Podcast #129: Food Quality as a Service

Good day, and welcome to edition 129 of our digital industry leadership series. I'm pleased today to host Ihab Hourani CTO of Axino AI, a company providing food quality as a service. Axino is Momenta’s newest portfolio company headquartered in Switzerland. Ihab is a seasoned executive and entrepreneur in the wireless and IoT sectors with a 20-year career spanning from executive management to design engineering, marketing, business development, and of course startup founder with a start developing sophisticated verification systems for nuclear weapon tests. He has since been at the forefront of remote sensing and monitoring and has also worked for T systems and before founding Axino. Ihab holds a Bachelor of Science in Computer Science from the University of Vienna.

Ihab, welcome to our digital industry leadership podcast

1:32
Ken, thank you for having me.

1:36
It's a pleasure to finally host you, I know we've been talking with Axino for over a year trying to work toward this investment and to get closer to you particularly, so we are very happy to have you finally as the Momenta family or I guess, conversely, that Momenta be part of the Axino family. So, let's start I always like to kind of start with a person's background and so what would consider being the red thread through your professional journey?

2:12
Well, I'd like to see myself being a translator. I'm always trying to translate data, what we are gathering to make something out of it to make a meaningful outcome. Sometimes it's about translating pain points of customers, creating system requirements, or doing data mining, to create new relations and discover new things. So, it's all about translating the data actually.

2:52
I like that, that's actually a good starting point for this conversation. So, you had a pretty unique start developing what I consider to be truly critical sensing systems for the Comprehensive Nuclear Test Ban Treaty Organization, which is a mouthful but also referred to as CTBTO. How did your early work here inspire your leading role in IoT?

3:19
Actually, working for the United Nations, in particular, the CTBTO did inspire me, in two ways. It was a learning curve, how to value my work, or the work I’ve been doing with totally different KPIs other than profit. On the other hand, it was learning about how to gather huge amounts of data, and how to focus on the primary quality target of the organization itself to monitoring and detecting nuclear explosions on a global level, deploying, hydro, acoustic infrasound seismic stations all over the world. So, we were practically detecting any vibration happening anywhere on earth. And of course, such an approach will produce a lot of noise. But what amazed me, in the development of the CTBTO, was that we did succeed to make use of this unneeded data noise to generate value for others. If you're thinking about a tsunami, for example, we had this, hydroacoustic stations at sea level, detecting all of the sound waves worldwide. So, we are focusing on our primary target and taking the unneeded noise or data, and creating values for others.

5:05
There's probably a general theme that we will capture in a few minutes. You subsequently spent 15 years at Ascom. What I would like to think of as Switzerland's first IoT company, where you became CTO, actually, in 2013, what were some of the key projects that you worked on during your time there?

5:28
There were a couple actually because I worked within the Ascom Group in different departments. I remember one of these beautiful projects, was about ticket vending machines in Melbourne, Australia. So, the communication there was a little, difficult. So, you have to care about the ticketing vending machines, which had only electricity. So, we were using the bus as a mediator for transporting the data. That means each time the bus arrived at the station, the ticket vending machine will exchange the data with the bus. And once the bus gets to the main station, it will exchange it with the backend system.

6:24
And the other one, which I remember very well, was a TurnKey System for managing the Dakota tunnel in Switzerland. We had sensors all over measuring oxygen, nitrogen CO2 in seconds and we had to store the data for at least 10 years. So that was where I came to learn how to manage huge amounts of data, and how to tackle that with the managing system.

6:56
In January 2016, you spun out Axino solutions, focusing on, the nascent IoT space, what inspired you to create this company?

7:11
Actually, it was the definition, the core definition of the Internet of Things. I started asking myself, what is a thing? Because I'm used to something working for us, commands on quality monitoring a lot of equipment’s, let's say, assets. And then I thought, I would like to have a more direct approach. To define the thing as something different, like food, a piece of meat is a thing for me. And I wanted to bear all of this experience that I gathered through the years from CTBTO or Ascom. And their nature of offering turnkey systems to drive New research projects, with research institutions with this experience. So that was actually the key, I wanted to focus on connecting the worlds of research and, b2b business.

8:18
I guess bringing back your translator red thread in that regard, a bridge between both. What is Axino value proposition?

8:30
We have a couple of pain relievers, some added game creators simply defined we have three areas we are reducing food waste, through more visibility into the quality management of the food itself, we are reducing the energy cost of the coolers and increasing the food quality itself. Of course, such a system is much less valued if not paired with operational process integration running at the retailer supermarkets.

9:02
So, as I understand Axino value proposition you are focused on validating what's called core temperature. What exactly is core temperature measurement and how is this traditionally measured?

9:19
Well, it's an old approach with a logical deadlock. Newly interpreted by Axino AI, traditionally, Quality Managers have the duty to measure the quality of the food sold in the stores. One of the main distinctive marks is the continuous measurements of the core temperature of the various food groups. The logical problem to arise from the fact that the more measurement you do or when you are taking a probe to measure the core temperature, it will produce more food waste. Simply put, you cannot sell a piece of meat, as an example, after you pinch the plastic bag to measure the temperature. So, it was a situation where you cannot actually do more testing to reach more quality or more quality monitoring because you will produce more food waste. And we wanted to tackle that to have a contactless measurement of the core temperature, and to be continuous, 24/7 for the various food groups.

10:39
What are some of your key use cases and, and wins?

10:45
Well, there's a couple of facets for this because of the food quality itself, from a sense point of view, if I put myself, and the shoes of a retailer, a customer would go to the supermarket with the highest food quality or the fresher food. And then they will collect, the other foods that they buy normally like canned food, and so on. So, it's a driver for more sales for the customer themselves. That is the first part. The second part is, a couple of years ago, it would be hard to imagine that the discounters would sell sushi at their source. Nowadays, it’s normal. So, I think it has had to do with our society or how society develops, we always try to get fresher food. So, maintaining this level of freshness is very critical or became very critical to retails. That's why quality monitoring, management, and systems are so important. 

The other thing is how much effort do retailers do invest in maintaining such quality monitoring, it's a huge amount actually, which each store has to take the time and measure each day and look at the core temperature of the food and quality management. This is why I was talking about the IoT or Internet of Things. Now, if you consider the thing as the cooler itself, the cooler is just a means for the food to be cooled. So now, you don't know how your food is doing within the cooler, you just set it to a specific degree, but this is a variable thing because you have always the defrost cycles within the cooler. With our system, the customer has different insights and is using it actively for setting the bar of selecting the future coolers which he will be investing in based on the core temperature and based on whether this cooler will maintain the quality of the food or not. This maintains quality monitoring and management. The other thing is adapting the energy of the cooler or used by the cooler to maintain the quality or the core temperature.

13:32
So, it's a part of it is reducing that what do you call it WLE, the workload equivalence. And the other thing is reducing the energy used for cooling down the various foods. And reducing the food waste because you don't have to pinch anymore. The other thing is, like a power outage, or cooling problem happens all the time in each and every country. And once it happens, let's say the food store manager will come three o'clock in the morning after four hours of cool equipment after they stopped working. He has to make this decision again. Should I throw the food out or keep the food without having the possibility to have a core temperature measurement. Many supermarkets tend to produce more food than they sell because simply they don't have the insight into the quality management.

14:50
What I think we really loved about Axino when we first looked at it one obviously your largest client is also the largest retailer in Switzerland, so Migros and well known because, of course, Semtech, who drives the LoRa’s standard did a use case on you guys about two years ago. And some great videos that Migros did as well. But what we loved about that was the fact that if you look at the regulatory, let's say risk mitigation that you just spoke about a few minutes ago in terms of food quality with the call HACCP standards, the value of the upside value of better-quality food, and then the upside value of the energy savings, which you talked about earlier. It's a win-win triangle all the way around. And, proven certainly by Migros and in a number of other retail clients that you've worked in as well. Then I think the other aspect is we looked at the business was certainly, you have your own recognition within, particularly Switzerland, the doc countries, as an expert in, what you one might call, Quality Management 4.0, a play, of course, of the Industry 4.0. So, putting that hat on, what do you see as some of the key drivers and opportunities for food quality and quality management in the next five years?

16:27
We are now at an opportunity window, three years ago, European Union introduced the regulatory to write down the temperature of frozen food, in the United States California, they started with this regulatory in 2018, so we are moving towards having a nice to have regulatory to a regulatory issue. Because on a global level, 30% of all perishable food goes wrong within the cold chain. This was a study, published by the University of Cologne in 2019. So, I think we are moving toward this regulatory, the problem is institutions do not know what this kind of intelligence is, and it was developed by Axino. They don't know that such a thing does exist in the world, and they can put it in their regulatory. So, I think, the more we advanced in time, the more the system possibilities exist. The more progress we will see in the regulatory instructions for supermarkets, restaurants, and the cold chain.

18:12
As a result of that, is a bigger business opportunity for Axino. So, Momenta ventures recently invested in Axino, you're actually our newest investment, and of course, we're working together to accelerate the company. Tell us a bit about the progress and really the plans from your perspective?

18:35
Well, the good thing, about working with you Ken and momenta, is you have helped us to focus on our main service, which is food quality management. And we are seeing progress right now in setting it as a standard on a global level. So, we're not thinking only on a Swiss level or German-speaking level in Europe, but really on a global level, because we did challenge that in different areas, in different continents. And the need is exactly like here in Europe. I think with the help of Momenta, we are getting much more awareness on the global level. And focusing more on our core new service, which is food quality management.

19:35
I've often bragged internally about how fast you guys are moving and forgive me, for the Swiss comment but for a Swiss company. I owe a lot of that just to your own leadership. But, in a very short time you've brought in a new CEO, ahead of hardware, head of sales, new board member, and also with some very deep experience in the retail sector. We are pretty close to securing a sizable seed round from a large strategic investor. And, and of course, all the little things like ERP systems and, and web presence and all that kind of stuff. So, the company has moved really, really fast. And we're very excited to be part of it and where it's going as well. Finally, the question I always like to ask is kind of what books people, and or resources inspire you?

20:36
Well, my favorite book in this sense, is good strategy bad strategy, by Richard Rumelt. And I read it, I think a couple of times. I like it very much, and how he interviews, the CEOs from all over and challenges their strategy. And actually, in the Axino AI, I'm following, a specific strategy, which is quite valuable in the book, which was used actually by IKEA, the furniture producers.

21:16
All right, good strategy, bad strategy. Definitely, one that I will have to put on my reading list, and then we'll have to have the test question of the IKEA strategy in there. So Ihab Thank you for this insightful interview today.

21:32
Again, thank you for having me here.

21:34
So, this has been Ihab Hourani CTO for Axino AI who are providing food quality as a service and if I don't mind saying so, a translator of great ideas, so he has it's been a pleasure having you on here. Thank you for listening. And please join us next week for the next episode of our digital industry leadership series.

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