See original story on Geekwire.
Independent coffee shops have always sought to carve out their spot in Seattle and elsewhere against Starbucks’ shop-on-every-corner mentality, whether it was with the flavor of their product or the indie spirit of the business. Today, young companies based in the city are turning to tech to try to match or eclipse what the coffee giant might be up to next.
Whether the technology helps connect more people to craft roasters, order and pay via mobile apps, or do away with the coffee bean altogether, “the little guy” is still brewing up ideas around coffee, tweaking many aspects of how people enjoy Seattle’s most cliché of beverages nearly 50 years after Starbucks began to take the culture to the masses.
There’s clearly demand. According to 2018 research from CB Insights, Americans are spending more on coffee than ever and investors are pouring big money into startups. CB Insights attributes the growth in coffee funding to such things as the fragmented Asian market, current dietary trends, new sales channels, and new blends gaining traction.
Starbucks is certainly not resting on its outsized accomplishments. In its headquarters building south of downtown Seattle, the company has created an innovation lab that it calls the Tryer Center, where it tests everything from product to process.
In its own company news story, Starbucks points out that it can be tough to play the part of nimble startup when you have 30,000 stores worldwide and 330,000 partners serving 100 million customers a week.
But much of what’s been written about the company of late revolves around technology meant to make it easier to order, pay for and pick up coffee — or be rewarded for doing those things. Starbucks recently partnered with a restaurant tech company and announced a $100 million investment in a private equity fund that backs food-related startups.
The recent activity is surely driven in large part by other giant competitors in the food and beverage industry, but it’s tough to ignore upstarts in Starbucks’ own backyard that are also aiming to pave the way for the future of coffee.
Here are just some of those startups that have caught GeekWire’s attention.
Builders of a mobile order and rewards app for local and independent coffee retailers, the startup launched in 2015 and has raised $1.7 million to date. Co-founder Nick Martin said his 15-person company adds value by catching the indie coffee space up with the tech that Starbucks already provides.
“We’ve focused on putting the infrastructure in place to ensure customers get a consistent and trustworthy experience wherever they go in the network, now we’re setting our sights on using the data to get even better experiences for coffee lovers,” Martin said.
In Martin’s view, Starbucks created new opportunities for thousands of businesses when they brought the second wave of coffee to the mainstream and from there the craft coffee segment ushered in the third wave and took the experience to the next level.
“We anticipate a parallel path on the technology front,” Martin said. “Starbucks has demonstrated the growing demand for mobile ordering specific to the coffee category — now there is a new opportunity to leverage the diversity of experiences in the indie coffee segment to create new value for consumers and business owners alike.”
Speaking of coffee’s “third wave,” Bean Box’s primary innovation is to take that highly fragmented, highly local supply chain of coffee roasters and make their product accessible to consumers at home, as fresh as possible. Founded in 2014, the startup has raised $2.5 million to date and employs 10 people.
CEO Matthew Berk said that Amazon continues to raise the bar when it comes to the demand for convenient delivery, and he points to his own company’s core principles supported at increasing scale via apps and a fulfillment platform: convenience/access, freshness, curation.
When it comes to curation, Bean Box relies on human and algorithmic selection of coffees, customized to customers’ tastes. Berk uses his personal background in data mining and search technology to build systems that help subscribers discover coffees that are ever more specific to their palates.
“We’re especially lucky to be based in the Pacific Northwest,” Berk said. “Not simply because of the legacy of companies like Starbucks and the vibrant coffee-loving culture they helped create in the U.S., but also because it gives us a geographical edge: access to dozens of talented roasters, and the ability to access their work within hours of roasting.”
“But when you lens those innovations through the absolute scale of the coffee economy and its opportunity, there’s really a new class of last-mile problem that cafe culture can’t address at scale,” Berk said. “And that problem is all about consumers upping their coffee game, in their own homes, and having access to ever higher quality coffee experiences.”
Self-taught developer/technologist Michael Mayer and his wife Liana Herrera got into the business three years ago, to ensure that the coffee we grind and pour over every morning is as fresh as can be. Fresh beans show up thanks to a combination of original hardware in the form of a scale, coupled with machine learning and an online marketplace. The startup raised $1.9 million in April.
“We tried doing subscriptions from roasters and it didn’t really work — the timing never seemed right,” Mayer said. “We just wanted to build a solution to have super fresh coffee on hand at all times.”
GeekWire went hands on with the Bottomless tech last year, to see if the internet could keep refilling one caffeine addict’s endless cup.
Getting beans to coffee lovers is one thing, but what if the coffee had been re-engineered to remove beans from the equation?
Atomo is the brainchild of Andy Kleitsch, a tech veteran, and Jarret Stopforth, a food scientist. The two set out to create beanless coffee for drinkers who are tired of masking the bitter taste by adding cream and sugar. Atomo’s hacked coffee is reconstructed to the full flavor profile of a slowly ripened bean, eliminating bitterness and harsh acids, the company contends.
On top of that, the startup saw a real need to address the sustainability issues around coffee farming and climate change.
Atomo, which employs 10, just raised a $2.6 million seed round. Horizon Ventures, an early backer of food innovators Impossible Foods and Perfect Day, led the round. The funding followed a $25,000 Kickstarter campaign.
Kleitsch said several trends merged in 2019 to create the perfect moment for Atomo, including the general public’s embrace of alternative meat and dairy products, financial markets rewarding early mover Beyond Meat, and alarming studies detailing the impact of climate change on the coffee industry over the next 30 years.
“The combination of these three trends created the perfect moment to reinvent coffee — to create a better tasting cup, which is better for the environment,” Kleitsch said. “Seattle has an amazing entrepreneurial landscape both in tech and coffee, it feels like the right place and the right time to bridge those two worlds and begin innovating for the future of coffee.
Using blockchain technology and virtual reality, this Seattle startup is creating transparency for customers, who can see exactly where their coffee comes from, and for growers to get maximum revenue out of every bean they produce.
“We can revenue share back to those growers and reward them a second time for the environmental or social good they’re bringing to the world,” Onda co-founder and president Paul Tupper previously told GeekWire. “Consumers are driven by that, and we can make a system that reflects the values people think they’re buying into. A backbone of experiential marketing makes it feel true and traceability proves that it is true.”
Onda says on its website that there is a lot of talk about ethical sourcing and sustainability in the coffee business, but solutions weren’t meeting the weight of the problem.
While shopping for home-delivered coffee on the Onda marketplace, you can check out a link to the world’s first blockchain-traced coffee and learn about other growers. Starbucks is also working on blockchain-related technology.