This startup makes ground coffee from bread – no beans involved

Prefer co-founders Jake Berber (left) and Tan Ding Jie / Photo credit: Prefer

The rise of coffee consumption comes as climate change becomes an increasingly urgent issue, with likely consequences toward its key ingredient: the coffee bean.

A 2022 report suggested that coffee beans are vulnerable to rising mean temperatures at top producers like Brazil, Indonesia, and Vietnam. By 2050, they will get drastically less suitable to farm.

That led foodtech investor Jake Berber and ASTAR scientist Tan Ding Jie to establish a coffee startup with an unconventional approach: creating ground coffee without using coffee beans.

Called Prefer, the Singapore-based startup uses fermentation methods to make “bean-free coffee.” This replicates coffee’s sensory experience, but with 10x less carbon dioxide when compared to the regular way of creating coffee.

The company has raised US$2 million in a seed round led by Forge Ventures, with participants like 500 Global, Seeds Capital, and Entrepreneur First. Another investor is the Philippine coffee chain Pickup Coffee, which will partner with Prefer to bring bean-free coffee to other parts of Southeast Asia.

Upcycling leftovers

To make bean-free coffee, Prefer ferments upcycled food – such as leftover bread, soy pulp, and spent grain like barley – to reverse-engineer coffee’s “key aroma molecules.” These are then roasted and ground before getting delivered to customers.

Of course, the base ingredients don’t naturally contain caffeine. Most of Prefer’s supply is decaffeinated – Berber said that Prefer is already the default decaf option for some of its cafe partners – but it also offers low-caffeine coffee and a caffeinated cold-brew product.

For the latter two, the company purchases caffeine powder and incorporates it into their formulation. It said that caffeine levels can be customized to a customer’s preference.

Prefer mainly supplies ground coffee that is compatible with existing espresso machines to B2B customers across 12 locations in Singapore. Its products are also available in a few outlets of the salad chain SaladStop.

While Prefer did not disclose its pricing, Berber said it looks to be a more affordable option than current arabica bean suppliers.

“Going forward, we are really excited to continue servicing B2B partners, such as hotels, food service operators, and other corporate pantries,” he added.

Looking beyond coffee – and Singapore

Prior to starting Prefer, Berber worked in the healthtech and real estate industries across the US and Israel. He then invested in foodtech startups as part of Good Seed Ventures, an Israeli VC firm. Meanwhile, Tan was a research officer for cultivated meat applications at ASTAR, the Singapore government agency for science and research, and is known to be a fermentation specialist.

While Prefer has been in the market for just three months, Berber said that the startup has logged 2x growth in sales month on month. The founders added that the company is close to breaking even and plans to remain profitable as it scales.