Most of us treasure our morning cup of joe, but few understand the complex technology that goes into choosing the best beans. Demetria, a company headquartered in Israel and Colombia, which is building the world’s first coffee quality and traceability data cloud to drive efficiency and transparency across the entire coffee supply chain, announced Tuesday that it is emerging from stealth after closing a $3 million seed funding round for its AI-powered taste and quality intelligence SaaS startup.
The seed-funding round was led by Latin American-Israeli investor Celeritas and a group of private investors including Mercantil Colpatria, the investment branch of Grupo Colpatria, a leading player in the Colombian financial sector.
Until now, coffee-bean quality has been determined solely by cupping, a manual, expensive, time-consuming process carried out by the industry’s certified tasting experts, located in countries where coffee is exported to. Consequently, roasters and traders have had minimal information about the quality of beans they are purchasing until very late in the process.
Moreover, cupping is inaccessible to the vast majority of the 12.5 million smallholder farmers that produce 60 percent of the world’s coffee beans and cannot determine or manage the quality of their crop, with many unable to earn a reliable living. Global coffee production is affected by many factors that make crop quality volatile and its market unstable. Farmers’ inability to guarantee a consistent level of quality of bean means that a significant number of them receive just a base commodity price for their produce. Quality is determined only later in the process, when beans pass through an extensive and complex supply chain that incorporates traders, processors and exporters. Consequently, farmers receive on average just 2.5% ($0.07) from a cup of coffee retailing at $2.80.
Demetria has pioneered the digitization of coffee aroma and taste, the most important quality variables of the coffee bean. For the first time, quality and taste can now be assessed at any stage of the coffee production and distribution process, from farm to table.
Utilizing state-of-the-art, portable near infra-red (NIR) sensors to analyze and fingerprint green coffee beans for biochemical markers, Demetria has created an AI-based data intelligence platform - an “e-Palate” - that accurately matches each bean profile according to the industry standard coffee flavor wheel. The company is launching a suite of SaaS-based solutions to replace age-old, manual production processes used to ascertain bean quality.
“The ability to discover the quality of green coffee beans is a game changer for an entire industry that’s relied on a primitive supply chain and artisanal processes for 300 years. It’s hard to believe that the world’s biggest roasters have effectively been buying beans with very limited knowledge about their quality, and that the majority of coffee farmers, the most critical players in the supply chain, don’t understand the quality of their own crops and hence are paid unfairly, threatening the sustainability of this $450 billion industry,” said Demetria’s co-founder and CEO Felipe Ayerbe. “Our technology delivers vital intelligence to ensure crop consistency and quality control, resulting in readdressing the economics of the coffee value chain to benefit every key player.”
Demetria has successfully completed a pilot with Carcafe, the Colombian coffee division of one of the world’s oldest and largest agricultural commodity traders Volcafe/ED&F Man. Carcafe has identified a distinct high value “cupping” profile and Demetria has built a solution to determine which green beans will suit.
Demetria will use its seed funding to continue to develop technology to improve the quality of coffee beans across the supply chain.