Seoul-based Romi Haan is a triple whammy: an inventor in an economy known for second movers; a self-made entrepreneur in a market dominated by inherited players; and a successful businesswoman in one of the world’s most male-dominated societies.
Now she is mounting her biggest challenge yet to the established order: Changing the way Asia consumes its beverages.
Her Seoul-based company Haan Corp. (tagline: “Home Innovation. Life Inspiration”) boasts 200 staff, presences in Korea, China and the United States, and revenues of $120 million last year. It sells a range of innovative products - notably the patented steam cleaners that made Haan’s name, as well as more recent offerings such as rice-porridge making devices, halogen ovens and even oil-free fryers.
“We are a company that provides solutions for easier, more convenient, healthier lifestyles for homes and for women,” Haan, the firm’s president and CEO said. “To come up with a new technology for beverages, that provides a healthier more convenient solution, goes perfectly well with what I have been doing.”
This October, she will be rolling out potentially her biggest ever product: carbonated capsule drinks.
Investors have been sitting up and paying close attention to the nascent sector since Coca Cola invested $1.25 billion for a 10 percent slice of
But while Keurig is still developing its capsule drinks system, “Kuerig Cold,” Haan will be launching her product this Fall - giving her a leg up on the competition in a market that many soon expect to be fizzing.
However, unlike her earlier business lines, Haan did not invent this one herself.
In April, she was contacted by Serge Bueno, founder and chairman of France-based Sparkling Drinks System, or SDS. Bueno, who was seeking partners, had heard about Haan and contacted her via business acquaintances in the United States.
”We hit it off immediately,” she said. “We are both entrepreneurs and innovators.” Sensing commonalities, Bueno offered her a master licensing agreement.
Citing confidentiality, Haan declined to discuss the details of the partnership, but has secured the distribution of SDS products across a very broad geography - from the Middle East (ex-Israel), through Asia (ex-China) to Oceania.
In return, she has guaranteed SDS a minimum of royalties. And she expects to invest tens of millions of dollars: “The roll-out of a new technology and a new product is a huge financial investment,” she said.
The product that Haan is seeking to create a market for across this vast region is SDS’ “Viberation” system, a combination of water dispenser and capsule drinks. The technology does not, unlike Israel’s existing SodaStream, require carbon cylinders.
According to its website, “SDS has created a brand new proposition which merges the traditional soft drink category with the high-growth water enhancer and flavored & functional water segments, ultimately providing a healthier, customizable and portable solution for consumers.” The system allows consumers to filter, sparkle and flavor drinks to taste.
The company has developed various capsule flavors in various categories – ranging from sparkling soft drinks to energy drinks and even beers. Feedback from retailers at trade shows in the US has been “overwhelming” Haan said.
Haan’s job now is to secure partners - vendors, distributors, retailers – across Asia. At time of writing, a first deal is being signed with a partner in Australia.
Haan – as bubbly a personality as any can of soda - claims the system will be a “revolutionary product” that will “change people’s lives.”
At a time when the global soft-drinks market has lost its fizz in developed nations due to heath concerns, SDS claims it offers a healthier and tastier alternative to branded beverages.
“As a mother of two boys, I don’t buy carbonated drinks,” Haan said. “But if I had an alternative that is healthier, with fewer calories, I would buy it. I feel this is it, and it is going to be better than any existing soda.”
SDS' capsule soft drinks contain one third the calories of branded carbonated drinks Haan claimed, and SDS has secured endorsement from Dr Ian Smith, a U.S. media figure in the health sector and the author of bestseller “Shred: The Revolutionary Diet.”
Haan also opined that SDS’ freshly carbonated products taste better than anything on the market. SDS says it has carried out three multinational consumer surveys over a seven- year period, to the point where its soft drinks are “consistently rated higher than well-known brands in taste/sensory tests.”
And if SDS drinks are healthier and tastier than those of their competitors, packaging is another plus over traditional beverage containers: capsules are smaller and more environmentally friendly to manufacture.
Their small size and light weight also make them more convenient for the end user. “A lot of people buy cans and bottles and carry them home,” Haan said. “They won’t have to do that anymore: they can buy small, lightweight capsules with a two-year shelf life.”
While restaurants and shops will likely continue to use existing beverage dispensers, Haan expects SDS’ system – ie its water dispensing machine and the drinks capsules themselves – to flood into homes and offices across the region. “Ultimately, that is our goal,” she said.
The global soft drinks market is estimated at US$100 billion. Haan hopes for half a billion dollars in annual sales for SDS products in Asia within five years, an estimate she calls, “very conservative.”
So all looks promising. But there may be vulnerabilities.
SDS says on its website that it is in talks with “a range of beverage companies to license a portfolio of famous and well-loved brands whose drinks will be co-developed exclusively for Viberation,” but has so far secured only one branded partner – Hawaii’s Kona Red Corp, maker of a coffee, fruit wellness drink; the deal was signed in June. With such limited brand buy-in, marketing could be a struggle.
And the struggle will only get more challenging when the big boys wade into the market: The taps of Keurig Cold, backed by the branding, marketing and distribution muscle of mighty Coca Cola, are expected to start gushing in 2015. Kuerig’s imminent arrival in the space gives Haan and Bueno a limited time window to establish the superiority of their products - and a spur to move very, very fast.
It also suggests that over the near term, the biggest gluggers of SDS’ energy drinks may be Haan and Bueno themselves.
