This presentation discusses Procurement advantages of Self Chilled Can innovation, technology acceptance across the globe, and the impact of this invention on the supply chain. It also gives a perspective on what metallic can manufacturers can look forward to in the immediate future.

1. Copyright © Beroe Inc., 2013. All Rights Reserved

2. November | 2012
Abstract:
Joseph Company, a privately owned beverage company in
the United States of America, invented a new Self Chilling
Can in February 2012. The new can cools the contents
without need for refrigeration and eliminates the use for
CFCs for cooling. This new system can be used with a
standard metal can, is environment friendly and does not
have a huge incremental switching cost. Also, the metal
can market is expected to lose 1% of its market share by
value to its substitute paperboard market globally in 2013,
mainly due to the increasing acceptance of these
paperboard substitutes and sustainability initiatives of the
consumer conglomerates. Consequently, the metallic can
manufacturers are looking for new innovations to revive
demand globally. Could this be that innovation?
This article throws light on the procurement advantages of
this new innovation, the acceptance of this technology
across the globe, and the impact of this invention on the
supply chain. The article also gives a perspective on what
metallic can manufacturers can look forward to in the
immediate future.
Self-Chilled Beverage Cans-
Future of the Beverage Market?
Copyright © Beroe Inc., 2013. All Rights Reserved
Author
Arjun Parasuram,
Senior Research Analyst,
Packaging Team

3. In the modern era, technological systems have evolved to such an extent that they have
succeeded in creating a need for instant gratification leading to a desperate craving for speed.
And if this speed comes with convenience, it can’t get any better. This is what the new
technological invention by Joseph Company is all about.
The recently launched self-chilled can, a first of its kind, eliminates the need for refrigeration,
and brings down the temperature of the beverage contained in the can by about 300
C (860
F),
within 3 minutes! What’s more, this happens at the push of a button! The new beverage can
employs the award winning (Stratosphere Ozone Protection Award) “Microcool” technology
that uses atmospheric carbon dioxide to provide this cooling effect , whilst at the same time not
adding to greenhouse gases in the atmosphere. West Coast Chill, the company that currently
plans to ‘mass market’ this invention has fixed the price at comparable levels to those of other
premium brands such as Redbull.
Breaking into The Market
The global alcoholic beverage market was valued at around USD 1 Trillion in 2012, while the
carbonated soft drinks segment accounted for USD 200 Billion in the same year. Metal can
packaging accounts for around 4% of these beverage markets by volume globally. The metallic
can market is estimated at around USD 60 Billion in 2012 and expected to grow 4% till 2014.
With the leading paperboard can companies registering a year on year revenue growth of over
35% in 2011, the metal can market is expected to lose 1% of its market share by value to its
substitute paperboard market globally in 2013. Although the beverage market is growing at
around 3% annually, demand volumes for metallic cans has steadily slowed down, especially
in the developed markets, and the rising metal prices have not helped either.

4. For Joseph Company’s new invention, the metal can cannot be substituted by paperboard
as heat conduction is the basis for the cooling functionality of the can. Also, the heat
exchange unit, an inherent part of the cooling system of the self-chilling can, can be
accommodated in standard can sizes. This has created a plethora of potential
opportunities now available to can manufacturers, not only in the beverage industry but
also in any consumable liquid products that require cooling. Also, with 60% of the 4 billion
units of metal cans produced globally per annum accounting for beverage packaging, this
new invention, by far, may turn out to be the solace that metallic can manufacturers have
been seeking to compete with the growing substitute paperboard market.
Considering the amount of energy and cost that is saved on electricity with this new
invention, it would be no surprise to see a number of countries, in their bid to embrace the
Kyoto Protocol*
clauses, acknowledge and promote this innovation to reduce their carbon
dioxide emissions. Since the technology is patented, the one aspect that manufacturers
across the globe will monitor would be the quantum of energy used in the environment
friendly vegetable extract in the heat exchange unit to bring about the cooling effect.
When Pepsi took a similar initiative back in 1998, it was forced to back out due to the
potential environmental threats that its invention would bring about then and consequently
incurred financial losses. If Pepsi takes an interest in adopting this technology, it would
possibly revolutionize the beverage industry. And if Pepsi does take this up, will its arch
rival Coke be too far behind? These beverage giants, accounting for over 70% global
market share by volume for carbonated soft drinks amongst themselves, have proven time
and again, the colossal impact they can have on the global beverage market.
* According to the United Nations Framework Convention on Climate Change, “The Kyoto Protocol is an
international agreement linked to the United Nations Framework Convention on Climate Change, which
commits its Parties by setting internationally binding emission reduction targets”.

5. The Question of Price
Arguably, challenges associated with retail penetration do exist in the form of high pricing and
non-reusability. A number of customers feel that the can is priced high, up to around three times
more than a standard product. “Roll-outs” of small volumes have created a global perception of
the self-chilled can as a premium product, used mainly in conditions that do not support cold
storage: such as trekking and hiking.
Nevertheless, the retail response over the last two months clearly indicates acceptance of the
self-chilled beverage cans. Manufacturers expect that in the near future, bulk volumes of the self-
chilling cans will result in subsidization of prices to sufficient levels so that global leaders such as
Pepsi and Coke will take interest in this invention. If this price reduction happens, manufacturers
will believe that, as Mr. Joseph (CEO, Joseph Company) said, “the self-chilling can is going to
take the beverage market by storm”. However, the future of the chilled can ultimately lies in the
answer to the million dollar question on subsidization –“By how much? And will it be enough to
titillate global beverage giants to sit up and take notice?”
Sources:
www.beveragedaily.com, www.chillcan.com, www.westcoastchill.com
About the author:
Arjun Parasuram is a Senior Research Analyst with the Asia Pacific team at Beroe. His area of
expertise is Packaging and with special interest in market entry strategies, productivity
benchmarking and procurement strategies for the packaging industry. He enables procurement
decision making that influences spends of over $ 15 M, at Fortune 500 companies, including 6 of
the top 10 in the FMCG and Pharmaceutical Industries.
This article originally appeared in the December Issue of 'Inside Packaging' magazine from Packaging
Gateway.