Prefer
Setting the Scene
Climate change threatens to erase 50% of coffee farmland by 2050.
To make matters worse, the current coffee industry is completely unsustainable:
Coffee has an extremely high carbon footprint, with 1kg of coffee producing 29kg of CO2.
Yet, demand for coffee is expected to triple in next 25 years.
This week’s company provides affordable and sustainable bean-free coffee.
In a Sentence
Prefer sells bean-free coffee grounds for a more sustainable and affordable future.
Bean-free: Prefer uses patented fermentation technology and ingredients like bread, soy, and barley to make coffee grounds.
Sustainable: Promotes a viable future for the coffee industry by using upcycled ingredients and ensuring forest conservation.
Affordable: Prefer matches the price point of the most affordable arabica coffee supplier, as traditional beans become increasingly expensive.
Bulleted Version:
- Similar to how Beyond Meat provides a vegan substitute to reduce environmental costs, Prefer has created a coffee-bean alternative that paves the way for a more sustainable planet. 🌎
The Basics
- Headquarters: Singapore
- Employee Count: 5
- Investors:
- Funding amount: $600k pre-seed in equity and grant financing
- Business model: Currently B2B by selling directly to coffee shops
- Early traction: In six cafes in Singapore with household name partnerships to be announced in H1 2024
Due Diligence
WHAT WE LIKE
🌎 Market opportunity: The global coffee market is expected to grow at 3.2% annually and estimated to reach $127B by 2028.
Prefer is well positioned in its market, as this growth is attributed to the increasing demand for coffee from emerging markets, such as China and India.
♻️ Environmental importance: Climate change is a major threat to coffee production threatening to erase 50% of coffee farmland by 2050 despite the rising consumer demand.
Plus, coffee production is one of the top emitters of greenhouse gases across the food and beverage supply chain.
📊 Differentiated: Prefer stands out from other companies with similar solutions by being the only one in Asia, focusing on producing coffee grounds instead of canned cold brew, and crafting all flavors in-house rather than depending on external flavor companies.
POTENTIAL RISKS
🌎 Taste: One study suggests that 70% of coffee drinkers consume the drink for its classic taste, a familiar flavor that any alternative may find difficult to replicate.
😳 Coffee benefits: Studies show that moderate coffee intake is linked to a lower likelihood of type 2 diabetes, heart disease, liver and endometrial cancers, Parkinson’s, and depression.
As a result, consumers who switch from traditional to alternative coffee forgo these benefits.
🔄 Penetrating the global market: Similar to how consumers may not readily accept meat alternatives, coffee customers may be hesitant to try an alternative to the status quo.
Founder Profile
Jake Berber, CEO: Previously at Good Seed Ventures.
Ding Jie Tan, CTO: Previously founded Starter Culture.
Comps
Atomo: Backed by Horizons Ventures, Bessemer, Ag Funder, RSE Ventures, and others.
Minus: Backed by Magma Partners, Maple VC, Cult Food Science, Amplifica Capital, and others.
Voyage Foods: Backed by Horizons Ventures, Level One Fund, Indie Bio, and others.
Northern Wonder: Backed by OostNL & Rabobank.
Why Prefer
By introducing a groundbreaking bean-free product to the SEA market, Prefer is set up to dominate the industry as the preferred coffee grounds of the future. ☕️