Adam Trippe-Smith, founder of innovative rental keg businesses Kegstar and Konvoy, sits down with Melanie Stark to discuss his latest business venture and the benefits of being an early adopter of IoT technology.
Adam Trippe-Smith is the founder of Kegstar, a company that began in 2012 with a start-up mentality and a pool of 880 kegs. Fast-forward three years, and the company was sold to logistics giant Brambles. Kegstar now services more than 600 customers around the world with 700,000-strong fleet of kegs.
With a background in accounting and corporate finance, Adam’s first delve into the logistics and supply chain was through his entry into the beverage business in 2008. Adam started his own craft beer company in the early wave of the independent craft brewery scene. The industry has been flourishing over the past 12 years, and according to research by IBISWorld has experienced a 9.7 per cent average growth rate between 2014 and 2019.
“That was my introduction to logistics. Coming from a finance background I was suddenly running a brewery with moving parts and assets – it really was a baptism of fire,” Adam says.
Adam quickly understood the challenges of running a keg fleet and the common pain points felt across the industry and wanted to establish a better way. “We started a rental keg business to teach the whole market, from the pubs, to the beverage producers to the warehouse and logistics providers that renting kegs and having someone else look after them made good business sense,” he says.
Since then, Adam has immersed himself in the beverage industry. He is dedicated and passionate about brewing and the industry at large, and was a founding board member of the Independent Brewers Association, a professional body to represent those operating in this space.
In true entrepreneur style, Adam arrives to our video meeting after taking a call from an investor off the back of a press release announcing a new acquisition in New Zealand for his latest business venture, Konvoy.
Formed by Adam in 2019, Konvoy was formed to take the keg rental industry to the next level. “This wasn’t about starting a competitor to Kegstar, for me it was about unfinished business,” he says.
Adam believed there was a way to build a leaner, faster and more customer focused way of moving kegs around the supply chain and he understood that track and trace technology had to be at the forefront of this venture.
An early adopter
When Adam formed Kegstar in 2012, track and trace technology was in its infancy and although he reached his goal of running the first keg fleet in the world that was 100 per cent uniquely identifiable and 100 per cent tracked, the technology had its limitations.
“This was 2012 and the cost of networks like GPS and 4G tracking just didn’t make sense economically for an asset with a value of around $150. So, we went with barcode tracking and RFID technology,” Adam says.
However, this kind of technology relies on someone scanning the keg which Adam says is impossible to achieve 100 per cent accuracy. There is also the behavioural challenge of asking, for example, a 30-year-old privately-owned logistics company to scan kegs with a smart phone, which was just not something they had previously done.
Furthermore, with RFID, there are moments of accurate data, but it’s not consistent and not in real time. The data only gives so much and in the world of premium craft beer, there is a focus on quality that comes with a need for more dimensional data than what RFID can provide.
“Independent brewers are often not pasteurising the beer, so it needs to be treated more like milk. It needs to be stored cold and that information needs to be checked regularly, RFID does not have the capability to communicate this kind of data or accuracy,” Adam says.
IoT: the better way
A huge driving force for Adam when he started Konvoy was to develop the next evolution of keg tracking. He recognised this would have benefits for every step in the supply chain and his first goal was to find a technology that could offer increased transparency, real-time data and more useful information for Konvoy, but also the beverage producers and the pubs.
“When we started Konvoy it really was just a whiteboard and we were asking ourselves how we can make this business simpler and better for the customer? How do we track kegs better for our own benefit, but also for our customers?” Adam says.
Knowing that technology had improved significantly over the seven years between when Adam launched Kegstar and when he began brainstorming ideas for Konvoy in 2019, he engaged Sydney-based Internet of Things (IoT) telco Thinxtra and its nationwide 0G (Zero-G) Network, powered by Sigfox technology.
“From here, we set on the project of designing our own beacon, a small wireless sensor, and running it on Thinxtra’s 0G Network, which covers 84 per cent of Australia’s population,” Adam says.
The 0G Network offers real-time visibility of assets across Australia as well as worldwide coverage for when the kegs are exported globally and has been set up in Australia by Thinxtra. Thinxtra is the exclusive Sigfox 0G Network Operator for Australia, New Zealand, Hong Kong and Macau and is one of 70 Sigfox Operators around the world providing local service and global scale.
As a keg owner, Konvoy lends out its assets to 100s of different users who then lend out their kegs to potentially thousands of different locations. With IoT as opposed to RFID, there is total visibility of the asset, its location and its performance in real-time.
Challenges along the way
Any project that has been delivered during COVID-19 has had its fair share of complexities, and the Konvoy journey is no different.
“We work with a hardware partner in Asia, with network partners in Australia and New Zealand – it’s a global project and not having everyone in one room to go through any issues, challenges and teething troubles was certainly a challenge for us,” Adam says.
However, Adam says his greatest learning was recognising that you need expertise in IoT technology from the get-go.
“We class ourselves as beverage people, with an interest in logistics and technology. If I started this whole thing again, I would have hired a Head of IoT from day one. In fact, we are doing that right now,” he says.
For Adam, this is only the beginning of his IoT journey. “There is plenty of data out there, but the real value is in the information. If you can have more useful information and make it usable for both yourself and your customers, then why wouldn’t you deploy this technology?” Adam asks.
The first step for Konvoy is to run its own keg fleet better, but stage two is to help other keg owners run theirs more efficiently. From here, Adam and his team will start to look into opportunities for other assets of a similar value that could benefit from IoT.
“A keg is a $150 asset, so your cost of running the network and beacon has to be relative to the cost of your asset. We will be looking at other assets in the $100 to $2000 that could benefit from this proposition. A few years back when IoT was in its infancy, there was an economic hurdle for assets of this value. But by tracking this on the 0G Network the economic issue just isn’t there anymore,” Adam says.
According to Adam, two or three years ago IoT was more of a buzzword but now he sees huge potential in the technology and this as a game-changer for not only the beverage industry but any industry that has a requirement to track assets.
Konvoy currently has more than 200 customers, including well-known craft breweries Moon Dog, Fixation, Parrot Dog and Hawkers.
Adam says Konvoy will be the first and only keg fleet in the world to be tracked with IoT technology and by November this year all of the kegs in the fleet will be retrofitted with beacons.
“We currently have 60,000 kegs and we have ordered 70,000 beacons. They will be retrofitted into our current fleet and any new kegs will be manufactured with our beacons,” he says.
Adam’s commitment to his industry is evident in his continued efforts to improve efficiency and customer service for every step of the beverage supply chain. His curiosity and interest in new technology has led him to explore IoT technology which has given Adam the opportunity to not only revolutionise, but also simplify the beverage industry.