Fermtech's Koji Cocoa: Turning Chocolate Waste Into A Cocoa Powder Alternative
- Gauri Khanna
- 2 hours ago
- 4 min read
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A UK startup is using an ancient fungal fermentation technique to transform discarded cocoa shells into a lower-cost, lower-carbon cocoa replacement.
Fermtech's Koji Cocoa can reduce production emissions by 98% and cut ingredient costs for manufacturers by up to a third.
With £2.5M in fresh funding, the Oxford-based company is moving towards commercial scale at a moment when cocoa prices and supply volatility are at historic extremes.
The global chocolate industry is under considerable strain. Cocoa prices reached record highs in 2024, supply chains remain fragile, and the environmental cost of production continues to draw scrutiny. Into this difficult landscape steps Fermtech, an Oxford-based food technology company that believes the solution to chocolate's sustainability problem may already exist within the very crop causing it. By applying an age-old fermentation technique to materials the industry currently discards, Fermtech is attempting to build a cocoa ingredient that is simultaneously cheaper, cleaner and more resilient than what chocolate manufacturers rely upon today.
Waste Not: Rethinking the Cocoa Supply Chain
Cacao is a remarkably underutilised crop. An estimated 70% of the fruit is discarded during conventional cocoa and chocolate production, including the outer shells, husks and pulp that surround the beans themselves. These materials are largely treated as waste, yet they retain the aromatic compounds, flavonoids and nutritional properties that make cacao a valued ingredient in the first place.
Fermtech's process begins with these byproducts. Using solid-state fermentation, a technique in which microorganisms are cultivated on a solid substrate rather than in liquid, the company transforms cacao husks and shells into a cocoa powder alternative it calls Koji Cocoa. The fermentation is driven by koji, a strain of the mould Aspergillus oryzae that has been used in East Asian food production for centuries. Koji is the biological engine behind miso, soy sauce, sake and a range of fermented condiments, valued for its ability to break down complex carbohydrates and proteins into simpler, more digestible and more flavourful compounds. Applied to cacao waste, it unlocks flavour and nutrition from material that would otherwise be landfilled or composted.
The resulting ingredient is described as a clean-label cocoa replacer that preserves the natural flavour, colour and texture associated with conventional cocoa powder. It can be used across a wide range of applications, from biscuits and brownies to ganaches, fillings and chocolate bars. Crucially, it requires no additional farmland, relies on existing agricultural sidestreams, and, according to the company, delivers a 98% reduction in greenhouse gas emissions compared to conventional cocoa production. Manufacturers, meanwhile, are reported to benefit from cost savings of between 25% and 33% on their cocoa spend. The approach is consistent with broader fungal fermentation strategies that convert agricultural sidestreams into high-value food ingredients.
Funding and the Case for Cocoa Resilience
Fermtech has raised £2.5M (approximately $3.3M) in a funding round led by Elbow Beach, which contributed £2M of the total, with further participation from Carbon 13 and Empirical Ventures. The capital will be used to scale production and pursue commercialisation in the UK and international markets.
The timing reflects both the maturity of the technology and the urgency of conditions in the cocoa market. Climate change has pushed cocoa stocks to their lowest levels in a decade. Extreme weather events and crop diseases are concentrated in Ivory Coast and Ghana, which together account for the majority of global cocoa production, yet have already lost more than 85% of their forest cover since 1960. Scientists project that up to a third of the world's cocoa trees could be lost by 2050 if current trends continue. Against that backdrop, ingredients that can decouple chocolate manufacturing from raw cocoa supply chains carry genuine commercial appeal.
Fermtech is already in discussions with companies across the confectionery, bakery and snacking sectors. The company's founder and chief executive, Andy Clayton, has emphasised that the ambition is not simply environmental but practical: reducing input costs, stabilising supply and delivering products that consumers actually want to eat. Jonathan Pollock, chief executive of lead investor Elbow Beach, noted that the ingredient's ability to reduce costs while improving supply chain resilience is central to its potential for adoption at scale.
Fermtech is not operating in isolation. Several other startups are pursuing cocoa alternatives using different approaches, including carob-based formulations, coffee-derived ingredients and cell-cultivated cocoa. The koji-based fermentation route Fermtech has taken is notable for its circularity: it generates value from a waste stream that already exists within the supply chain, rather than requiring the cultivation of an entirely new crop or biological system.
Whether Koji Cocoa can achieve the scale necessary to make a meaningful dent in global cocoa consumption remains to be seen. The technical foundations appear sound, the market conditions are unusually favourable, and the funding provides a credible runway. For an industry searching for ways to manage cost, carbon and supply risk simultaneously, an ingredient that addresses all three from discarded crop material is at least worth tasting.