Commercial refrigeration is a big business, and well-maintained refrigerators protect thousands of dollars worth of food or medical products. Mike Capuccio, owner of N.E.T.R., Inc., talks about the ins and outs of commercial refrigeration. Listen or read more to find out about commercial refrigeration.
John Maher: Hi, I'm John Maher. I'm here today with Mike Cappuccio, owner of N.E.T.R., Inc., a residential and commercial HVAC and refrigeration contractor in Massachusetts. Welcome, Mike.
Mike Cappuccio: Good morning John. How are you?
John: Good, thanks. Mike, today we're talking about commercial refrigeration. How did N.E.T.R. get started with commercial refrigeration?
Mike: That's a very interesting question John. It goes back about 30 years ago today. What really happened was N.E.T.R. — a lot of people ask me what N.E.T.R. stands for. Well back 30 years ago when I first started this business, I was in the transportation refrigeration business, so it actually stood for New England Transport Refrigeration.
John: Oh, like refrigerated —
Mike: Refrigerated trailers —
John: — Trucks and trailers.
Mike: Trailers, trucks, and stuff like that.
Mike: That's how I started this business. That's what I did 30 years ago. I did that for probably the first 10 years of being in business. What transpired out of this was I had went back to school at that point in time and started to learn more about commercial refrigeration and how it worked and the inner meanings of what actually happened with that type of system and learned how to repair those systems. Because I was looking at my business at the time and everybody that I did truck refrigeration work for all had refrigeration in their buildings because they were taking refrigerated food and whatever it was out of the building and putting it into their trucks . . .
Mike: . . . time. They had all asked me, "Do you work on coolers? Do you work on freezers?" I really didn't at the time, but I knew they would be a good fit for me to expand my business with that. That being said, we don't do truck refrigeration anymore, but everybody knew me as New England Transport Refrigeration or N.E.T.R. I said, "You know what? I really can't change my name. I wish I could." But I'm so far into it now to change all the marketing material and do everything, we've just rebranded our name now to and N.E.T.R. Heating and Cooling Systems. That's how we got into the commercial refrigeration business, and we haven't looked back for the last 20 years now on doing that so . . .
John: That's interesting.
Industries That Rely on Commercial Refrigeration
John: Yeah. What are some of the typical places that use commercial refrigeration systems?
Mike: Well I mean, I have seen a lot of different uses over the past 30 years and we're very strong in the wholesale food industry, the produce industries, people that sell produce, produce companies, food supermarkets that have walk-in type coolers or warehouse type facilities. We do a lot of warehouse refrigeration more commercially. Now in the last 10 years, what we've got involved a lot into now is the pharmaceutical and medical buildings and places like that, that have very, very tight temperature control for the products that they store.
I mean some of these places, I don't even know what's in these coolers, but they're big freezers of vials of certain things. It could be DNA. We do some work at Siemens Medical. There's all these blood samples and things like that that are in these places, but that's a very, very tight, tight temperature control where there can be zero variance in the temperature in the room.
Let's say it's a 40-degree room, it has to stay at 40 degrees on a constant fine line of 40 degrees. Whereas in . . . with food, you have a little bit of a variance in the temperature, the cooler might go from 38 degrees to 40. Where these, you can't do that. You can't have a tolerance of two degrees in a product. The product has . . .
John: It can only be a half a degree or something.
Mike: Yeah and not even a half a degree, sometimes a 10th of a degree.
Mike: Most of those medical type devices that we've been doing a lot of now, they have what's called redundant refrigeration systems so if one breaks, one comes on. They lead lag, one comes on runs for a week, that one shuts off, the other one comes on for a week. But the products, they're so much money and they're so sensitive to temperature that there's zero tolerance for breakdown or if something doesn't work or something like that. They're all on backup generators so if the power goes out they . . . Some of these rooms I'm hearing, have over millions of dollars worth of product in them.
John: Right. You said warehouses obviously have those types of a walk-in coolers and things like that or walk-in coolers even at supposedly restaurants and things like that. Restaurants use your systems?
Mike: Yeah, restaurants. We have a lot of restaurants that use small walk-in coolers they might be eight feet by 10 feet, something like that. Small restaurants, places like that that's food that's more of a food distribution type thing in a restaurant. But the stuff we're doing is more a lot of warehouse stuff, a lot of bigger coolers.
We just finished a big project now out at Ken Salad Dressings out in Marlborough. I mean that was a 400,000 square foot cooler for their dressings and stuff that are going into there now, I mean with a big loading dock that was all refrigerated as well. I mean, we've got some pretty sizable projects under our belt now for the last 10 years now going out there so-
John: Right. Right.
Mike: It's a very specialty type thing. A lot of guys in our industry don't do refrigeration work. They all do air conditioning work. They don't do a lot of refrigeration work. I've been brought up in the refrigeration market. I was always in that business and air conditioning came as a secondary thing to me, where my nature and my full knowledge is really in the refrigeration background.
John: Right, interesting. Do you do any work with supermarkets and things like that that have those coolers and freezers for the food again?
Mike: We do. We do some supermarket work, but it's very limited on what we do. We're not doing you're big Stop and Shop and Shaw's, like that. We're doing more small mom and pop type supermarkets, things like that. Some of the bigger chains are done by a lot of the bigger companies and it's hard. It's a hard business to really do that 24 hours, seven days a week. With a big chain you need a lot of people to do that.
We like to really form relationships with people, know the people we're working with, and we really want to have a good strong working environment with the owners that we deal with, not just someone answering the phone in California somewhere and they don't even really know what you do and there's no relationship there really. That person's there and then they're gone two months later.
Types of Commercial Refrigeration Units Used
John: Right. What are some of the typical commercial refrigeration units or equipment that you're working with or installing?
Mike: Well right now John, we work in the 25-horsepower market and down. I mean what that means is, it's very similar to an air conditioning system. There is a condenser that goes outside that usually is up on a roof of some sort or outside on the ground, and then inside there's evaporator coils as well. We try to work on the 25-horsepower market and less than that.
I'll give you an example of what that might be. A one horse power system for refrigeration might be for a small walk-in cooler in a restaurant. A 25 horsepower system would probably be in a 100 by 100 foot cooler, so there's a wide variety of systems that we do work on in between. We take one to 25. There's a lot of different sizes of equipment that we do work on in that market.
Common Commercial Refrigeration Issues
John: What are some of the common commercial refrigeration issues that you're dealing with?
Mike: Well, definitely one of the biggest issues that you deal with on a regular basis is lack of maintenance. Summertime comes and the condenser coils are dirty. Sometimes they don't clean coils. It's not a regular maintenance program going on. First hot day the system doesn't work because there's been a lack of maintenance at that point. Really most of our people that we tend to work with right now, we really try to lock them into a maintenance agreement where we're coming out there two times a year, Spring and Fall, to at least check out the systems and make sure that they're working properly, make sure that things are clean.
Probably the second biggest problem that we see with commercial refrigeration systems is refrigerant leaks. A pipe joint is leaking, it's leaking refrigerant, things like that that we see. Then probably third would probably be clogged drains because these do drain. Just like when you have your air conditioning on in your car and you see water dripping on the ground, water does drip out of a commercial refrigeration system so sometimes drains tend to get clogged.
But again, the biggest problems we're seeing are all maintenance related issues that can be fixed and seen prior to something happening where it's just not just, "Oh it's now and you need to come out and fix it." Most of these things can be repaired prior to having an emergency service call. That's why we really stress the maintenance programs.
John: Especially when you're dealing with any sensitive things that need to be cooled, just having a problem where it's broken and not functioning, that can just immediately cause huge problems to . . .
Mike: Oh yeah. I mean . . .
John: Your business.
Mike: Well sometimes it amazes me is people try to save $10 and they end up spending $10,000.
Mike: I always say to a lot of the people that we do work with I'm like, "What's the dollar amount of all that food or all that product that's in that particular cooler?"
Mike: Most of the times they look at me and they say, "Well, it's anywhere from $250,000 to $1 million," sometimes. I say, "Well, a $2,500 maintenance agreement when I don't have to be here on an emergency service call because you have a dirty condenser coil." The other thing too is if we can fix a refrigeration leak on a system, I mean some of these 25-horsepower systems or even a 15-horsepower system can hold upwards of 100 pounds of refrigerant.
If you take 100 pounds of refrigerant at $15 a pound, I mean do the math on that. If you lose all of that refrigerant due to that leak, that's going to cost you a lot of money. If you only lose 25% of that because we see it when we're there on a maintenance, I'm actually saving you money. I can repair the leak and add refrigerant to it. You haven't lost the whole charge at that point.
I mean a lot of times when the condenser coils are dirty and you're running at an extremely high pressure so you're causing a bigger stress on the system. You're creating more pressure on those joints and that can make it leak even worse at that point. Again, clean coils, refrigerant checking, cleaning drains, flushing drains, cleaning the indoor evaporator coils too.
That's probably another big problem too, is that you have food in there and cardboard boxes and stuff, it creates dirt on the indoor evaporator coils that need to be cleaned every six months. It's when you go in there and no maintenance has been done for five years and the cooler's not working now it's like, "Okay, let me . . . " Now we have to clean everything and get everything up to snuff and then they say, "Okay, I want to be put on a program." Then you come in every six months so it's a third of the time to clean something when you're cleaning something every six months.
Mike: Envision if you didn't clean your bathtub 10 years or if you cleaned it every day. You know what I mean? It's going to be cleaner. It's a lot easier to maintain.
John: Right. All you have to do is give it a quick wipe down every day and your fine.
Mike: Yeah. You give it a quick wipe and it's good, you know?
When to Repair and When to Replace
John: Yeah. Right. Right. Right. You're talking a lot about maintenance and that's great. When people do have problems and things are broken, do you tend to come in and do repairs and fix them or do you sometimes have to replace the whole system?
Mike: Well like anything else John, everything's got a shelf life. A typical commercial refrigeration system has about a 20 to 30-year life expectancy. I like to tell people around the 25-year mark, you've pretty much run the course of what you've there. Have I seen things last not as long? Yeah. I mean again, lack of maintenance. You're probably going to change that system maybe at the 15-year mark, 15- to 20-year mark because then it's not going to be any good at that point. Like anything else, the better you take care of it, the longer lasts.
We see a lot of different types of things like that, but up to that 10- to 15- year point, you're doing basic repairs, possibly a fan motor, an indoor fan motor on the evaporator coil. A condenser coil fan blade or something like that could be being done on that or a contactor or of some sort, compressor crankcase heater, things like that. You're not doing big major repairs.
But when you get to the 25-year mark, you've got a compressor with pistons and things start to wear out. That's the point where the coils are starting to corrode. you've got a unit that's sitting out on a roof now for 25 to 30 years. It's going to get weathered and beat up at that point. Now it's time to start to look at, "When are we going to change this equipment?"
Through a maintenance program you can monitor repairs and see, "Okay, how much have I spent on this piece of equipment in the last five years?" I see a lot of times on a 25-year-old, 30-year-old piece of equipment, that people have spent $25,000 repairing this thing in the past five years. Well to replace it would have been $25,000. In reality, if we placed it back then for the 25 you wouldn't have spent the 25 and you still would've got another 10 to 15 years out of it from there so again, it sounds like a lot of money, but you're going to spend lot of money on these systems when they get older. The same thing with HVAC, when you look at a rooftop unit on a roof with the air conditioning, everything has a shelf life.
Mike: People think because we do maintenance on something all the time that nothing's going to break. Well, it's still 25 years old.
Mike: You know what I mean? You can change your oil and put a new set of tires on a car that's 25, 30 years old but you still have a 25, 30-year-old car.
John: Right. Right. Yeah. It's similar to owning a car where once you start hitting that point where you're going a couple of times a year and spending $1,000 to get it repaired. You know what I mean? You start to think about, "Well maybe I should buy a new car."
Mike: I mean think about that point, yeah exactly. Well, my car keeps breaking down. I think it's time I've got to buy a new car. Well my refrigeration system keeps breaking down, maybe I should buy a new refrigeration system. It's funny sometimes, people just don't think like that with refrigeration stuff. It's really odd to me sometimes but, that's our specialty. That's what we've got to get across to our customers and be spelling that out to them through the maintenance programs and saying "When you do . . . "
That's the other good thing about doing maintenance and doing the visual inspections. If you're there every six months, you're seeing what's going on and now you have history to go back to someone versus walk-in in where you haven't touched this thing for five or six, seven years sometimes.
Mike: You just don't know.
John: You can start planning for the future so you can say, "Hey, I think this system is probably going to last another three or four years, so maybe you want to be starting to save up for a new system now so that you're not hit with . . ."
Mike: Capital improvements.
John: Right, yeah.
Mike: Capital improvements, you know what I mean? When we go into businesses and think about how businesses . . . You have a computer, I mean that computer has a shelf life.
Mike: A refrigeration system has a shelf life. It's not two years, it's 25 to 30 years but I mean that's when you've really got to start looking at, "Hey, this is costing me more money than what it would cost to replace."
John: Right. What are some of the issues that you run into with commercial refrigeration repair and replacement in terms of, do you guys end up having to come in and do a lot of construction? Do you have to work with towns to pull permits and things like that?
Mike: Yeah. Yeah, great question. There's some things that have to be done there. Most of the time it's a mechanical permit that needs to be pulled, some towns it's a building permit. Depending on where you're working, electrical permits need to be pulled as well. Most times now when the building permits are getting pulled, if the units are going onto a roof, there's got to be a structural review of the roof because of the weight of the equipment.
You have to make sure that the roof is going to support the weight of the equipment. You could take a 200-pound unit off the roof and put a 2,000-pound unit on the roof. At that point you're like, "Okay, I got to make sure that this roof is going to be able to support this." Nine times out of 10 no building permits are going to be issued when they know something's going on a roof without a structural review so a structural review has got to get done.
Then there's refrigeration piping between the indoor unit and the outdoor units that would be put into a place. When you're doing a replacement, the piping needs to be replaced so all of that's going to come out. You're going to need a roofer most of the time to seal roofing. We have a roofing subcontractor we work with. We have electrical subcontractors we work with. We have our own electricians on staff too as well. You're going to need some more multiple trades. Sometimes you need a plumber to do the drain work as well.
There's multiple trades that are involved in it, in replacing a system as far as doing that but, for the better part of that, we do that every day. We know how to do it. It's really not a problem. Once you've done this for as many years as we have, we know what the routine is on what's going to get done.
John: Right. All right, well, that's really great information Mike. Thanks again for speaking with me today.
Mike: Thanks John.
John: For more information, you can visit the N.E.T.R. website at netrinc.com, or call 781-933-N-E-T-R. That's 781-933-6387.