Start-ups set out to make coffee more sustainable

Coffee is a versatile drink: a stimulant, a social catalyst, a source of endless debate about roasts and terroir for coffee snobs. But, in Colombia, the world’s third-largest producer, it has found yet another use: as a building material.

Thanks to Bogotá-based construction firm Woodpecker, which turns husks left over from coffee production into building boards, nearly 70,000 people now live or study inside homes and schools made from coffee waste.

Woodpecker is not alone in trying to harness the potential of by-products from one of the world’s favourite drinks. As global caffeine levels go from high to stratospheric, start-ups around the world are proposing solutions for the sector’s growing waste problem.

Some 3bn cups of coffee are drunk around the world every day and demand is surging. Consumption has doubled since the 1990s as burgeoning middle classes in countries such as India and Indonesia have increased their intake. China had one Starbucks outlet in 1999; now it is on track to have 9,000 by 2025.

This generates a lot of waste: each year, millions of tonnes of methane-generating spent coffee grounds go to landfill, along with many of the disposable cups used by coffee outlets. Further up the supply chain, the processing of coffee berries into beans creates farm waste — in the form of husks, pulp, and contaminated water.

New ways of packaging coffee — such as the aluminium cartridges that have helped turn it from a commodity into a luxury product in rich countries — only create new streams of waste. Sales of Nestlé’s Nespresso pods were boosted by the Covid-19 pandemic but, while the company encourages recycling, it also says that this happens to only about a third of the pods it produces.

This year, Nespresso rolled out compostable pods in France and Switzerland, although Guillaume Le Cunff, the coffee-maker’s chief executive, insists that both the aluminium and biodegradable versions are “absolutely sustainable”.

“The more choice we bring, the more chance we have to embrace circularity,” he says, adding that other methods of making coffee, such as in cafetières, often use water and ground beans less precisely than pod machines, leading to greater carbon emissions — a point supported by a recent study.

Le Cunff is not alone in emphasising circularity. The climate and biodiversity crises — and the associated pressure from investors to meet more stringent environmental, social and governance (ESG) criteria — are pushing industries worldwide to explore circular economy principles, which aim to eliminate waste from economic systems.

In September, the International Coffee Organization, a trade body, announced the creation of a Center for Circular Economy in Coffee. Based in Turin, its goal is “accelerating the circular transition in the coffee supply chain”. Vanúsia Nogueira, the ICO’s executive director, says that “fostering circular economy solutions will help . . . [transform] waste into new job and income opportunities”.

In Woodpecker’s case, the opportunity is to make a lightweight, easily transportable material that can be used for construction in remote areas of Colombia — meeting demand for social housing. After experimenting with different types of natural fibre, it settled on a composite of coffee husks — of which there is a plentiful supply in Colombia — and plastic, as these offer the qualities it seeks.

“Coffee husks give you the strength . . . while the plastic gives you the durability,” explains chief executive Alejandro Franco. The firm’s colourful houses are certified as earthquake safe, he adds. “The lighter the construction, the more it dances with an earthquake.”

Other companies are starting from the opposite end of the coffee life cycle: with spent grounds.

In Germany’s capital, Berlin, for example, Kaffeeform is taking an elegantly circular approach, turning coffee grounds into reusable cups. According to chief executive and founder Julian Nachtigall-Lechner, cafés — which would normally pay a fee to dispose of their grounds — are happy to hand them over instead to Kaffeeform’s fleet of cyclists, who bring them to a processing hub in the middle of the city.

Only 10 per cent of the $200bn generated annually by the coffee industry stays in producing countries

There, they are turned into new products — including cups that end up back in the very cafés that supplied the raw materials. It is a “good story” for Berlin’s hipster coffee shops to tell their customers, says Nachtigall-Lechner.

The coffee industry’s sustainability challenges extend beyond waste, however. Coffee consumption is expected to double by 2050, with growth particularly strong in Asia and Africa. But rising temperatures are slashing yields and threatening to render up to half of the world’s current coffee farmland unusable. Growers, many of whom are in poor countries, are struggling to make a living. Only 10 per cent of the $200bn generated annually by the industry stays in producing countries.

At the same time, coffee production is driving deforestation. It is one of the commodities targeted by new EU rules banning the import of products linked to deforestation from the end of next year.

All of this casts doubt on whether the sector can meet increasing demand. Cole Shephard, founder of US-based start-up the Green Coffee Company, says the current supply chain model must be overhauled to create a system that is sustainable and profitable.

While most producers source from a patchwork of smallholders via middlemen, Green Coffee, which operates in Colombia, controls the whole supply chain, allowing it to pay growers more and to embrace a circular economy model that, it says, generates bigger profits.

The firm, which closed a $25mn series C equity fundraising round in June, is developing ways to turn pulp from coffee processing into a range of products, including fertiliser and flour. It will also ferment the pulp to produce ethanol.

Most coffee is grown by farmers who have less than one hectare, so trying to amass pulp from them would be a long and cumbersome process — not what is needed for ethanol production at scale. So Green Coffee, which describes itself as Colombia’s largest producer, now owns around 4,000 hectares and has nearly 14mn trees, enabling it to centralise this process.

The start-up has poured $8mn into building a distillery, which will deliver a return on investment of 18 months, says chief executive Boris Wüllner. Once it is up and running, the firm will produce 12,000 litres of pure ethanol a day, he says.

Green Coffee is always trying to see “how we can take the garbage from the farm” and use it to “make a profit” to give back to investors, says Wüllner. “That’s our circular economy approach.”