Wired magazine reports that the Heatswell is an endothermic (heat-activated) coating for a paper coffee-cup.
When that cup is filled with a tasty hot beverage, the band swells into a thick, insulating cloth-like material, offering both grip and heat-protection for your fingers. It’s thin, safe and cheaper than a cup and collar together.
Take a look at the video. The Heatswell does indeed swell impressively.
Not only is it cheaper, and made from an FDA-approved material, but it cuts out a step of the coffee-serving process and offers the opportunity for branding.