Bean-less RTD Coffee Startup Nets $40 Million in Funding

Consumers are not letting go of their ready-to-drink coffees anytime soon.

June 30, 2022

SEATTLE—A bean-less ready-to-drink coffee startup was just awarded $40 million in a Series A investment round and plans to use the funds toward the launch of two new cold brew flavors, according to a news release. Atomo Coffee has already released the two RTDs, Classic Black and Ultra Smooth, and both are brewed from plant-based ingredients and include the same level of caffeine consumers expect from a cold brew. The company also has an RTD oat milk latte cold brew.

Atomo reverse engineers the coffee bean by soaking date seeds that have been “upcycled.” The seeds are soaked in a proprietary blend of ingredients (including grape, chicory, tea-sourced caffeine and other natural flavors), air roasted and brewed.

"With Atomo in the hands of the consumer we are empowering them to drink coffee they love while making a choice to do something better for the planet every day," said Andy Kleitch, CEO and cofounder of Atomo.

The company’s mission is to offer coffee with a reduced environmental impact, and its RTDs claim to use 93% less carbon emission and 94% less water.

Many reports over the past five years have highlighted the effects of climate change on coffee growing regions around the globe. Drought, frost, as well as rising temperatures, have made current coffee growing regions less suitable, leading growers to deforest areas of virgin rainforest uphill to reach more tolerable climates for their coffee plantations.

According to NACS State of the Industry data, other packaged beverages, which includes RTD coffee, represented 15.1% of package beverages category sales and grew double digits in sales and profits year over year.

RTD coffee has seen tremendous growth in the past several years and has started to blur subcategory lines with energy drinks. Earlier this year, Starbucks released its first-ever line of energy drinks called Starbucks BAYA Energy and uses caffeine naturally found in coffee fruit, plus added vitamin C. In 2021, Coca-Cola launched Coca-Cola with Coffee with the tag line “sips like a Coke and finishes like a coffee.”

(Here’s a closer look at how the packaged beverages category performed in 2021.)

Coffee consumption has soared to a two-decade high as Americans brew up new post-COVID routines, according to the National Coffee Association. Sixty-six percent of Americans now drink coffee each day, more than any other beverage including tap water and up by nearly 14% since January 2021, the largest increase since the association began tracking data.

To read more about coffee trends and what consumers are demanding in their brewed drinks, check out “Caffeine Fix” in NACS Magazine.