Oxford-based biotech company Fermtech has raised £2.5m in seed funding to help scale production of its cocoa alternative, Koji Cocoa.
Made from cocoa shells, Koji Cocoa delivers cost savings of between 25% and 33% in end products including chocolate and bakery items such as brownies and muffins compared to those made with standard cocoa, according to the firm. The ingredient also achieves up to 98% lower carbon emissions and doesn’t require additional farmland to produce, Fermtech added.
Koji Cocoa is described as a true-tasting, clean-label cocoa ingredient produced using solid-state fermentation of the side streams of the cocoa plant (such as the husks) that are normally discarded. This process preserves the natural flavours of cocoa while breaking down indigestible components into soft, nutritious ingredients. It is similar to the centuries-old production of koji in Japan, a filamentous fungus used to ferment grains such as rice, barley, and soybeans.
The company noted that the funding for Koji Cocoa, its first commercial product, comes a critical time for the global chocolate industry where climate change and crop disease have contributed to an estimated 30% decline in cocoa yields. Manufacturers are facing compressed margins, rising consumer prices. and increasing pressure to secure resilient supply chains, resulting in cocoa price volatility, added Fermtech.
Leading players in the global food and snacking industry are said to be already engaged with Koji Cocoa, which Fermtech claimed demonstrated the product’s versatility and indicated strong market potential.
“Innovation in food has to be about great tasting, nutritious products, produced affordably,” commented Fermtech CEO Andy Clayton. “Fermtech has been committed from the start to extending the value we get from our crops, using the power of biology to unlock flavour and nutrition. This investment allows us to scale our production and get delicious foods into consumers hands.”
The funding round was led by £2m from Elbow Beach, a London-based private investment company that specialises in backing decarbonisation, sustainable energy, and social impact businesses. The remaining £500k came from the likes of Carbon 13 and Empirical Ventures.
“Fermtech exemplifies the type of bold innovation we back – one that is commercially resilient and scalable while solving a real market problem,” said Elbow Beach CEO Jonathan Pollock. “By significantly reducing input costs and improving supply chain resilience, Koji Cocoa supports adoption at scale. Fermtech is creating sustainable, scalable ingredients that reduce environmental and social impact and pioneer a circular economy approach benefiting food producers, consumers, and the planet.”
Investors appear keen to help grow the chocolate alternative market in the UK, with foodtech firm Win-Win securing £3m as part of a Series A funding round last year. The company has since announced an exclusive partnership with ingredients supplier Keylink to distribute its cocoa-free chocolate products across the UK and unveiled a new bake-stable chocolate chip range designed specifically for bakery and foodservice sectors.
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