Demetria, the first taste and quality intelligence SaaS (software as service) startup to utilize artificial intelligence (AI) for the coffee supply chain, has emerged from stealth after closing a $3 million seed funding round, the company announced Tuesday.
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The foodtech startup, co-founded by Israeli-Argentine serial entrepreneur Eduardo Shoval, has developed the world's first data cloud to identify and track coffee quality with full traceability.
Until now, coffee bean quality has been determined solely by cupping, a manual, expensive, and time-consuming process conducted by industry-certified tasting experts in countries that import coffee. This system allowed roasters and traders minimal data on the quality of beans being purchased until a late stage of the process. In addition, cupping is inaccessible to the vast majority of the 12.5 million small farmers who produce 60% of the world's coffee beans.
Global coffee production is beset by a host of 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, because quality is determined only after the beans have been sold. On average, the farmers who grow the beans average only $0.07 of a cup of coffee that retails for $2.80.
Using infra-red sensors to "fingerprint" green coffee beans, Demetria has digitized the most important quality variables of the coffee bean – aroma and taste, which can be graded using its AI-based "e-Palate" platform that matches bean profiles to the commonly-used coffee flavor wheel.
"The 'wine-ification' of coffee means that levels of discernment and premiums for the beverage have been increasing exponentially, yet the perception and treatment of coffee farmers differs vastly compared to that of vineyard owners," said Shoval. "Our vision is to provide an enhanced and sustainable quality coffee experience for all coffee drinkers globally, while revamping the industry's value chain for the 21st century."
"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 co-founder and CEO Felipe Ayerbe.
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"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," Ayerbe added.
Demetria has successfully completed a pilot with Carcafe, the Colombian coffee division agricultural commodity traders Volcafe/ED&F Man, and is also working with Federación Nacional de Cafeteros (FNC), the Colombian National Federation for Coffee Growers, to develop apps to help farmers and their transaction points in the supply chain control and track bean quality, and price it accordingly.
"It's extremely important that Colombia continues to strengthen its position in the specialty coffee market with more consistent and better quality. Technologies like Demetria empower the FNC to achieve its goals and play a key role in the sustainability of our industry," said FNC President Roberto Velez.
Ayerbe and Shoval founded Demetria along with Salomon Kassin, a commodity trading expert and pioneer of Colombia's specialty coffee industry and serial high tech entrepreneur Yori Nelken. Demetria is headquartered in Bogota with an R&D team in Tel Aviv. The company also has a lab in the heart of Colombia's coffee growing region and a commercial presence in Brazil and Switzerland.
