February 7, 2024

By Lynda Kiernan-Stone, Global AgInvesting Media

Chocolate is almost universally loved. But the cocoa industry has been long-beset with challenging issues – economic, environmental, and social – including climate change, deforestation, child labor issues, and smallholder producers earning barely the price of a candy bar per day.

In 2022, consumers spent EUR$180 billion (US$190.5 billion) on chocolate, and the market is estimated to be worth EUR290 billion (US$307 billion) by 2030.

But there’s a rub, because it relies on cocoa farmers who are predominantly smallholders in developing countries to continue to produce at a rapid pace. As mentioned above, these farmers largely live below poverty levels, leading them to turn to children who labor for little or no compensation.

Furthermore, Theobroma cacao can only thrive in very specific conditions found within a 20-degree band on either side of the equator, and grown under monoculture conditions, leading to clear-cutting and complete deforestation for cocoa farms in very ecologically sensitive regions.

This confluence of factors have driven chocolate prices to a 45-year high, with U.S. cocoa futures appreciating more than 40 percent year-on-year, according to Planet A Foods, while the global chocolate confectionery industry, which is currently valued at $254 million, is expected to grow at a CAGR of 5.6 percent between 2024 – 2028. 

But as advances in technology increasingly intersect with food production, there are new pathways being forged.

Munich-based B2B food tech startup Planet A Foods announced it has closed on $15.4 million in Series A funding led by European climate venture fund World Fund to fuel the international expansion of its cocoa-free chocolate ChoViva. Joining World Fund in this round were Omnes Capital, Cherry Ventures, Mudcake, Nucleus Capital, Feast Ventures, and Triple Point Capital.

“The craving for chocolate is soaring all around the world, but growing conventional production comes at a high cost and is increasingly challenging,” stated Planet A Foods. “Climate change – and the broader biodiversity crisis – is threatening the viability of producing the cocoa needed to meet demand. Crop yields in West Africa are being decimated by adverse weather conditions and crop diseases, and harvestable ground is becoming increasingly scarce.”

Founded by twins Drs. Max and Sara Marquart in 2021 and backed by Y Combinator, Planet A Foods uses a fermentation process and proprietary technologies to turn natural, locally sourced ingredients, including oats and sunflower seeds, into ChoViva – a cocoa mass and cocoa butter with full-bodied chocolate flavor and texture.

Driven to act after reading the book “Never Out of Season” by Robert Dunn, Max Marquart, a material scientist and two-time startup founder teamed up with his sister Sara, a food chemist and expert in biotechnology with a speciality in flavor formation, and who was previously Head of Flavor at the Zurich University of Applied Sciences, to launch the company. 

The resulting ChoViva product is affordable, has a very low CO2 footprint due to localized ingredients and short supply chains, contains up to 30 percent less sugar than conventional chocolate, and can be used either with conventional chocolate or as a full replacement.

“After hundreds of experiments we came up with our first edible prototype, and then saw everything turbocharged when we were accepted by Y Combinator,” said Sara. “After Y Combinator, we came to be known as the ‘chocolate siblings’, and our products have now been tasted all over the world, from Mexico to Japan.”

The company’s product is already available through German retailers REWE, with additional launches planned for this year. The funds gained through this round will be used to expand into the UK market this year, and to further optimize their production systems. The founders are also kickstarting their global expansion plans with negotiations beginning with strategic distribution partners in other European markets, Asia, and the U.S. 

“Fueled by the funding, we not only broadened our product portfolio but also enhanced taste and texture, solidifying our position as the leading force in the alternative cocoa and chocolate sector,” said Sara. “The Series A additionally expedited the advancement of our technology platform, allowing us to hire top-tier experts in the realms of lipids, chocolate, and synbio. We have now scaled up the production of our cocoa butter and palm oil alternatives to an industrial level, and are positioned for exciting new product launches.”

“Sara, Max, and the team have created the right product to tackle cocoa’s expansive climate impact, at the right time – as chocolate prices jump to record highs,” added Daria Saharova, partner, World Fund. “Since we invested in the company in 2021, we’ve been proud of their fantastic development. Within three years they have turned a proof-of-concept into an industry-ready product on shelves, and established partnerships with global giants.”

“The fact that this Series A funding round was oversubscribed despite a wider downturn in food tech investment is testament to their success. We are thrilled to have led this round for Planet A Foods, and can’t wait to help the team deliver on their ambitious global expansion plans in 2024 and beyond.”

~ Lynda Kiernan-Stone is editor in chief with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, as well as HighQuest Group’s Unconventional Ag. She can be reached at lkiernan-stone@globalaginvesting.com.

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