Demetria, a Bogota-based, AI-powered taste and quality intelligence SaaS startup for the coffee supply chain, has emerged from stealth after closing a US$3 million seed funding round led by LatAm-Israeli investor Celeritas and a group of private investors, including Mercantil Colpatria, the investment branch of Grupo Colpatria, a leading player in the Colombian financial sector.
The company has pioneered the digitisation of coffee aroma and taste, the most important quality variables of the coffee bean. For the first time, quality and taste can now be assessed at any stage of the coffee production and distribution process, from farm to table.
With the world’s first data cloud to identify and track coffee quality with full traceability, Demetria aims to drive efficiency, transparency and sustainability throughout the commodity’s value chain, empowering producers and roasters with first-of-its-kind insights that positively impact the livelihoods of coffee farmers.
Coffee bean supply chain challenges
Until now, coffee bean quality has been determined solely by ‘cupping’ – a manual, expensive, time-consuming process carried out by the industry’s certified tasting experts, located in countries where coffee is exported to. Consequently, roasters and traders have had minimal visibility into the quality of beans they are purchasing until very late in the process.
Moreover, cupping is inaccessible to the vast majority of the 12.5 million smallholder farmers who produce 60% of the world’s coffee beans (according to CARTO) and cannot determine or manage the quality of their crop, with many unable to earn a reliable living.
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. Only later in the process, when beans pass through an extensive and complex supply chain that incorporates traders, processors and exporters, is quality determined. Consequently, farmers receive on average just 2.5% ($0.07) from a cup of coffee retailing at $2.80.
Portable near infra-red technology
Utilising state-of-the-art, portable near infra-red (NIR) sensors to analyse and fingerprint green coffee beans for biochemical markers, Demetria has created an AI-based data intelligence platform – an ‘e-Palate’ – that accurately matches each bean profile according to the industry standard coffee flavor wheel. The company is launching a suite of SaaS-based solutions to replace age-old, manual production processes used to ascertain bean quality alongside cupping, delivering taste assessment and profiling as well as swift, accurate quality measurement and traceability throughout the supply chain.
“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’s co-founder and CEO, Felipe Ayerbe. “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.”
Carcafe pilot project
Demetria has successfully completed a pilot with Carcafe, the Colombian coffee division of one of the world’s oldest and largest agricultural commodity traders Volcafe/ED&F Man. Carcafe has identified a distinct high value ‘cupping’ profile and Demetria has built a matchmaking solution to determine which green beans will suit.
“Carcafe worked with Demetria to develop a pilot application that allows anyone, anywhere, with a portable sensor, to detect a specific and high value sensory (“taste”) profile of green coffee,” explained Sebastian Pinzón, general manager at Carcafe. “We are in the process of adopting and rolling out this groundbreaking technology to greatly increase the efficiency and effectiveness of our prospecting process at our purchase points and in the field. Demetria replaces many manual processes to determine vital data that’s previously been unavailable in the industry and is proving invaluable in making better decisions.”
The company is also working with Federación Nacional de Cafeteros (FNC), the Colombian National Federation for Coffee Growers, to develop a series of apps that help farmers and their transaction points in the supply chain to 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 in order to meet increasing demands for unique and differentiated profiles from the global market,” said Roberto Velez, president of the FNC. “Through the use and affordable democratization of sensors, cloud computing and other technologies, coffee growers will be able to manage each stage of the production process in a simple, timely and accurate manner, and more importantly, evaluate the quality of their own crop and gain a price that reflects this. Technologies like Demetria empower the FNC to achieve its goals and play a key role in the sustainability of our industry.”
Former investment banker and consultant, Bogota-based Felipe Ayerbe co-founded Demetria together with Argentine-Israeli serial high-tech entrepreneur and angel investor Eduardo Shoval; Salomon Kassin, a commodity trading expert and pioneer of Colombia’s speciality coffee industry; and serial high-tech entrepreneur Yori Nelken, a pioneer of AI’s Natural Language Processing.
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.
“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,” concluded Eduardo Shoval, co-founder and executive chairman of Demetria. “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.”