The return of a ghost technology

About 17 years ago, Nestle UK abandoned a project called “self-heating coffee can, drink hot when you want” due to two major bottlenecks, leading to very poor sales:

  • The self-heating package reduced the coffee volume, a huge disappointment for many consumers as a can of 330ml   contained only 210ml of coffee inside, even though the volume was spelled out on the label.
  • It was designed to reach 40°C to the liquid when it was opened, which is fine when the starting temperature is 25°C, but not so great in the cold weather. So what is the use of “hot coffee whenever you want” which is not hot enough during the winter?

It was said the self-heating can technology was born due to the military demand, albeit with a high tendency of explosion during the early days. Over the years the much-improved solution was using Quicklime (calcium oxide) which would heat up rapidly when mixed with water but could take up half of the packaging. That partially explains the Nestle’s failure on this.

Recently this ghost-like technology suddenly revived with new energy.

In the past 10 years, an American company HeatGen has filed numerous patents and last year unveiled the new technique which allows CPG brands the ability to offer ready-to-drink (RTD) beverages that heat themselves in two minutes, single-serving, one-use cans. The cost is said USD 1.5 per package and HeatGen has raised USD 6 million so far.

In Spain, a company called 42Degrees acquired the patent for self-heating coffee can and in 2018 started its commercial sale at the pricing around Euro 3 depending on the distribution chain. It takes 3 minutes to heat up the can to 42°C activated by just a “push”.

In China, a local startup also tries to innovate the self-heating technology. The mechanism is illustrated below and the heating process takes about two minutes by a push button. Although it is still in the prototyping stage, the startup claims it is able to put any size of aluminum cans into its paper packaging and customize the design based on each client’s specific request.

 

Today the startup evaluates self-heating packaging is a blue ocean of RMB60 billion market size.  When comes to the beverage, Chinese consumers prefer the “hot” idea during the cold season. In the west, drinking icy water or cold milk is often considered a norm for children whereas in China it is a big NO NO. From soup, tea to even traditional Chinese herbal medicine, the startup sees itself more diverse applications at a much lower cost compared with above mentioned foreign companies.

Interestingly for some local VCs, they cast their doubts on the startup’s proclaimed self-heating patents and wonder how easy the technology will be emulated as potential competitors could conveniently get hold of the package and dissect the internal structure; they also question how many CPG brands are willing to spend money on a pilot project like this as the strong need for self-heating packaging usually arises from natural disaster, war zone, poor&rural area, or perhaps camping in a remote mountain etc, not necessarily in a fully equipped modern day office or home environment adding most efficient e-commerce and delivery services on top; for instance we can simply purchase fresh hot coffee directly from countless offline cafes or online order.

Despite the indifference from institutional VCs, the startup said they have received strategic investments from major packaging companies and primary beverage distributors for brands like Nestle in China. The founder is very confident that the comeback of this old idea will not be a phantom this time.

By: Cecilia Wu