells, then redistributing them before the packaging even gets filled with food. I think a lot of people don’t realize that’s what it takes right now to do reuse.
To your point, we co-located the washing process. It happens autonomously in the machine where we also sell the beverage. Being at MIT was great because I was around really smart, technical people. When I started telling people, “Oh, we’re going to do bike sharing for bottles, and the machine will wash the bottles,” some people thought it was insane. I was like, “How? We have dishwashers. Dishwashers exist.” We’re washing containers all over the world right now, so I felt pretty confident.
I’m not a technical person — I’m not an engineer by training — so I figured, “Okay, dishwashers exist, so that addresses most of my concerns.” But I still didn’t know exactly how this would work, so I spent a lot of time talking to technical people. One great thing about MIT is that if you study there, you can email anyone with an MIT address, and they will respond. It’s incredible.
I started reaching out to experts — professors in different types of engineering, water experts, materials experts — and I started triangulating a few things. First, I landed on the bottle material being either glass or stainless steel. We’re not trying to invent some new material that’s supposed to biodegrade (most of that stuff is really BS anyway). We’re not using any plastics. I dug into how plastics perform under high heat, and I just couldn’t stand behind that product. That was a big learning experience.
The other big learning came when I started thinking about cleaning methods, especially during COVID when everyone was talking about UV and ozone. But I realized that good old-fashioned hot water and soap work great. That does the trick. I still hear people ask, “What about UV? Don’t you need UV?” And I tell them, “We could add it if it makes the consumer feel better, but we don’t need it. We’re exceeding commercial and regulatory standards with just hot water, pressure, and chemicals.”
At first, I wanted to avoid using chemicals, but when we tried that, the carbon footprint of the station spiked. If I removed chemicals, the water would have to be even hotter than 180 degrees Fahrenheit to kill any bacteria, and heating water that much over and over would drive up energy use, making the carbon footprint indefensible. The voltage and amperage requirements would also limit where we could place our stations. So, I’m always triangulating: the tech, the brand, the value proposition for the consumer, and whether it’s commercially viable. The washing process honestly took the longest to figure out.
This is a kind of long-winded answer to your question, but what I focused on initially was understanding the commercial side. I tested it at MIT, got people to return the bottles, and asked, “What would happen in a workplace?” Our first prototype was an old vending machine we bought off Amazon. I talked to 3D teams in the Boston area and said, “Here’s the scope: I want a machine that dispenses beverages, pre-loaded like a vending machine, but every bottle will have an RFID tag on the bottom.” The consumer would self-identify using a QR code on the front of the station (thanks to COVID, everyone learned how to use QR codes).
The first prototype was just a vending machine where you scanned a QR code with your phone, entered your email address, and it dispensed a bottle. I got really valuable data from that. I was able to track whether people returned the bottles, and we achieved a 99% return rate. I also learned that the bottle size we were using was a good fit, and that people preferred our solution over the single-use alternative.
So, just to clarify, version one had no dishwashing. It was just bottles. You were testing if people would bring them back, right?
Yep. And also if they liked it. How much usage were we getting each day? What was the utilization rate? And then we started mapping the peaks and troughs of consumption.
And you felt really good about those results from version one?
What I felt good about was that we exceeded expectations on consumption. We put our machine right next to a fridge full of free single-use plastic water bottles. I was actually friends with the kitchen staff at that company, the same staff I worked with when I was at Palantir, where we launched a water bottle program. So I reached out to them when they had moved to different companies and asked, “Hey, remember that project we worked on? I’m building a business around it. Can I pilot it in your workplace?” I had great connections from those early tests at Palantir.
At the end of each month, they would give me data on how much they spent on beverages outside of Kadeya.
So you had a bit of a cost comparison to work with?
Exactly. I had a cost comparison, which helped me understand what B2B pricing would look like. I could see how many plastic water bottles were consumed versus how many Kadeya bottles were used. And Kadeya bottles were consumed more than the single-use alternatives. I really narrowed the experiment down to compare Kadeya and single-use options directly. The pricing was the same, the location was the same, and the population was the same. There was a little more friction with Kadeya — you had to log in, give your email, pull out your phone. There were extra steps, and there was a learning curve.
But the fact that people still preferred Kadeya despite that learning curve was the first real sign that this could work, and that it was competitive with single-use alternatives in the workplace.
So that was the first prototype. For the second prototype, we used the same design — still water only — but we needed to build our own vending machine. And we did that. We put it into the Gilbane worksite and learned a few things. First, the refrigeration kept breaking, and people were complaining. So, cold water — we had to get that right, especially in an industrial environment. Within days, the construction workers were asking, “Do you have electrolytes? Flavors? What about sodas? Can you carbonate this?”
I had said from day one, we’re only doing water, but I was getting pulled into offering flavorings. As we started understanding the revenue model better, we realized we had to add flavoring. About six months into the Gilbane site, we rethought our revenue model and said, from a product perspective, we need flavoring.
The unreliable refrigeration, which was also driving up our carbon footprint, pushed us to rethink things. We realized we couldn’t predict demand on a worksite, so we needed to dispense and chill water on demand. That way, we wouldn’t need refrigeration in the station.
This brought down both the carbon footprint and energy consumption, while also opening up new possibilities for meeting fluctuating demand, which is crucial in a cash market. The more adaptable you can be to demand, the more revenue you can unlock.
You don’t have inventory problems where you’re carrying different flavors and trying to figure out the right balance.
Right. That’s actually a fundamental problem with the single-use market. You go into a CVS, a 7-Eleven, or a Tim Hortons in Canada, and you can only buy what they’ve already stocked. With Kadeya, we’re not offering unlimited options — it’s not thousands of flavors — but we’re less restricted. We’re unlocking more opportunities to sell what the consumer might want, and we can customize a lot at the point of sale.
And how many flavors are you carrying in the market now?
Manuela: So, our current station supports six options. Typically, that breaks down into just plain filtered water — Kadeya filtered water. We’re filtering municipal water, and it’s delicious. I’m not a water snob, and that’s not why I’m doing Kadeya, but it tastes really good. Our sparkling water is the best I’ve ever had, better than Topo Chico or Pellegrino. Then, we have space for four syrups — bag-in-box or concentrates. I think that will adjust depending on the environment.
With our customers, we offer a menu of all the options and ask them what they’d like. We’ve found there’s a lot of brand value in having one or two well-recognized brands. It gives a kind of halo effect, like, “Okay, this is real, this is legit, I’m going to trust it.” And then there’s value in having one or two seasonal brands or flavors to bring novelty. We can also feature local brands. For example, if a lot of the population is made up of Hispanic, Indian, or Caribbean immigrants, they might want more tropical flavors. So, we put together a mango-flavored soda, and it became our best seller.
The reason we can adjust so quickly is because we have the data. We know what consumers like. I didn’t mention this, but when you go to the station, you self-identify with a QR code. Every bottle has a laser-etched QR code on the bottom. Just like with bike-sharing, we track usage. We know that user ABC undocked bottle 1, 2, 3, 4 at 10 a.m. at station X with mango-flavored soda, and that same user returned bottle 1, 3, 4 to station Z at 12 p.m. So, we not only have per-station and per-product insights, but we can also understand how an individual consumer is engaging with different products. We can really start to map out demand, which is unheard of in the CPG industry.
Is there anything you’ve seen in the data that you found particularly interesting? Like, do you have 80% of the water being consumed by a small group, or do you see people consistently using the same flavor? Or maybe they’re testing different options? Any surprising or unique insights?
One of the most surprising insights came from when we started Kadeya at the Gilbane worksite two years ago. Everyone assumed, “Oh, they just want Monster Energy.” The assumption was that industrial workers wanted sugary, high-caffeine drinks like Monster. But recently, we’ve seen a shift toward lower-sugar, more natural products performing better. We followed up with qualitative interviews, and now, two years later, that same population is saying, “I want less sugar, I want less caffeine.”
What’s been fascinating to me is learning that the assumptions about industrial workers don’t always hold true. When you really dig into their preferences, they actually mirror those of white-collar workers. They’re consuming the same information about health — hearing that sugar is bad and feeling shaky from too much caffeine. So I’m excited that we’re able to gain insights into a population that’s been overlooked and not well understood.
And, actually, when I reviewed all the peer-reviewed research on hydration, there’s been no real research done on manual labor workforces. I’m really excited to start telling a more important story about how hydration affects their health, well-being, and performance over time, expanding the conversation around health and wellness beyond just white-collar workers.
Yeah, that’s really interesting. You’ve shared a lot of amazing insights. Early on, you mentioned cost, convenience, and quality as the North Star. We’ve talked about convenience and quality, but let’s talk about cost. I love that you said you’re not making a premium product, and you need to compete with what’s already in the market. Given the technology you’re bringing, how are you able to compete on cost?
The cost piece was critical. From the start, we said we had to be at least price-parity with single-use products. In industrial environments, employers already have a line item in their budgets for water. They’re either providing five-gallon jugs, which someone has to flip over, or pallets of plastic bottles, bought wholesale from places like Costco or Walmart. So we looked at the per-ounce cost of that water and asked, “Can we match it?” That was crucial for Gilbane. They told us, “We can’t spend more than we already do.” It just wouldn’t be feasible for them or their subcontractors, who often absorb that cost.
So we set out to match the wholesale cost of bottled water. For flavored products, we looked at comparable items — like what you’d find at a gas station or convenience store near a construction site, or in a manufacturing environment’s break room with vending machines or micromarts. We decided to match those prices as well.
Once we had that pricing model, we analyzed the capex for our stations, consumables, and maintenance. We set a goal: We needed a 12-month payback period — not just for the station but for everything, including maintenance and consumables. If we couldn’t generate a contribution margin within 12 months, we didn’t have a viable business.
Then we ran pilots in industrial environments, most recently at an Ecolab manufacturing plant. We found that if 70% of the sales were water and 30% were flavored drinks, and we achieved 40% adoption (which is what we saw in that environment), we could hit our daily revenue targets.
This led us to map out the entire industry. We determined how large a workforce needs to be in each environment — whether it’s manufacturing, construction, or a fulfillment center — for us to feel confident we can sell enough beverages each day. Now, we know exactly where we want to go and who we’re selling to.
Do you have customers who are open to removing alternatives, like single-use items, from the environment? For example, if Kadeya comes in, could they eliminate those fees and position you better for success?
Yeah, what’s really exciting is what happened during the Ecolab pilot. The food and beverage service provider for that environment — the company that restocks the sandwich fridge, chip shelf, and micromart fridge — saw Kadeya, did their due diligence, and committed to installing 10 units just in the Chicagoland area. They decided to replace every micromart fridge in industrial environments with a Kadeya system. So anywhere there’s a fridge in a micromart, Kadeya is a fit.
Similarly, with that movie production studio and a few other places that have vending machines, they said, “Our vending machines are a hassle. We have to wait for someone to restock them, which can take an hour.” So, they’re happy to give us that footprint too. From a competitive standpoint, our beachhead is eliminating vending machines, fridges, and micromarts.
What makes me even more excited is that while we’re at price parity with single-use options today, our gross margins are actually two times better than single-use. The big question is, how do we take advantage of that gross margin without threatening anyone? Kadeya is just a platform — it’s a better vending machine or refrigerator, with improved margins and a better environmental footprint. Ideally, anyone who currently operates vending machines could become our customer. Over time, they’ll just buy Kadeya systems, place them, manage them, and enjoy the great gross margins. Meanwhile, we’ll establish a reuse network for our bottles everywhere. That’s the vision.
So is the vision for you to not necessarily own the customer base long-term? It sounds like phase one is building a customer base, but in the future, do you see yourself selling into distribution networks instead?
That’s an open question and something we’re still figuring out. Those are kind of the two extremes. I could see the customer base we’re focused on right now being ours for a long time because we’ll understand them deeply and be so attuned to their needs.
However, when we think about other environments — like universities, sports arenas, venues, and hospitals, where we’re getting a lot of inbound interest — I already feel like we won’t be the experts there. Someone else is already restocking the vending machines in those places, so it makes sense to sell to them. With our great gross margins and sustainability story, I think they’ll be eager to buy Kadeya units. This would allow us to recoup our capex quickly, and we could reinvest in building more units for the markets we manage directly.
So, I’d rather have a smaller piece of a bigger pie. If we can make this pie massive — global even — everyone wins. Beverage companies, vending operators, and others can eliminate single-use plastics, aluminum cans, and boxed waters, which don’t make sense anymore. Kadeya will earn incredible margins on our core business channel, make great margins on the rest, and ultimately become the de facto platform for all beverage commerce. I like to call it the “liquid railroad.” That’s what we’re building.
It’s exciting. Okay, I just have a few last areas to talk about. First, tell us about the traction you’ve received so far. What’s your trajectory? How are you feeling about the success you’ve had to date? Where are you at?
We’ve exceeded our sales targets for 2025 by 100%.
For 2025? Wow.
Yeah. Companies have already put in deposits and signed contracts, committing to a certain number of Kadeya units. We’re in an exciting moment where we’re transitioning from the R&D and technical risk phase to full commercialization. We started with a prototype for Ecolab that vended various beverages. It was the first unit that dispensed all flavored products, and that’s where we learned about adoption rates and how to sell and price different products.
Then we realized we needed to do this in-house. So, in the background, we built all the core subsystems — like the bottle wash subsystem — individually. For example, we put a bottle in, waited two minutes, and made sure it washed properly. The challenge was connecting everything so it could happen autonomously, and we’ve done that. We’ve built the station. Now, I’m vending my own beverages every day — Cokes, Pepsis, sparkling water — in Kadeya bottles. When I return them, they get inspected, washed, sanitized, dried, and refilled for my colleagues. That’s all happening now.
As we turn the corner to launch in the real world, our growth is intentionally going to be slow for the next two to three years. First, we want to exceed customer expectations. We want them to say, “I got two units, and I love them. Now, I want a hundred more.” So we’re under-promising and over-delivering. Second, we’re focused on just five states in the Midwest — Wisconsin, Illinois, Indiana, Ohio, and Michigan — so we can easily support those stations locally. Third, we’re learning how consumers interact with the product, which may lead to some design tweaks before we scale.
And lastly, the technology is performing well. We expect 97% uptime next year and aim to hit 99% by the end of 2025. That’s crucial because once we start mass-producing these units, every decision we make now will be repeated. We can’t afford inefficiencies as we scale up to hundreds or thousands of units.
Incredible. Okay. Now, I want to move to a question we ask companies focused on the circular economy. What are the five things you need to create a successful circular economy-based business?
Sure. The five things are:
1. Innovative design. You need to create products that are durable, reusable, and, most importantly, appealing to today’s consumers. For example, the Kadeya bottle has a design patent. It’s a beautiful 16.9-ounce stainless steel bottle — familiar, feels good in your hand, easy to hold with your smartphone, and it won’t roll. Plus, the water flows out smoothly.
2. Efficient operations. You need systems that ensure products are returned, sanitized, and reused in a way that feels seamless and obvious to the consumer. Our partnerships with companies like Ecolab have helped us deliver that experience, achieving high adoption rates and a 99% bottle return rate — with no penalties or deposits.
3. Strong partnerships. Collaborate with industry leaders to expand your reach and learn from their expertise. For example, we’re leveraging Ecolab’s knowledge of wash and sanitation chemicals, so we don’t have to reinvent the wheel. They provide expertise that aligns with our core competency.
4. Consumer engagement. You need to educate and incentivize consumers to participate in the circular system. Sometimes, you don’t even need to use terms like “circularity” or “sustainability.” It’s about leveraging human behavior and economic incentives to make returning containers intuitive. Our user-friendly kiosks and digital tools help achieve this.
5. A scalable business model. You have to ensure the financial viability of your circular system. Our hydration-as-a-service model offers cost savings alongside sustainability and doesn’t require any changes to how payments are processed today. It fits seamlessly into existing systems.
I love that. I think consumer participation is one of the most understated yet critical factors in a successful circular economy.
Absolutely. I think a lot of people in the reuse space come from a high-horse mentality, like, “I use a reusable bottle, so you should too.” But to succeed in the market, you need to design products that are better than the status quo and minimize behavior change. The reuse and sustainability world often expects consumers to change, but it’s really on us to create better products that exceed their expectations.
There’s a misconception in the socially conscious business world that consumers will pay a premium for ethical goods. While that happens sometimes, the vast majority of the time, you have to meet people where they are on cost. I love that you’ve done that with Kadeya. It’s such a smart part of your value chain.
Thank you.
Manuela, I just want to say a huge thank you. I’ve loved this conversation, and I’m excited to see where you take Kadeya. It feels like you’ve grounded yourself so well in the customer’s needs that it’s only a matter of time before you take over the world. Congratulations.
Thank you so much, Russell. I really enjoyed your questions. Hopefully, this conversation will be helpful to other circular entrepreneurs out there.
About the Interviewer: Russell McLeod is an experienced business leader, social entrepreneur, and mentor. A champion of profit with purpose, the circular economy and of collaboration for positive progress.
Russell is the founder of Mightyhum a Toronto-based impact enterprise dedicated to supporting growing organizations. And, while it’s not a requirement, the Mightyhum team has a passion for collaborating with purpose-driven businesses. Mightyhum specializes in providing consulting services and turning hairy audacious concepts into achievable ventures & projects. The Mightyhum team work with C-suite executives and leaders, developing new product offerings, effective go-to-market strategies, building for profitability, and streamlining operations. Before Mightyhum, Russell was involved in the world of social enterprise as the Executive Director of ME to WE, one of Canada’s best known and most awarded social enterprises. While at ME to WE, the team demonstrated that being profitable and impactful was indeed possible. During his tenure, ME to WE delivered $20M in cash and in-kind to WE Charity, helping transform the lives of over 1 million people through access to clean water; the lives of 200,000 children with access to education; and 30,000 women-led businesses launched globally.
Russell’ personal mission is to inspire others that there is ‘a better way to do business,’ ‘that through business we can solve some of the world’s problems at the same time.’ You can follow Russell’s work at https://www.linkedin.com/in/russell-mcleod1/ or www.mightyhum.com.
Manuela Zoninsein On Building the Future of Circular Economy One Bottle at a Time was originally published in Authority Magazine on Medium, where people are continuing the conversation by highlighting and responding to this story.