Coke Wants to Start a Hot New Trend

I've always thought Coca-Cola (NYSE: KO  ) and PepsiCo (NYSE: PEP  ) were missing out on a chance to capture a niche opportunity by not marketing their beverages as a breakfast drink. Sure, drinking soda in the morning goes against everything your mother ever told you about diet and nutrition, but the fact is, there are quite a few people who like the crisp, cold taste of a sparkling beverage instead of hot coffee to wash down their breakfast.

Ignoring my free advice, however, Coke's decided to go in a completely different direction, launching a hot soda instead. Now, Europeans may like their beer warm and the Spanish their gazpacho cold, but does anyone really like their soda warm?

Source: Coca-Cola Japan.

Coca-Cola is deploying this beverage only in Japan at the moment, and though there is technology on the market for a self-heating can, the drinks maker is going its own way there, too. Beverage Daily reports that the cans, which will be sold from vending machines and in convenience stores and supermarkets, will need to be warmed up with an external heating source. Coke rejiggered the gas volumes normally found in cold sparkling beverages, which allows the drink to be heated without affecting the fizz.

This is a cheaper method than the self-heating can, which incorporates a double-walled canister that combines the beverage in one layer and a water and calcium oxide mix in the other. According to Gizmag.com, when the can is activated, the contents go from a tepid room temperature of 68 degrees to a steaming 158 degrees in about three minutes. With an outer polypropylene sheathing, the can stays warm for around 45 minutes while preventing the contents from burning your hands.

The self-heating can follows on the development of the self-chilling can launched earlier this year. Gizmag says the auto-cooling can has been in development for nearly two decades with both Pepsi and SABMiller having had plans to use the technology, though never following through (Pepsi abandoned the concept because the refrigerant used at the time supposedly contributed to greenhouse gases).

Both technologies certainly have their uses. Soda and beer drinkers would appreciate not having to chill their beverages before tailgating, while the self-warming containers would be an obvious evolution for individual coffee and soup servings. Indeed, Malaysia's Hot Can manufacturer already markets those exact products.

As for Coke's innovation, there's an argument to be made that combining ginger and spices makes a delicious hot tea, so its Canada Dry brand of hot ginger ale could be seen as an alternative to that drink, but I'm left wondering who's been clamoring for this substitute for the real thing.

Apparently quite a few people, as Japan's Kirin Beverage is planning to launch its own warm soda called "Kirin No Awa: Hot Hojun Apple & Hop." 

Which gives me the idea of offering up more advice, again free of charge, but this time to brewers. Boston Beer is home to the largest brand of hard ciders and tea. Its Angry Orchard brand recently surpassed C&C Group's Woodchuck Hard Cider as the biggest seller in the country, even though industry sales comprise about just 1% of the total beer sold annually. Regardless, a warm hard cider launched in tune with the new seasonal flavors brewers are coming out with seems like a big winner.

With Anheuser-Busch InBev introducing Stella Artois Cidre and Michelob Ultra Light Cider, Heineken distributing Strongbow, and Miller Coors, the joint venture of Miller and Molson Coors, acquiring the Crispin cider brand, there's a whole layer that can be added on top of a new market just being tapped. 

Hot soda, though, doesn't seem to be a particularly large market and has me believing this will be an experiment that fizzles out. 

Seasonals, ciders, and teas have bolstered the best beer brands these days, even if they've brought with them a bit of volatility. But don't let such swings scare you out of the market. The best investing approach is to choose great companies and stick with them for the long term. The Motley Fool's free report "3 Stocks That Will Help You Retire Rich" names stocks that could help you build long-term wealth and retire well, along with some winning wealth-building strategies that every investor should be aware of. Click here now to keep reading.

Editor's note: A previous version of this article incorrectly stated that Coca-Cola would be using the self-heating can for its hot ginger ale. The Fool regrets the error.


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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On September 13, 2013, at 3:56 AM, BenBouckley wrote:

    Sorry Rich but your article is wholly inaccurate. I researched and wrote on this for my own site BeverageDaily and the can itself does not contain a heating module - it is warmed up in store! You perpetuated the Gizmag error, I'm afraid!

  • Report this Comment On September 13, 2013, at 6:24 AM, TMFCop wrote:

    BenBouckley,

    Just found your article! Thanks for the info. Seems Gizmag duped a bunch of us.

    Certainly Coke's technology is different and cheaper, though I wonder if it's "better" since you need an external heat source. I think that eliminates a lot of the benefits of the self-heating can, even if it costs more.

    For anyone else interested in Ben's article, you can read it here:

    http://www.beveragedaily.com/Processing-Packaging/Coca-Cola-...

    Thanks again!

    Rich

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