Compound Foods has unveiled a fermentation-based “beanless” coffee and cocoa ingredient platform in response to the growing instability in the ingredients’ production due to supply shortages, climate pressures, and extreme price fluctuations.

The platform integrates into existing manufacturing pipelines, allowing food brands to incorporate the ingredients without costly reformulation, notes the food tech company.

It targets derisking global supply chains to provide manufacturers with functional substitutes to traditional coffee and cocoa at a time when cocoa’s 2023-2024 global cocoa market registered a deficit of 478kt, the largest in over 60 years, according to ING. This shortfall was driven by crop failures in West Africa, particularly Côte d’Ivoire and Ghana.

The San Francisco-based firm is mitigating these challenges by mapping the molecular compounds responsible for the taste, aroma, and performance of coffee and cocoa. It leverages underutilized ingredients, such as seeds, cereals, and fibers, to build a “whole-food base,” followed by fermentation and roasting to unlock the right flavor profiles. 

“We mapped over 800 compounds in coffee and built our formulation layer by layer,” says Swetha Mahadevan, head of product at Compound Foods. 

“Our approach combines upcycling, domestic sourcing, and microbial science to deliver a product that tastes great and performs well.”

The team claims that in blind taste tests conducted with Purdue University, 60% of tasters preferred Compound’s coffee over premium brands like Blue Bottle and Stumptown.

Creating a sustainable alternative

Compound Foods, which has raised over US$10 million in funding, focused initially on beanless coffee. It later fast-tracked the development of a cocoa-free alternative in response to the 2024 supply crisis. 

However, the company’s goal is not to replac the specialty coffee or craft cacao, says Maricel Saenz, Compound’s founder and CEO.

“It’s to offer a sustainable, cost-effective alternative to the part of the industry that’s most vulnerable, commodity crops grown at scale, traded anonymously, and increasingly exposed to environmental and economic risk.”

The company says its beanless solution uses less water and creates fewer carbon emissions than traditional coffee. Most ingredients are sourced and processed in the US, which reduces geopolitical and logistics risks that plague commodity markets.

Better times ahead?

While research indicates the cocoa costs will stay elevated in the medium term, cocoa futures prices declined from previous highs, averaging US$8,100 per metric ton in London and US$8,055 in New York, according to the International Cocoa Organization’s Cocoa Market Report for March 2025.

Additionally, even though concerns emerged over Côte d’Ivoire’s mid-crop due to insufficient rainfall, improved production forecasts in other major producing countries “could offset the project losses” from the region, notes the International Cocoa Organization.

ING says the global cocoa market is forecast to return to a surplus of 142kt in the 2024/25 season, but there is “uncertainty over this number as it is yet to be seen how the mid-crop develops.”

Meanwhile, food companies are developing novel ways to mitigate the current challenges in the cocoa industry. These include Cargill’s alt-cocoa collaboration with Voyage Foods, Bunge’s shea-based cocoa butter alternative, and Germany-based Planet A Foods’ cocoa-free chocolate using fermentation.