Entrepreneur to bring hot canned beverage to the US

By Hal Conick contact

- Last updated on GMT

Will Hotshot create a new category for hot canned beverages in the US?
Will Hotshot create a new category for hot canned beverages in the US?

Related tags: Coffee, Drink, Japan

After years of popularity in Japan, an entrepreneur is bringing hot canned coffee to the US.

Danny Grossfield believes hot canned drinks have huge potential in the States, as it is already a $15bn industry in Japan. He started Hotshot, which will be ready to launch its first flavors of hot coffee in January. It plans to expand the line to other beverages, such as tea and possibly dairy drinks, in the future.

“Most food and beverage companies fight to capture a niche within a category,”​ he told BeverageDaily. “I’m on another level. I’m an entirely new platform … Everything can fall under that hot platform. I started with coffee since it’s the second most consumed beverage in the world next to water.”

Big in Japan

Grossfeld started Hotshot after taking a trip to Japan, where he bought a coffee from a vending machine and was surprised to find that it was actually hot.

“Believe it or not, the biggest brand in Japan is called Georgia, owned by Coca-Cola,”​ he said. “They’re doing $3bn canned coffee sales in Japan, but why aren’t they doing it in the States? The big companies know the success of it [in Japan], they just aren’t sure it’s going to catch on in the US.”

For two-and-a-half years, Grossfield and his team worked on testing and developing the product. They took the temperature of the drink from 115 degrees in Japan to 140 degrees for the Hotshot drink, something that meant finding a can that could be held and still insulate heat. It also meant having to find a formula that could stay hot for days on end.

“I’ll never forget the day we nailed it,”​ Grossfield said. “We were all jumping and hugging each other.”

Then, the Hotshot team had to figure out how they would sell the product. In Japan, he said 80% of these drinks are sold via vending machines, a market that is vastly different in the US. So he created his own machine, called the Hot Box, which will have large versions in retail spaces and smaller home versions that can be purchased online.

Finding a market

After “Americanizing”​ the concept by adding size to the aluminum can and a hotter temperature to the drink, Grossfield said he has been across the country giving taste tests. He even landed on TV’s Shark Tank to try and get additional funding for the business, something that has instead garnered him 1,200 emails from businesses wanting to sell his drink.

Pricing and flavors

Hotshot will be available in January in Espresso, Caramel, Vanilla Frappe and Hot Chocolate. Its suggested retail price will be $2.69 per can. Pre-orders for starter kits, which includes a hot box and 12 8oz cans, are available for $69.99. Replacement 12-packs of cans will sell for $26.99.

Although he has received interest from retailers, movie theaters and even tattoo parlors, Grossfield said the initial focus of his drink will be on college campuses.

“I did some samplings and kids were literally trying to buy the Hot Boxes out of my hands,”​ Grossfield said. “That’s when I decided was going to really focus on college students. We tweaked and designed the hot box for dorm rooms.”

The sales potential is “endless,”​ Grossfield said, but that doesn’t mean the launch won’t come without challenges. While the launch is expected for January, he still wants to see cans come through production before signing on for any distribution. It also remains to be seen how the general public will take to this new beverage.

However, Grossfield is confident the success will come. He said he has invested $2m of his own money in this drink and plans to educate people on how to rotate the drink and have the correct stock in place. He also plans to have a large eCommerce presence and is sourcing ideas for the future from people online.

“I want my customers to create and to vote and to choose all the new flavors, new machine designs and more. That’s how I’m going engage my customers; I’m not going to try to sell them, I’m going to ask their opinion.”

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1 comment

It's a time will tell

Posted by David,

At least his product has several advantages over the previous models. He has the home heating box, insulation labels and the ability to heat to 140 degrees vs a much lower 110 degrees for the other competitors. His biggest challenges is educating the customer base, and getting this stuff market tested to have hotels, airlines, vending machines, convenience stores, movie theaters, events, etc. wth this product and public awareness. Of course that is a time/money issue, but I think his product design/concept has a lot of the bugs worked out that the others have.

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