Kyle Payne Part 2: Refrigeration as a Service

GREG SIMPSON

I heard you once describe Lowe as almost like refrigeration as a service.

KYLE PAYNE

That is, I think, the best way to describe us. And if you think of refrigeration system, it's part of a much more complex system in a store. It's part of your entire mechanical plumbing and electrical system. Maybe not every retailer actually has the expertise to go build that themselves. Maybe it is better to actually say, "Hey, come do this all for me. Make it run, make it work." That's what we do.

GREG SIMPSON

Today on Built2Suit, it's part two of my conversation with Kyle Payne, the head of US sales at Low Rental. Our conversation dives deep into the future of refrigeration solutions, grocery tech, the European market, and how Low Rental helps grocers navigate regulations and sustainability goals by offering refrigeration as a service. This is the show built to build what's next. I'm Greg Simpson, and this is Built to Suit.

Let's pivot over to Lowe. So you're here, you said for four or five years now, you're focused in on a more institutional space, but Lowe's kind of different from a normal refrigeration equipment provider. Talk about the differences just a little.

KYLE PAYNE

Yeah, we're definitely not an OEM. This is what's kind of unique is we don't manufacture any of this, but we work with hundreds of different OEMs. In a very rough sense, we're a distributor, but I think the best way to think of it is we're a problem solver.

We can combine a lot of different solutions and services and package it in a way that a lot of other people aren't right now. So what I always tell people is we can take a problem and whatever length of time that problem needs to have to be solved, we can bring all the solutions and services you need from a fridge standpoint to bear and fix that problem.

So when people come to us and say, "Hey, we're really struggling to figure out how to launch an e-commerce fulfillment center as fast as humanly possible, because the normal way of doing it would take 10 months. We can do it in 10 weeks." You're solving a problem there. That's a big problem.

It's just taking a very different approach to what's typically been done in the industry with using a lot more modularity, not really leading with the product. The product is not the thing that matters. What matters is what you're trying to do, the constraints, the time constraints, space constraints, and how you bring all the necessary pieces to solve for that.

GREG SIMPSON

So I've seen your self-contained products. Is self-contained part of the solution to getting the time advantage?

KYLE PAYNE

For most of what we do, self-contained is a huge part of it. We thrive on speed and being able to move very quickly. That always favors a self-contained, modular, plug-and-play solution.

I think the industry's been limited over the years in thinking that self-contained can only be a spot merchandiser or the Pepsi fridge at checkout. That’s evolved a lot over the last several years.

GREG SIMPSON

Why did they think that way?

KYLE PAYNE

The technology was limited for a long time. And necessity drives innovation. If you look at Europe, where a lot of refrigeration regulations first went into place, you saw a lot of self-contained refrigeration innovation coming out of Europe. It was viewed as a way to get ahead of regulations in a scalable, fast, and more cost-effective way.

GREG SIMPSON

I was always taught that with self-contained product, you have to dissipate heat into the air and you could have energy penalties. It sounds like you’ve attacked that and overcome it. Tell me about that.

KYLE PAYNE

We’re definitely not the only ones who’ve attacked it. There’s been a lot of innovation in the self-contained world from an energy and heat rejection standpoint.

Should you redo a 120,000-square-foot store entirely with self-contained refrigeration? Probably not. But most retailers aren't Walmart or Target. Many are addressing only 30% of their refrigeration that needs attention. That’s a great application for this type of product.

You don’t have to flip the whole store. You address the parts that are holding you back from a reporting or maintenance burden and let the rest function.

GREG SIMPSON

I heard you describe Lowe as refrigeration as a service.

KYLE PAYNE

That’s the best way to describe us. Think of software as a service — you’re renting software instead of building it yourself. It’s the same concept. A refrigeration system is part of a complex mechanical system in a store. Maybe the retailer shouldn’t build it themselves. Maybe they should say, “Come do this for me. Make it run.” That’s what we do.

GREG SIMPSON

What’s the effective use life of an engagement you’d do with a retailer?

KYLE PAYNE

It depends. If we’re helping flip an entire store, that might be a three-to-six-month engagement. We provide equipment during the transition, then we’re gone.

Sometimes it’s short term because a condensing unit failed and ran an obsolete refrigerant. Other times, it’s longer term — like an e-commerce facility where capacity needs may change in three to five years.

GREG SIMPSON

You’re working with some of the biggest players in the industry. What sets Lowe apart?

KYLE PAYNE

Availability. We generally have equipment ready to go in a warehouse — times 10,000 units. That’s rare.

We can remotely monitor and control assets from anywhere. If we need to de-ice an evaporator, we press a button on a dashboard instead of sending a technician.

We also have our own design and engineering firm. So if there are questions about heat rejection, electrical capacity, or mechanical impact, we can answer them in-house.

GREG SIMPSON

Let’s talk about digital twin technology.

KYLE PAYNE

The amount of data and organization required to model systems effectively is massive. But the benefits are tremendous.

Refrigeration is about controlling climate inside a contained space. There are hundreds of variable control points. With a digital twin, you could model performance under every scenario before placing a purchase order.

Instead of installing a system and discovering problems a year later, you could design nearly flawless systems from the start.

GREG SIMPSON

Do you think that’ll happen in your career?

KYLE PAYNE

Absolutely. The tools are there. It’s a massive lift, similar to self-driving car modeling complexity. But I believe we’ll see it.

GREG SIMPSON

Let’s talk about Europe and the AIM Act.

KYLE PAYNE

The AIM Act includes HFC phase-down, technology transition rules, and refrigerant management requirements.

Europe implemented similar F-gas regulations about ten years ago. That drove major adoption of self-contained propane (R290) and later CO2 systems.

In the U.S., large retailers will have defined strategies. Smaller independents will likely take a piecemeal approach — replacing two or three racks at a time and gradually transitioning over several years.

GREG SIMPSON

What’s the danger of delaying technology transitions?

KYLE PAYNE

You may be allowed to keep using certain refrigerants, but supply restrictions and reporting requirements will drive costs up. Many grocers haven’t modeled that long-term impact.

GREG SIMPSON

What can the U.S. learn from the UK grocery market?

KYLE PAYNE

Shared retail spaces are common there — like a mini grocery inside another large retail store. It’s a creative way to maximize real estate.

They also go all out for Christmas. From a retail standpoint, they maximize every possible sale with extra shelving, fixtures, carts, and refrigeration.

GREG SIMPSON

Tell me about a time you made the impossible possible.

KYLE PAYNE

E-commerce fulfillment centers. We designed combination cold room solutions that combine receiving and picking areas to maximize space and efficiency.

We’ve helped retailers squeeze far more capacity and efficiency out of facilities than they thought possible.

GREG SIMPSON

Why haven’t others taken your approach?

KYLE PAYNE

The upfront investment is massive. Owning tens of thousands of refrigerated assets and building the infrastructure to manage them is a huge leap. Manufacturers are structured to sell assets, not retain and service them long term.

GREG SIMPSON

What would you tell your 23-year-old self?

KYLE PAYNE

Always try to learn. Understand all the pieces that touch your product or service. That carries you a long way.

GREG SIMPSON

Will you be doing this in ten years?

KYLE PAYNE

Something like this, yes. I’ve come to love the industry too much.

GREG SIMPSON

Great conversation. You’ve been on the Built to Suit podcast. I’m Greg Simpson. Until next time, keep building, keep dreaming.