Origin Story Interview W/ David Cutler, Fortuna Cools

Origin Story Interview W/ David Cutler, Fortuna Cools

Brighter Future

 / 

May 24, 2023

#BrighterFuture #entrepreneurship #Sustainability #ClimateChangeSolution #originstoryseries #seekthechange #CircularEconomy #biodegradablecooler #PlasticFreeLiving #packagingsolutions #coconutfibres #plasticwastereduction

Brighter Future

On this edition of Origin Stories, we’re happy to share the story of David Cutler and his company Fortuna Cools, which makes biodegradable coolers and packaging from the fibrous exteriors of coconuts for traditional fishermen, everyday users, and companies in need of insulated containers.

Thank you so much for joining us, David. Could you please introduce yourself and your work?

My name is David Cutler, and I’m co-founder and CEO of Fortuna Cools. Our company transforms agricultural waste into insulation, packaging, and other useful materials to replace plastic foam and other plastic waste. We operate in several different business lines and markets, but our ultimate goal is to replace plastic with upcycled agricultural waste and natural fibres.

Could you tell us a little more about the type of natural material your company uses?

Our primary material is coconut fibre, which we extract from the husks that cover the cores of coconuts. They’re discarded en masse during the production of coconut meat, coconut oil, and coconut water. Husks are usually considered waste, but their fibres have extremely practical qualities that we’ve put to great use.

What is the main goal you’d like to achieve with Fortuna Cools?

Our main goal is to demonstrate that we can rely on something other than plastics for everyday use and products. As a society, we tend to default to plastics, but there are biodegradable and natural materials that can not only compete with plastics but even outperform them. Our goal is to replace plastics— especially low-value, single-use ones— with natural fibres, and thus eliminate plastic waste wherever possible. By looking at the natural world and the materials around us, we can find innovative solutions to reduce plastic usage.

What was your journey, so to speak, and how did it lead to Fortuna Cools?

You might say it’s been the proverbial long and winding road. I studied politics and language in college and was interested in positively impacting the world. I worked in international politics for several years in Washington, DC, but I missed connecting directly with people and their problems. I've always been interested in the relationship between people and the environment and how environmental factors affect people's lives.

Over time, I became more interested in climate change and its impact on human rights issues. I moved to India to work as a consultant for social enterprises, and learned about new cultures and communities. I returned to graduate school and got excited about social enterprise as a model for positive impact.

While at Stanford, I worked on a project in the Philippines that dealt with the cold supply chain and food loss. This project touched on all the issues I had been thinking about for the previous decade, and was the beginning of Fortuna Cools. My co-founders and I have been working on turning Fortuna Cools into a growing and impactful business ever since.

Was there a point where you actively decided to create Fortuna Cools as a business, or was it a natural step from your student project?

It wasn't a natural step but more of a result of the enthusiasm in the communities we were working with. We received great feedback and met many people who invested in the solutions we worked on. It was almost impossible to imagine finishing the project and saying goodbye to the people we had worked with.

What gave you the confidence to start Fortuna Cools as a business?

From the beginning, it was a huge source of confidence to just work closely with our customers and whoever used our product. Our customers were co-designers of our products from day one, and there was never a huge gap between what we were building and what they wanted. This has always been the case, and remains so in all the businesses we’re involved in.

Despite the risks in our business, we have always ensured that we're solving real problems, and that we’re on an effective path by getting products into our customers' hands early and often and iterating with them. This is something we’ve built into the company's ethos.

It can be nerve-wracking to give early prototypes to customers and get their honest feedback. Still, we’ve found that inviting collaborative design with customers can be very helpful in reducing the risks around product release, debugging early designs, and guaranteeing that we’ll have an early-adopter community.

What would you say is one of the most fulfilling parts of your work?

It’s really important to me that we’re able to positively impact the environment and help reduce plastic waste. It's great to offer a sustainable alternative to plastic that also helps support local communities and farmers.

Another fulfilling aspect is seeing the growth and progress of the business and the positive feedback we receive from our customers and partners. It's also rewarding to work with a team that is passionate about the same things and is dedicated to making a positive impact.

It’s been an amazing experience to build our team in Southeast Asia. Our team members are brilliant, and different from the traditional business-development guys who sit in offices in places like San Francisco. They’re a source of inspiration and creativity. Building up that early team and opening up all that creativity and inspiration has been a lot of fun, whether it comes from the rural Philippines or my co-founder and me today.

Another fulfilling aspect of my work these days is having an early community of users and customers. We help them overcome a significant challenge: reducing the consumption of plastic and the production of problematic waste. It's gratifying when our customers express relief after swapping out plastic for something natural and biodegradable that also helps the community— which is a fantastic story in itself. I love it.

So you’re currently based in the Philippines. Do you plan to expand into other rural areas?

We have ambitious growth plans, as our product and services are in demand worldwide— particularly in tropical regions. The Philippines and countries with similar environments have a perfect combination of excellent raw material sources and significant insulation and packaging needs. The tropics are just hot and humid, after all, and a lot of places lack reliable access to powered refrigeration. We’re planning to expand to a few countries in Southeast Asia soon, with Vietnam and Thailand at the top of the list.

We've already worked in both countries, but we need to build the same strong and locally embedded production ecosystems there that we have in the Philippines. Our business scales well, but each market has unique aspects we need to learn from. We’ll be expanding further around Southeast Asia in the coming years, and we're already receiving inquiries from people who want to access the value of this natural (and practically ubiquitous) material.

Have you ever taken a completely different direction than planned in your business or personal journey?

Yes, it’s happened a few times. Each time, there was a big pivot, whether personally or professionally. The key is to dive in headfirst with good intentions; this usually brings good results, though it can be a little uncertain.

I moved from a secure job and clear career path in Washington, D. C. to a social enterprise on the other side of the world where I didn't speak the language or have much background in the technology I was working on. It was quite a shift, but I felt strongly about it and was excited. I came out the other end a better person and employee.

At the beginning of COVID, we took an equally significant risk with Fortuna. It was a challenging time for many customers in Southeast Asia— a lot of companies had to shut down. Our business model was at stake, but by then we had a great product ecosystem and a great product.

We looked for new markets, and turned to the consumer market. We were able to grow with the outdoor gear market while the food and beverage industry struggled due to broken supply chains.

Our first design had been developed for fishermen, allowing them to fold up their coolers before they cut fish and then to expand them later, after they’d cut up bigger fish at sea. We took this design and modified it, producing something for a different customer: one who loves camping and picnicking and wants to avoid using single-use plastics while on their adventures.

We used natural materials for this product, and took a considerable risk in shifting our business direction. But at the end, we found a fantastic community of early adopters on the consumer side, just as we had on the business side a couple of years prior.

Are those your primary audiences today?

We're currently very active on both sides. Only in the last few months has our packaging business come roaring back, and many customers in Southeast Asia are lining up to trial and increase their orders. At the same time, we have a huge backlog for consumer-facing products in the US and Europe. We are still adjusting our split between the two sides, as we have more supply constraints than demand constraints.

Over the past few years, we have shifted our focus to the consumer cooler, where most of our energy is today. But the place we can do the highest volume of plastic displacement is on the packaging side in Asia, where we have the ability to convert tons of otherwise-discarded materials into useful products.

In the future, it may be an even split, but for now, consumer products dominate our sales.

You mentioned earlier the challenges that you faced in the Philippines. Are there any significant ones that stand out to you? What are the biggest challenges with Fortuna?

Every day brings a new challenge; maybe that’s why I like this job so much. Nothing is predictable when you're building a brand-new supply chain and developing new materials.

One challenge is replicating the product ecosystem we spent a long time building in just a tiny part of the Philippines. We're trying to set up scalable processes, these days; the idea is to create a playbook that we can use in more places rather than spending years each time getting a new site started. We want to avoid the mistakes that came with setting up our first factory operation.

Another big challenge is dealing with natural materials. Working with natural materials involves some degree of inevitable variability because we’re working with the organic and natural world, instead of against it. But there are so many benefits to utilising them: they have built-in characteristics we don't have to engineer in a lab because they have already evolved for installation and durability. We are beneficiaries of millions of years of evolution.

The reason factories love plastic, of course, is that it’s so standardised. Plastic has a simple chemical formula. You take the same input, do the same thing, and get the same output every time. Natural materials throw curveballs every now and then.

When scaling and starting the second factory, you mentioned avoiding the mistakes made in the first one. What were the biggest lessons learned from scaling up the first time?

We made a lot of scientific material mistakes in the early years, and our recipe book has come a long way since then. It's now easier to apply all the lessons learned to new factories and supply chains.

We’ve saved a lot of time by working with small, existing factories, rather than building our own. We work closely with a factory’s engineers, mechanics, and managers, and it's crucial to be present from day one, as it guarantees quality and facilitates translating our processes and instructions into something that’s locally relevant, vis-à-vis local customs and product availability, and understandable. We’ve been more hands-on in our manufacturing process than one typically sees in a contract relationship.

Balance between our input and our manufacturer’s way of doing things was something we needed to understand better at our first factory. Our biggest lesson was how to perfect this balance in new places, and with new supply chains.

Have you ever had a big “Aha!” moment that has benefited Fortuna Cools, or your personal journey?

Believe it or not, the company didn't start as a natural materials company. We started as a supply chain solutions provider. The major turning point for the company came after manufacturing plastic coolers for a couple of years. While we solved one problem, we created another in the form of pollution and high costs. We were making these boutique, cleverly designed coolers from advanced plastic components, which were great for high-quality produce and fish, but not suitable for the local ecosystem or economy.

The big “Aha!” moment that changed the trajectory of the company was when we looked around one day in a fishing village and tried to imagine what materials we could find locally, instead of sourcing them from China. It seemed possible that we could find materials able to do the same job or better for less money and within 50 miles of our customers.

In coconut-producing parts of the rural Philippines, piles of coconuts line nearly every street. These coconuts sit out there for huge amounts of time— weeks, or literally months— and they hardly seem any worse the wear for it. People end up burning them to get rid of them because they just stick around for so long.

So naturally, we thought they were interesting. They seemed like a pretty durable material. Of course, coconuts may be less durable than polystyrene, but they’re nonetheless very sturdy and capable of standing up to the harsh weather and humidity of the Philippines, all while still being extremely biodegradable.

Coconut fibre is used as potting soil; gardeners often use it to sprout seeds. It’s about as Earth-friendly as you can get.

In the end, we just realised we should investigate this material that we’d been practically tripping over for the several years we’d been working in the Philippines. That “Aha!” moment sent us down the path of biodegradable fibres, and we haven't looked back since.

When did this “Aha!” moment happen?

The “Aha!” moment came as we ran our business. Making a product using alternatives to plastic wasn't planned— our top priority was just to be responsive to customer needs. But the first and most important thing they told us they needed was a better cooler.

So we built them a better cooler. But then they told us they needed it to be much cheaper: so we got onto making it cheaper. We just focused on solving one problem at a time.

That's how we ran our business— unlike material scientists in, say, some lab at Stanford, who developed materials first and then looked for a market where it could turn into something needed. It was just the opposite for us: our material had to evolve to meet present needs.

How did you transition into the climate space?

Though our founding team is passionate about the environment and emissions reduction, we had more of a high-level idea than a tangible business plan. From the start, I really did not want to work in a business that would increase pollution or emissions, but I also wanted to ensure that our project solved a real problem for a specific audience.

With the direction we’ve gone, I’m really excited to combine a practical business model with a positive impact. Every aspect of our work seems to have positive impacts, which is just great.

The use of our product has reduced fishing pressure by encouraging the quality of fish cuts over quantity— this was fundamental in our initial business model and product development. We also reduce the amount of agricultural waste burned in the Philippines, and instead upcycle it into valuable material for our customers.

On top of all this, we eliminate plastic production and disposal throughout our customers’ usage cycles. Though climate is crucial, our primary focus has been to solve the problems of real people.

What would you say was your most significant personal compromise or sacrifice to get to where you are today?

Moving to the Philippines doesn't sound like a compromise— I get to work on the beach with some of the friendliest people in the world, so as far as I’m concerned it’s been an incredible experience.

When I graduated from Stanford, though, and was trying to figure out what to do next, there were a lot of opportunities, and working in packaging and agricultural waste wasn't the most obvious path. You might say it’s not the most lucrative or glamourous opportunity available. A lot of my friends and family didn’t really understand when I started to get excited about my ideas; they basically saw a lot of other options I could pursue. So while I didn’t consider this a compromise, some of my friends and family seemed to.

My motivation isn't only to help fishermen and farmers in Alibi Province or Lubang Island, locally here in the Philippines, but also to make a major impact on the insulated packaging market, which is a $15 billion industry, and to do something useful with the hundreds of billions of coconut husks that are thrown away and burned every year around the world.

I would like to bring about a significant change in the types of materials and products that supply chains run on and that consumers use daily. It may be a more ambiguous path than one I could have taken, but the payoff for the planet and the people we work with and serve will be well worth it.

How do you envision the future that your business is striving to create?

I have a very clear picture of the future we're working to achieve. It revolves around the materials we commonly use in our daily lives. Plastic is the default for many products, from single-use items to more long-lasting goods. For instance, expanded polystyrene or styrofoam is the default material for insulation, while polystyrene, polyethene, and polypropylene are commonly used for single-use plastics.

However, we need to move towards a world where natural materials and fibres are the default. We should only resort to plastics for edge cases requiring specific values that we cannot find in the natural world. If we change our default choice, we'll find that there are natural fibres that can perform incredibly well. Often, these natural fibres can compete on price with plastics due to the world's abundance of leftover organic materials and how global agriculture works.

My vision for the future is a world where we take home grocery bags made from sugarcane waste, insulated totes from coconut fibre, and even ketchup packets from peanut shells. The world will be built out of materials that already exist around us; plastics will be limited to the few specific things they do better than natural fibres.

How would you like future generations, such as your great-great-great-grandchildren, to remember you and your journey?

As we're working on something that's not obvious, I would love it if our legacy was that of an innovator in the natural materials space. I want to demonstrate what natural materials can accomplish in an everyday, cost-effective, non-edge case scenario. If future generations remember us as one of the pioneers who helped shift the world from using toxic, unsustainable materials to relying on natural ones, I would be incredibly proud. I hope Fortuna will be recognised as an early populariser and innovator in this field.

Do you have any advice for young entrepreneurs or those considering entrepreneurship?

There is a lot of advice out there, but the most important thing is to work closely with your customers and solve a specific and fundamental problem that is deeply felt from day one. More than anything else, ensure that the problem you're solving as an entrepreneur is important and real. This is often overlooked when starting a business, as one may be super passionate about something— but still, that passion may be something other than solving a problem that people are actively trying to solve.

By being ultra-sensitive to users and getting prototypes and ideas in customers' hands early on, you can avoid early struggles and pivots and build a strong company with momentum from the start. This sensitivity to the market and specific customers should be at the top of the list of company formation priorities, even before finding the golden fit between the founder and the product or service they're building.

If there were one lasting message that could reach everyone on this planet, what would it be?

Consider natural materials before defaulting to plastics, because there’s probably a natural material out there that can solve the same problem as well, or even better, than plastics. Nature is the best R&D lab in the world, and there are incredible materials around us.

We should think about how best to make use of elements from the natural world, sustainably, to address our needs before turning to factories and synthetic materials that can be toxic and non-biodegradable.

Well said. Thank you so much, David, for sharing such an interesting story, and a little of your personal journey with Fortuna Cools. Your sustainable insulation technology is extremely impressive, getting an incredible new use out of something humanity has a long history of exploiting, and we really appreciate you taking the time to speak with us. We hope you’re able to get Fortuna’s coconut coolers into as many fishing boats, cars, truck beds, and warehouses as possible— and that, too, you can kick off the revolution in the insulated packaging industry in the global tropics.

If you’d like to learn more about Fortuna Cools, please visit www.fortunacools.com.

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