The latest cash injection comes from S2G Ventures, AgFunder, Bessemer Venture Partners and Horizons Ventures.
To those wondering if Atomo is a solution in search of a problem (regular coffee's pretty popular after all...), Atomo says there are environmental reasons for looking again at coffee production, which utilizes pesticides, and can contribute to deforestation, while roasting coffee also creates acrylamide.
But the primary reason is that while many people love the smell of coffee, they are less keen on the taste, with large numbers adding cream and sugar to offset the bitterness and make it taste as great as it smells, claims Atomo co-founder and CEO Andy Kleitsch.
"We think 68% of coffee drinkers are not satisfied with the taste of coffee, adding cream and sugar to mask the taste," he told FoodNavigator-USA.
"It’s shocking to think that the vast majority of coffee drinkers don’t actually like the taste of coffee."
Upcycled plant materials
Co-founder Jarret Stopforth – a microbiologist who has worked for companies from Campbell Soup and Chobani to Corbion, Soylent and Kettle & Fire - embarked on a mission to replicate the taste, aroma, and mouthfeel of coffee without the bitterness, using only naturally-derived ingredients, and found he was able to get tantalizingly close by studying the 1,000+ compounds in roasted coffee and identifying the ones that are essential for aroma and flavor.
"Our flagship grounds formula is made of upcycled plant materials such as pits, seeds, and stems from locally grown agriculture, mirroring the process of traditional coffee beans," said Stopforth. "Atomo's magic comes from our proprietary bioreactive and thermal processes."
'Ultimately, we plan to replicate all compounds in coffee'
Kleitsch added: "We’re not ready to disclose our ingredient list. The upcycled materials provide the matrix for the grounds and they contribute essential flavor and aroma compounds for our coffee. Our IP involves how we react the upcycled ingredients to boost, and match, compounds found in coffee.
"Ultimately, we plan to replicate all compounds in coffee, but in our initial consumer tests, users have been especially receptive to our no-bitter formula."
Atomo's new production ‘roastery’ in SoDo, Seattle, will "create grounds, and [then we'll] extract the grounds to create our first product, a ready to drink cold brew concentrate, which we’ll send to co-manufacturers for canning," Kleitsch explained. "Once we have ready-to-drink products perfected we will release a commercial version of our grounds.
"We plan to create enough product at our pilot roastery to support several speciality retailers and our own direct to consumer efforts."
So what kind of testing has Atomo conducted with consumers?
In a blind coffee challenge conducted at the University of Washington in early 2019, students sampled Starbucks Pike Blend and Atomo’s prototype formula and were asked to choose which they preferred, with 70% preferring Atomo.
More recently, "CNBC took Atomo Coffee and Starbucks Pike Roast to the Seattle waterfront and conducted their own taste test and 70% of participants preferred Atomo," said Kleitsch.
'It's too early to say if this is the Impossible [Burger] of brewed coffee'
Dr James Richardson, a consultant who has worked with many emerging brands, and the author of Ramping Your Brand, said he was intrigued by the concept, but added: "It's too early to say if this is the Impossible [Burger] of brewed coffee but that is certainly the R&D analogue.
"We don't know if the claims on sensory experience are even valid outside of a lab...in a real world competitive set of home brewed black coffees and RTD cold brew products. More importantly for the founding team, we don't know what percentage of the 68% who they claim are unhappy with the taste of black coffee are unhappy with their creamer +coffee solution. This de facto pairing is actually very satisfying to tens of millions of consumers.
"If I were the founder, I would go a lot more slowly to market and spend time understanding the early consumer base first. What is the real foil for this innovation to play off? It's rarely what the founder thinks."
'Consumers add as much cream and sugar as it takes to block the bitter flavor of coffee'
Asked to respond, Kleitsch agreed that Atomo was at the beginning of a journey, adding: "We’re at the very beginning of truly understanding the Atomo customer... much more research will be necessary to guide our product strategy."
As for the point about sugars and creamers, he said, many consumers add these to make coffee palatable, but are not necessarily happy about the extra calories they contribute: "We find that consumers typically 'add as much cream and sugar as it takes’ to sufficiently block the bitter flavor of coffee. And yes, it’s no surprise that consumers like sweet and creamy products which are not necessarily healthy for them."
While there have been attempts to make regular coffee less bitter through plant breeding, different processing techniques, or adding bitter blockers, no one has quite cracked the code yet, claims Atomo, which has filed a patent on "how we generate coffee aroma and flavors from upcycled ingredients."
The plan is to “reinvent every category of coffee,” making ready to drink beverages, cold brew on draft, ground coffee, and coffee pods.
Each cup of regular Atomo Coffee will have 100mg of caffeine (the company has not disclosed the caffeine source), although non-caf versions will also be available.
The company says that 95% of its ingredients by weight are from "upcycled sustainable plants" such as watermelon seeds and sunflower seed husks, although it has not disclosed its recipe.
What’s in a name?
Is Atomo technically ‘coffee’ if it’s not from the bean? There’s no standard of identity for coffee, notes Atomo, so if it walks and talks like coffee, that’s what consumers will understand it to be.