Cocoa-free chocolate company raises $6M for expansion4 Nov 2021
Germany’s QOA, a startup striving to create chocolate without the cocoa, closed a $6 million funding round led by Cherry Ventures with participation from 50years, World Fund, Nucleus Capital, Trellis Road, Pioneer Fund, and Tet Ventures.
Funding will be allocated toward building out a pilot production facility in Munich, Germany to complement QOA’s manufacturing facilities in Switzerland, the company said. Additionally, the company will allocate a portion of its funds toward hiring.
Chocolate has long been a product around which there have been questions of sustainability. From child labor and deforestation to concerns about climate change and loss of the ecosystems, concerns about chocolate production have been mounting, pushing major chocolate manufacturers to pledge to source their raw materials more sustainably. However, these promises that have spanned over a decade have gone largely unfulfilled, according to the Cocoa Barometer 2020 report.
To combat these ongoing issues, QOA is looking to tackle sustainability from an alternative perspective. Instead of plants in nature, the company relies on fermentation that produces natural byproducts from other food-making processes for its base material. The startup then uses its proprietary mixture of microbacteria and flavor formation to craft a chocolate alternative that maintains the texture and flavor of chocolate. According to the company, its chocolate is vegan and without any artificial additives.
QOA is scaling at a pace that it expects will bring its first cocoa-free chocolate products to market by 2022. By 2035, the German startup said that it intends to have reached a scale that will make it possible to price its products at or below the cost of traditional chocolate.
As demand for chocolate grows, prices have also increased. Chocolate – particularly dark chocolate -- has been linked to health benefits, but it is also a traditionally indulgent food. Both these qualities have been in-demand over the course of the pandemic, causing chocolate sales to grow 4.2%, according to the National Confectioners Association’s 2021 State of Treating report.
Not only has the market for chocolate grown, but more people are consuming larger quantities of the treat. In Cargill’s most recent ChocoLogic study, the company found about one-third of people increased their intake of chocolate as a result of the pandemic. This is despite years of rising prices. In 2018, the average chocolate and confectionery import price rose 3.5% compared to a year prior, according to Index Box. Then, this year, prices jumped again and major manufacturers like Hershey Co. announced that these price hikes would be passed down to consumers.
In such an environment, it is no surprise that entrepreneurs are looking for an alternative solution to continue to provide chocolate. In addition to QOA, California Cultured and Voyager Foods are working on creating chocolate without cocoa. If they succeed in matching the flavor profile of the beloved treat, there is a good chance that these alternatives will find their way into shoppers' baskets.
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