Table of Contents

1. Key Highlights:
2. Introduction
3. The Rise of Prefer: Innovations in the Beverage Industry
4. Strategic Partnerships and Market Expansion
5. Hybrid Coffee Solutions: Blending Tradition and Innovation
6. The Future Direction: Expanding Beyond Coffee

Key Highlights:

• Singapore startup Prefer introduces bean-free coffee and cocoa powders aimed at food and beverage manufacturers facing rising prices and dwindling supplies.
• The company raises $4.2 million to enhance production capacity and engage in R&D for sustainable flavor development.
• New partnerships in Asia Pacific, including with Ajinomoto, allow Prefer to expand its market reach and offer a blend of affordability and sensory experience in coffee products.

Introduction

As the global appetite for coffee and cocoa continues to soar, challenges in sourcing these commodities are becoming increasingly pronounced. Factors such as climate change, supply chain disruptions, and rising costs are making traditional coffee and cocoa harder to access for manufacturers. In light of these daunting hurdles, Singapore-based startup Prefer has stepped up with a groundbreaking innovation—soluble, bean-free coffee and cocoa powders. Not only are these products designed to alleviate supply chain pressures, but they are also positioned to revolutionize the market by offering sustainable alternatives that do not compromise on taste. This article delves into the details of Prefer’s offerings, the driving forces behind its innovations, and the strategic moves that have propelled its recent growth.

The Rise of Prefer: Innovations in the Beverage Industry

Founded in 2022 by Jake Berber and Ding Jie Tan, Prefer has quickly garnered attention with its unique approach to coffee and cocoa production. By leveraging proprietary fermentation and roasting processes, the company creates products that mimic the taste and functionality of traditional coffee and cocoa while circumventing the inherent supply chain challenges. With its recent funding round of $4.2 million led by At One Ventures and Chancery Hill Ventures, Prefer's total funding has now reached $6.2 million. This financial boost not only enhances production capabilities but also fuels ongoing research and development into cocoa flavor profiles.

A New Type of Beverage Solution

The strategic vision behind Prefer is straightforward yet ambitious: to democratize access to quality coffee experiences amidst rising costs. The company’s products are engineered to be blended with traditional coffee, effectively stretching the supply and reducing consumer prices. According to CEO Jake Berber, incorporating up to 40% Prefer products allows brands to maintain a premium coffee profile while benefiting from significant cost reductions.

The Technology Behind the Taste

Prefer's unique offerings rely on a proprietary fermentation technique that utilizes okara (a byproduct of tofu production) and broken rice as primary ingredients. By harnessing specific microbes during the fermentation process, Prefer creates distinct flavors and aromas closely resembling conventional coffee. This innovation minimizes reliance on traditional bean sourcing, providing a more stable and sustainable supply of alternatives.

Berber explains that the fermentation process and the resultant ingredient combinations are designed to replicate coffee flavors, creating an experience that resonates with coffee lovers. “Our goal is to recreate the sensory aspects of coffee while using cost-effective ingredients,” he stated.

Strategic Partnerships and Market Expansion

To further its mission, Prefer has entered two notable partnerships designed to enhance its operational footprint in the Asia Pacific region. Collaborating with Ajinomoto, a leader in ready-to-drink coffee in Thailand, allows Prefer to tap into local expertise and distribution networks. Simultaneously, an alliance with The Coffee Ferm, a new entity focused on manufacturing and distributing Prefer’s products in Australia and New Zealand, presents a keen opportunity to reach broader consumer bases.

With these partnerships, Prefer intends to solidify its presence in the food and beverage industry while assisting companies in lower-cost product offerings. Berber emphasized the company's commitment to collaborating with established coffee brands rather than competing against them, stating, “We want to make coffee accessible for all.”

Hybrid Coffee Solutions: Blending Tradition and Innovation

Prefer’s dual product offerings—a ground coffee that can be seamlessly integrated into existing coffee systems and a soluble coffee for instant formulations—illustrate the company’s adaptable strategy. The concept of hybrid products where Prefer's formulations coexist with traditional coffee ensures that manufacturers can offer a budget-friendly alternative without sacrificing quality.

This innovative solution is particularly relevant as global coffee prices surge. Prefer's products can be utilized to create more affordable yet satisfying coffee experiences. Berber highlights that the substantial number of memoranda of understanding (MOUs) secured—totalling around $15 million, with $10 million tied directly to the development of soluble powders—demonstrates market demand for these alternative products.

Focus on Affordability and Sustainability

Prefer's approach buckles down on the essential balance between cost, quality, and sustainability. While other alternative coffee startups often prioritize sustainability narratives, Prefer's primary focus lies on making coffee more affordable without compromising flavor. The sustainability aspect, while beneficial, serves as a secondary angle in the company's growth strategy.

Berber articulated the company's philosophy clearly: “The sustainability story is a bonus, but really we’re talking about reducing costs and maintaining flavor. This is our competitive advantage.” By ensuring that production methods and ingredient sourcing are economically viable and ecologically sustainable, Prefer is positioning itself as a market leader ready to adapt to ongoing environmental challenges while serving consumer needs.

The Future Direction: Expanding Beyond Coffee

Looking ahead, Prefer intends to leverage its fermentation technology to explore flavors beyond coffee and cocoa. A new project aims to incorporate spent coffee grounds into the ingredient mix alongside rice and okara. The adaptability of this technology could allow for the recreation of flavors associated with other high-demand crops such as vanilla and hazelnut, further diversifying Prefer's product offerings.

Berber acknowledged the rigorous research and development process that has defined Prefer’s journey thus far—investing time and resources to understand the chemical underpinnings of coffee flavors has led to pioneering innovations in its manufacturing processes.

Creating New Flavors and Ingredients

The potential for innovation extends beyond beverages, as Prefer envisions further applications for its fermentation technology. This could lead to a future where consumers enjoy a broader array of familiar tastes derived from sustainable, plant-based sources. The resulting products would tap into the consumer demand for ethically produced food items without sacrificing sensory quality.

FAQ

What is Prefer?

Prefer is a Singapore-based startup focusing on producing soluble bean-free coffee and cocoa powders to aid food and beverage manufacturers. The company was founded in 2022 by Jake Berber and Ding Jie Tan.

How does Prefer create its coffee alternatives?

Prefer uses a proprietary fermentation and roasting process, primarily utilizing ingredients such as okara and broken rice, to develop flavors that mimic conventional coffee and cocoa.

What are the benefits of using Prefer's products?

Using Prefer’s products can reduce costs significantly, allowing manufacturers to stretch their coffee supplies and provide more affordable options to consumers without compromising flavor quality.

What are the recent developments for Prefer?

Prefer recently raised $4.2 million to expand its production and research initiatives while securing key partnerships with Ajinomoto and The Coffee Ferm to enhance market reach in Asia Pacific.

Is sustainability a focus for Prefer?

While Prefer emphasizes affordability and flavor in its core offerings, sustainability is also a consideration in its production practices, aimed at reducing costs while maintaining quality.

What future products does Prefer plan to explore?

Moving beyond coffee and cocoa, Prefer is researching the potential for using its fermentation technology to create flavors associated with other high-demand crops, such as vanilla and hazelnut.

As Prefer continues to navigate the complexities of the beverage industry, its innovative approach and commitment to cost-effective production could set a significant precedent for how food manufacturers address both consumer demand and environmental responsibility.