By turning sunflower seeds into sustainable, cocoa-free chocolate, Munich-based B2B food technology startup Planet A Foods (formerly QOA) has raised $30 million in a Series B funding round. The Y Combinator graduate is now gearing up for industrialization, with funding to expand its production capacity by about 7.5 times. This round follows a $15.4 million Series A in February.
The startup currently produces 2,000 tonnes of ChoViva, a cocoa-free, low-carbon chocolate alternative, per year. The company plans to increase this amount to more than 15,000 tonnes as it adds production capacity and begins international expansion beyond its three initial European markets.
The company plans to open its first U.S.-based production facility. The company plans to expand into the UK in the first quarter of 2025, building on three local markets (Germany, Austria and Switzerland) where the company's chocolate substitutes are already being used in food products aimed at tempting sweet-toothed consumers. The company is also considering launching it in France. Companies that have acquired ChoViva so far include Lambertz, Lindt, Rewe Group, and even German train operator Deutsche Bahn, which no doubt puts tons of chocolate treats on customers' tea trays every day. Masu. day.
So far, the startup has about 20 customers for its ortho-chocolate ingredients, mostly large European food manufacturers, but also a few U.S. brands. As production capacity expands, the company also aims to add strategic partners.
Cocoa isn't that sweet
The problem Planet A Foods is addressing is to make a classic sweet treat (chocolate) less of a threat to the environment. Traditional cocoa-based chocolate production poses serious sustainability issues because the crop is grown in areas of rainforest that can be cleared to create cocoa bean plantations. Additionally, global demand is outstripping an increasingly fragile (and ethically questionable) supply, leading to rising costs and uncertain futures for cocoa beans in a rapidly warming world. Connected.
Planet A's mission is to provide the food industry with alternative chocolate-like ingredients that can be baked and folded into breakfast cereals, confectionery, cakes and other snack products just like the real thing. And that's not an easy goal. The startup believes that by switching the mass production of chocolate from cocoa beans to more sustainable methods that avoid deforestation and source raw materials locally, it could avoid around 500 million tonnes of CO2 damage each year. Masu.
The raw materials used in the production of ChoViva are partially selected from those that can be grown locally (oats are also one of the staples). Therefore, it claims to have up to 80% lower carbon emissions than conventional chocolate (note, however, that the upper limit is the upper limit for chocolate). A vegan version of ChoViva that, unlike other blends, does not contain dairy).
“We are not against chocolate,” emphasizes Dr. Maximilian Marquardt, co-founder and CEO of Planet A Foods. Our CTO, Dr. Sara Marquart, is a food scientist who developed the process for making cocoa-free chocolate. “That's very important. So we're not going to take you away. [premium] chocolate. We are a snacking application after all — [confectionary such as] M&Ms, Snickers, Mars, Bounty, things like that. ”
Premium chocolate is a small market compared to the bulk consumer confectionery business that Planet A Foods is targeting. And in a sector where environmental damage is occurring on such a scale, the quality of the chocolate used is generally low, as the actual cocoa content is often low. [Maximilian] Marquardt insists that there is no difference in the taste of ChoViva and what consumers buy at mass retailers on a daily basis. “I can't tell the difference,” he says.
“My sister Sarah…in fact, it turns out that 80% of the flavor in typical chocolate comes from the processing of the cocoa bean, not the cocoa bean itself…out of 10 different flavors… If the eight types actually come from fermentation and roasting, why do we need cocoa beans?”
Scaling for impact
Economics also make ChoViva an attractive option for the industrial food industry, the startup says, as ChoViva is not affected by price fluctuations that can affect cocoa beans, which are a limited resource. But for such a switch to happen, the startup will need to be able to produce the substitute in the quantities demanded by the food giants, so the team has a long road ahead to scale.
At present, ChoViva's production capacity represents an incredibly small portion of the world's cocoa bean harvest. [Maximilian] Marquardt banknotes are worth between 4 million and 5 million tons per year. So making the big positive change in sustainability that the Marquardts hope will require a major leap in production capacity.
“We have already obtained the machine [for this stage of industrialization]. So we're already scaling up, we already have some real industrial customers, so we're now trying to address European demand,” he says, adding: I did. We are improving our processes. We also test run new machines. In addition, we are currently planning another facility in the United States. ”
They are also exploring how their business can respond to demand from Asia ([Maximilian] Marcato happened to be on a business trip to Japan as we spoke). But he says they also recognize that as a startup they need to focus.
“We're a startup… we're not naive, so we can't conquer the world on our own,” he told TechCrunch. “I think the main markets we will expand to are the UK and the US. But there is a lot of demand in Asia, so we are currently looking at what we will do here, both independently and eventually working with partners. We are currently considering what we can do.”
Supply chain vigil
Working in the (pseudo-)chocolate industry may conjure up quaint images of hatted chocolatiers delicately whipping sweets in a charmingly rustic setting. But don't be fooled. ChoViva's manufacturing business is already a huge undertaking.
The founders had to stay up all night in the factory to accurately produce large quantities of cocoa-free chocolate and make sure everything was in place to ship exactly when customers needed it. and [Maximilian] Marquardt says a big focus in this series of expansions is automation, which can reduce the risk of human error that can cause supply chain headaches.
We slept under those machines. . . Our daily lives are hell when you think about the challenges we face in the supply chain. ”
When asked about the competitive environment for cocoa-free chocolate, he suggested, “I think we're now at a unique scale, an industrial scale.” Other startups he name-checks include Foreverland, Nukoko, WinWin and Voyage Foods. They use a variety of methods and base ingredients (cereals, fava beans, carob, grape seeds, etc.) to blend competing cocoa-free chocolate products. Therefore, various approaches are being taken.
In this context, and indeed for almost any type of startup, success requires more than just developing a product: in this case, you need lab materials. [Maximilian] Marquardt says this inventive element is only 5% of the challenge they set for themselves.
“The main challenges are in strengthening production, strengthening quality control and building a supply chain. Every day, two 40-ton trucks leave the factory loaded with our products. And it is difficult for someone else to understand It's a real challenge,” he emphasized, adding: “Sarah, my sister, and I slept under those machines. We really understood the supply chain. It's very tedious. Given the challenges we face in the supply chain, we 's life is hell.'
The startup's management team and its brother-sister co-founder duo are pictured in the center image credit: Planet A Foods
“Most of the other competitors have great products, but they need to make it real and actually be able to deliver it to their customers, and it's right in front of them. 40 tons. Getting chocolate to the customer in the right place, with the right recipe, at the right quality, and on time is extremely difficult.”
Planet A Foods' Series B was co-led by Burda Principal Investments and Zintinus, with participation from AgriFoodTech Venture Alliance, Bayern Kapital, Cherry Ventures, Omnes Capital, Tengelmann Ventures, and World Fund.
Research and development
Apart from scaling up, the funding will also go toward further research and development as the team works to develop alternatives to cocoa butter, another key ingredient in the food industry. One of our goals is to be able to offer alternatives to palm oil, which also poses major sustainability issues. The startup also believes its approach could serve as an alternative to other specialty fats used in food production, such as stearin, animal fat, and coconut oil. [Maximilian] Marcato.
“[Sara] “We have developed a kind of complete fermentation platform that allows us to produce bio-identical coco butter,” he said, adding that bio-identical in this context means “the right bite, the right snap, the right melting point.” , means appropriate characteristics.”
“Our fermentation technology allows us to provide fermented, bioidentical cocoa butter at a much lower price than traditional cocoa butter, which is truly a game changer for the future. ” he suggests. “I think we are the only company that can actually produce cocoa butter using fermentation at a lower cost than natural cocoa butter.”
However, there are additional challenges here. One version of cocoa butter is [Maximilian] Marquardt suggests using precision fermentation to produce the best characteristics. This is a biotechnology technique that uses genetically modified microorganisms. This version of the product must be approved as a novel food before it can be sold. And because European regulations are more stringent, he suggested it could be brought to the U.S. market first.