If they can decaffeinate coffee, why not decarbonize it, too?
Berkeley-based Bellwether Coffee proposed to do just that by building a fully electric micro-roaster. The product replaces conventional gas-burning machines to turn raw beans into perfectly browned vehicles for caffeination and delectation.
Coffee roasters don't often drip into the pages of Greentech Media, even if their products regularly fuel our journalistic process. But this roasting startup filled its hopper with a batch of big names from cleantech venture capital.
Nancy Pfund's DBL Partners and SolarCity founders Lyndon and Peter Rive led a $40 million Series B for Bellwether, announced Wednesday. They were joined by early-stage cleantech VC Congruent Ventures, and by FusionX, Coffee Bell, Tandem Capital, Spindrift Equities, XN Ventures, Balius Partners and Hardware Club.
"We’ve done stranger things, like invest in an electric car company," cleantech veteran Pfund said Wednesday, when asked about the shift to coffee equipment investing.
That car company, which she invested in 13 years ago, is Tesla, and Pfund didn't make the comparison by accident.
"Bellwether fits squarely in DBL’s thesis of the electrification of everything," she explained. "Whether it’s your morning commute or your morning cup of coffee, we’ve got to unhinge from carbon generation and fossil fuels, and we’ve got to do it in a way that provides a superior customer experience."
In other words, it's not enough to roast coffee with 90 percent fewer greenhouse gas emissions than the gas-powered industry standard, as Bellwether claims to do. It has to enhance the customer experience, by delivering fresher coffee at the point of consumption, by streamlining permitting and installation, and by giving coffee-shop staff software-enabled roasting options that don't require advanced technical expertise.
"The electric roaster pays for itself pretty quickly, and it also makes for more theater in the coffee shop," Pfund said. "You have this amazing aroma going on while you're buying your coffee."
At a Watt It Takes podcast taping last year, Pfund described her willingness to engage in public policy to open up new markets. Bellwether's raise coincides as a robust blend of policies to encourage building electrification are coming to a boil.
As GTM's Justin Gerdes reported last month, California wants to electrify any and all building activities and phase out natural-gas combustion. "California policymakers have primed the market for builders, installers and manufacturers to step up and deliver solutions for zero-emission buildings."
Bellwether's hometown of Berkeley led the nation in banning natural-gas hookups for new low-rise multifamily buildings; that rule kicks in on New Year's Day. Similar ordinances are percolating in many more California cities.
Besides the electrification thesis, "a lot of very fun parallels" link the Bellwether deal to Pfund and the Rive brothers' home turf of clean, distributed energy, where the three have some shared history.
DBL invested in the brothers' company SolarCity, which became the largest rooftop solar company in the U.S. for a time. They left shortly after DBL portfolio company Tesla acquired SolarCity. Earlier this year, they signed on as advisers to off-grid solar startup Zola Electric, another DBL portfolio company.
Like the clean energy sector, the coffee market is undergoing a transition to decentralization and digitization. Bellwether caters to an industrywide shift toward distributed roasting, with more customers seeking out locally roasted coffee instead of industrially produced beans shipped from national brands. It also packs digital controls that the company says make it easier to achieve desired flavor profiles without extensive training.
“We expect in-store roasting at cafes and grocery locations to become the rule, not the exception," Bellwether CEO Nathan Gilliland said in a statement. "We are proud that the Bellwether Roaster has become the most consistent and controllable commercial coffee roaster available.”
Just as SolarCity intuited that high upfront prices tamped down potential demand for solar, Bellwether offers lease deals to avoid the bitter taste of capital expense.
Pfund and Lyndon Rive will join Bellwether's board, where they can advise the company on growing its manufacturing and marketing capabilities. Its website lists 30 coffee shops across 16 states using the device.
It's worth noting that, since these electrified roasters charge from the grid, they won't be fully carbon-free until the fuel mix supplying the grid cleans up. Short of decarbonizing the entire grid, companies can contract for clean power, Pfund noted.
Then again, if there are synergies to be found in a vertically integrated, end-to-end clean energy and coffee roasting company, Bellwether's advisers know where to look.