Atomo Coffee plots sustainable success with beanless brew

Seattle-based Atomo Coffee is angling to make coffee sustainable and to thwart the “2050 problem” of the global coffee supplies deteriorating with its “beanless coffee.”

The brand’s coffee is produced through “reverse engineering” using upcycled ingredients which contain “the same molecular structure” of coffee to craft a coffee-like beverage. Its newly launched beanless espresso consists of date seed, ramon seeds, sunflower seed extract, pea protein, guava, baking soda and leftover caffeine from decaffeinated green tea, among other ingredients. Atomo touts its low carbon footprint as a key selling point: it claims its product causes 93% less emissions and uses 94% less water than traditional coffee.

Japanese beverage giant Suntory Holdings —which produces Jim Beam bourbon and Maker’s Mark whiskey — announced this month it invested in Atomo for an undisclosed amount. In a statement, Suntory said the brand is providing a more sustainable alternative to coffee as consumers demand more ethical products. It follows a $40 million Series A investment round for the Seattle-based company in 2022.

Ed Hoehn, Atomo’s chief operating officer, said in an interview the Suntory investment will fuel new product innovation for the company. The deal followed conversations over the past year with coffee companies seeking to invest in solutions to sustainability issues that are poised to devastate the world’s coffee supply in the coming decades.

“Some of these larger coffee companies call it their 2050 problem, when there will be somewhere between 50% to 80% reduction in Arabica bean supply, which will have a major impact on taste profiles, cost and availability to consumers,” Hoehn said.

The espresso is sold at Gumption Coffee in New York City in 450 gram pouches, and is available for pre-order on the brand’s website. It is focusing on selling its products in coffee shops before retail stores. Atomo will debut its product in at least 100 coffee shops across five or six U.S. cities by April 2024, and aims to be in up to 500 by the end of next year, Hoehn said.

Atomo previously sold ready-to-drink cold brew beverages which it has since discontinued. It decided it wanted to focus on hot coffee after it had breakthroughs with the technology.

“Since hot coffee still makes up about 80% of the market, that’s simpatico with what we need to accomplish to continue to grow as a company,” Hoehn said.

The company aims to develop a suite of coffee products including Keurig pods, ready-to-drink products and the first beanless coffee that can be ground at home, according to Hoehn.

The “most sustainable coffee on the planet”?

Research indicates trouble for the coffee sector as climate change ravages growing regions. Rising heat in South America, Africa and Asia could halve the amount of land suitable for coffee growth by 2050. A 2021 Tufts University study found the taste of coffee is impacted by increased temperatures and higher amounts of carbon dioxide in the atmosphere.

According to Hoehn, Atomo believes that while consumers are not widely familiar with the shortages that coffee is poised to face in the coming years, they may be more aware of supply issues as inflation remains high.

“We don’t really see ourselves replacing coffee, but more helping to live in the gap between supply diminishing and demand growing,” Hoehn said. “We’re not the enemy of coffee, we think that we can coexist.”

Still, the brand has positioned itself as a more sustainable alternative to the $200 billion coffee industry.

Suntory cited sustainability as chief among its reasons for investing in the brand, as it “sympathizes with the company’s ethical and advanced initiatives in the field of beverages.”

While venture capital interest in Atomo has primarily focused on its potential as a more sustainable coffee alternative, Hoehn said the company is most interested in crafting a product with a premium taste profile. He cited data that indicated when consumers adopt alternative food products, the environment is not always top of mind.

“Being sustainably focused in your message as your core differentiator maybe gets a few more dollars out of the wallet at the point of sale, but it doesn’t get the wallet out of the purse,” Hoehn said.

According to Hoehn, Atomo is not interested in drawing a direct distinction between itself and coffee giants like Starbucks, the way plant-based meat companies like Beyond Meat and Impossible have with beef producers. The future of Atomo’s coffee could include being part of a blend with Arabica coffee, he said.

“At a molecular level, we’re identical, and we’re also still from natural resources that are coming from farms,” Hoehn said. “We see an opportunity to coexist versus having this stark contrast.”