Walter Robb, the former co-CEO of Whole Foods Market, has invested in HeatGenie, an Austin, Texas-based company that has developed a method of heating canned beverages in two minutes by simply twisting the lid. He also agreed to join the board. According to a company statement, his involvement signals the company's readiness to finalize product development and enter the market in the ready-to-drink beverage category sometime next year.
HeatGenie President and CEO Mark Turner — who called Robb's investment "significant" — told Food Dive that the former Whole Foods top executive has "great perspective" and that his involvement will open some doors and help move things along for the technological innovation.
"Walter brings great experience in both CPG and retail and we are honored to have him join our team as we shift from concept to commercialization in the marketplace," Turner said in a company statement. Meanwhile, Robb said HeatGenie's product is "a win-win for both the beverage category and consumers everywhere who will be able to enjoy a hot can of coffee, tea, soup or sake whenever and wherever they please."
This is the second such announcement in a week involving Robb, who recently became an investor and board member with a Colorado-based startup called FoodMaven that sells surplus food via an online marketplace. He seems to be making good use of the $10-million severance payment he received after stepping down as co-CEO of Whole Foods at the end of 2016.
Turner called Robb "super, super smart," and said that he has a good sense of where things are headed in the CPG and beverage categories after the years he spent with Whole Foods. "We're in a shift right now, and I think he sees where it's going," Turner told Food Dive.
HeatGenie has been working on the self-heating beverage technology for about eight years, trying to get the size down so it doesn't take up much container space, Turner said. The mechanism was developed by Brendan Coffey, a chemical engineer who had worked in the battery industry.
"He was thinking one day whether it would apply for CPG foods and beverages," Turner told Food Dive. "He's now our CPO."
HeatGenie doesn't have any real competition now, he said, because earlier self-heating beverage devices took up too much space in the container, had a high failure rate and could never really scale. Nestle developed a self-heating product called Nescafe Hot When You Want in 2001, but abandoned the idea a year later. Nestle found after test marketing that the can didn't get hot enough during cold weather and consumers were disappointed to find 7 ounces of coffee inside an 11-ounce container.
"All of them have kind of run their course," Turner said. "HeatGenie's approach is radically different. We have solid-state technology that only takes up about 10% of the package. It's a good consumer experience and very reliable." He noted that consumers have always loved the idea of having a self-heating beverage container and that brands know it.
HeatGenie is now talking to a number of large global brands and plans to license the technology to them, Turner explained. He said the self-heating technology could add $1 to $1.50 per can at retail but that people realize they would be paying a premium for convenience and portability.
Having a can of coffee, tea or other beverage that heats up when the consumer wants could be a huge development for the CPG industry. As shoppers eat and drink more while on the run, a device that can warm a beverage, and comes contained in a convenient, portable can, could be popular, especially among millennials.
It also could have huge impact on Starbucks, McDonald's and c-stores such as 7-Eleven, among others, that are known for their teas and coffees that people grab on their way to work or for on the road. A new competitor that negates the need to occasionally visit one of those locations could eat into sales. It certainly doesn't hurt to have Robb in the fold, given his overall knowledge of the food and beverage industry and insight into what other competitors might be doing.
The one downside, however, could be the price. While not prohibitively expensive, the possibility of paying an extra $1.50 on top of whatever the product costs may be too much for some people who are used to spending $1.60 for a medium coffee at 7-Eleven. The product seems to have a future, but whether sales heat up once it hits the market is far from certain.
The heater element fits into the lid of an aluminum can and when a consumer twists the lid, it activates the mechanism to heat up the contents in about two minutes. Coffee, tea, hot chocolate, sake, soups, bone broths and even water are potential candidates for the technology, Turner said. The HeatGenie technology is recyclable both before and after activation, he added.
Turner said the product is in the final stages of development and will be showing up in the CPG beverage market next year. "We'll be making some announcements with names you'll recognize in 2018," he told Food Navigator-USA.
The company has done some focus groups to gauge response and expects that U.S. consumers will have a bit of an adjustment getting used to self-heating cans.
"In Asia, primarily in Japan, they've been drinking hot coffee and tea out of cans for 20 years. They have vending machines plugged in 24/7. Behaviorally, it's as normal as anything to them," he said. "With the U.S., it's been nice that people have been used to drinking from bottles and cans, but there will be bit of a behavioral change."
Millennials are a core target for the company because of the premium they place on innovation and premiumization, Turner added. "They have spending power, the technology is done and going to market, and we've got people like Walter and others on our team. We're going to accelerate that much more."