- Atomo Coffee, which makes what it calls a molecular version of the beverage without coffee beans, raised $9 million to bring its products to market. This latest round of funding brings the futuristic coffee startup's total funding to $11.6 million.
- Participants in the latest round of funding round include S2G Ventures, AgFunder, Bessemer Venture Partners and Horizon Ventures.
- Atomo Coffee will build a 12,000-square-foot production roastery in the industrial area of Seattle. It plans to have its coffees, starting in RTD cold-brew form, on the local market in 2021.
The startup's coffee is unlike that from any other producer: It doesn't come from beans. Atomo's founders, Andy Kleitsch and Jarret Stopforth, started the company last year to make a more sustainable and better tasting version of coffee. They figured out, from a chemical level, what makes coffee taste good. They also determined what can make coffee bitter and chose to leave those compounds out.
Atomo Coffee upcycles seeds, kernels, pits and leaves that contain the components that make coffee taste good from farmers in the U.S., a company fact sheet says. The company turns this into grounds, which then can be made into its coffee. Atomo Coffee has about the same amount of caffeine as conventional from-the-bean coffee, and the company said it is working on building a version of coffee that is caffeine free.
According to a company fact sheet, Atomo has 10 people on its science team — two thirds of its total staff of 15 people. Five of them — including Stopforth — have Ph.Ds. The company is concentrating on getting the science right and ensuring the plant-based items in Atomo's grounds can combine to produce something chemically identical to coffee.
The company's ramp-up is coming at the right time for a world thirsty for coffee. According to a study by Britain's Royal Botanical Gardens and published by Science Advances, 60% of the world’s coffee species are under threat of extinction due to climate change. Thirteen species — including Arabica, the world’s most common source of coffee — are considered critically endangered.
Coffee beans are already starting to run short. This year, coffee consumption is expected to overtake production by about 502,000 bags — or more than 66.4 million pounds — according to a report released by the International Coffee Organization. It's mostly due to a poor crop, though consumer hoarding during the pandemic has caused prices to spike even more.
Not only are the components that make up Atomo more plentiful than coffee beans, but their coffee hits a sweet spot among coffee drinkers. More than half — 53% — prefer to buy coffee that is good for the environment, farmers and communities, according to National Coffee Association statistics reported on by Daily Coffee News. Coffee is known to have a high carbon footprint, which comes from harvesting and roasting the beans to getting them from the tropical climates where they grow to consumers around the world.
Atomo's coffee is made from 95% upcycled materials by weight, the company says — components that would otherwise be thrown away. Upcycling is getting to be a huge market, worth $46.7 billion last year with an expected annual growth rate of 5%, according to Future Market Insights. Upcycling is becoming more cachet with consumers, with 74% of them thinking that food waste is a problem and 57% planning to buy more upcycled products next year, according to a study from Mattson.
While many coffee companies are working to add functional ingredients or different tastes to the staple beverage, Atomo is doing something unique. The origin of the beverage alone makes it stand out on the shelf. One thing, however, that may give consumers pause is wondering whether it's actually coffee. The company says though that a blind taste test done by CNBC found 70% of consumers preferred Atomo to conventional coffee.