Where is the interest in beanless coffee coming from?

  • Beverage conglomerate Suntory Holdings has invested millions in beanless coffee company Atomo Coffee
  • Beanless coffee is often positioned as a sustainable solution to the industry’s farm level environmental issues
  • If developed at scale, it could bring genuine solutions to the coffee industry – but it also removes farmers from the equation

Beanless coffee company Atomo Coffee has just received a multimillion-dollar investment from Suntory Holdings – a Japanese beverage company which manages a diverse portfolio of soft drink, ready-to-drink (RTD) coffee, tea, energy drink and alcohol brands.

The Suntory investment follows three funding rounds that finished earlier this year where Atomo raised over $50 million – which included some of the backers behind Beyond Meat.

Beanless coffee is typically created by synthesising or extracting compounds from other plant-based sources that mimic the flavour and aroma of traditional coffee. Ingredients used are often from natural, upcycled sources; with the goal of replicating the molecular structure of coffee made with beans.

Atomo isn’t the only beanless coffee brand out there. Californian food tech startup Voyage Foods develops a range of “kitchen essentials”, including a beanless coffee product. Last year, the company secured $36 million, which brought its total funding to almost $42 million.

There’s also Minus Coffee – which produces “beanless cold brew” using upcycled, roots, seeds, and legumes, which are roasted, ground, fermented, and brewed. They raised $4.5 million in seed funding in 2021 and secured additional, undisclosed funds in July this year.

These are just two examples of brands developing beanless coffee alternatives, and a departure from the traditional supply chain model isn’t the only thing tying these companies together.

Could beanless coffee be the future?

Sustainability will shape future investments

Beanless coffee brands largely position their products as a sustainable alternative to the industry’s supply chain, with a focus on environmental issues in particular.

“The dark side of the coffee industry is its significant environmental pressures, including deforestation, high water consumption, pesticide use, waste generation, and GHG emissions,” says food tech expert Andrea Pillai. “Considering a single cup of coffee requires 39 gallons of water and roughly one square inch of rainforest, I’d say the impact of this product is massive.”

Avoiding coffee farming will certainly reduce the industry’s impact on the environment. But given this is such a significant departure from conventional coffee, who is this product targeting?

“Atomo is designed for specialty coffee shops and their customers,” says Andy Kleitsch, CEO of Atomo Coffee. “Atomo is partnering exclusively with coffee shops, creating yet another reason for customers to visit a coffee shop and enjoy a drink they cannot make at home or work.”

Ultimately, this level of investment in beanless coffee shows that brands recognise sustainability as a major driver of purchasing behaviour. It also underscores a continued willingness to invest in innovation.

Part of the solution

There’s no denying that beanless coffee represents high-level innovation in food engineering. And like any new product development, at scale it could have implications for the rest of the industry. 

One common claim among beanless coffee products is that they can help to bridge a growing gap between supply and demand. Some cite research showing that the amount of land suitable for coffee production could shrink by as much as 50% by 2050.

“Coffee production must triple over the next 30 years and many of the world’s leading coffee companies are concerned about the quantity and quality of coffee by 2050,” says Andy.

But there is already a significant push for more sustainable coffee production, with many farmers adopting regenerative agricultural practices aimed at improving soil health instead of resorting to deforestation in pursuit of fertile land. Indeed, it’s now possible to buy verified carbon-neutral coffee.

And given specialty coffee’s commitment to growing sustainable coffee, and the sector’s deep-rooted dedication to the coffee bean – taking exceptional care over how it’s farmed, processed, roasted, and brewed – surely it would make sense to target other segments of the market.

Nevertheless, the market size for beanless coffee is minimal at present, and many of these brands are just getting started. But it does pose an interesting question: if beanless coffee or another alternative to the traditional supply chain model were to continue to grow, what are the implications for farmers?

Atomo claims its goal is not to replace traditional coffee farmers but to address declining coffee supply and “offset” climate change-driven challenges, such as the unsustainable expansion of farming areas.

Ultimately, at this point, beanless coffee and other similar products have a long way to go before they upset the status quo – which means that this question is far from pressing. 

Altogether, a more optimistic viewpoint might be to see this as evidence of continued investment into sustainable alternatives for the coffee industry. These innovations might not be answers to climate change, but they’re a step in the right direction. Irrespective of the motivation, it’s a sign that some areas of the coffee industry are still prepared to invest in sustainability – and that they recognise how important it is for consumers. 

Coffee Intelligence

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