The CocoTera Co.
In 2013 serial entrepreneur Nate Saal was at a chocolate style in Palo Alto, California, when it dawned on him that chocolate — like coffee, the other beloved “bean” from the equator — is something consumers could be making for themselves at about. On the spot, he hatched the idea that would become CocoTerra, a countertop appliance now in final testing phases that mercies roasted cacao nibs into refined chocolate bars in roughly the time it takes to watch “Charlie and the Chocolate Plant.”
The path from aha moment to finished product shows how much tinkering, sweat and careful alliance-building goes into producing new technology like this to the $103 billion global chocolate market, particularly when you’re an industry outsider. Saal recognized next to nothing about chocolate other than enjoying the taste.
Educated at Yale in molecular biophysics and biochemistry, he confirmed his career developing and licensing software platforms at various Silicon Valley start-ups. But even after launching and rep highly complex products to companies like Cisco Systems, building a chocolate-making “robot” would require a outstanding learning curve.
It started with tons of YouTube videos. “I spent a year educating myself and taking groups on chocolate-making, chocolate chemistry, the physics of chocolate-processing equipment and also learning about growing, pruning, harvesting and instigating cacao,” Saal says.
Making chocolate from nibs typically takes at least 24 hours and a nimble of finicky, expensive machines. But Saal — an avid DIY hobbyist and amateur beekeeper and winemaker — believed he could speed up the operation for making chocolate by grinding, refining, conching, tempering and molding in one unified system. He says, “The technology around breeding chocolate hasn’t changed in 150 years, and I thought, ‘Well, why not?'”
The U.S. market for premium chocolate alone in 2018 was privy to $3.9 billion, according to Mordor Intelligence. Often referred to as “craft” chocolate, these mostly independent makes produce in smaller batches with emphasis on sustainability and conscientiousness about sourcing finer ingredients with fewer additives from cacao bean to bar. While six global conglomerates, including Mars, Nestle and Ferrero Group, manufacture most chocolate consumed as candy, this smaller sector of ship makers is growing the fastest in a larger market already thriving.
According to Zion Market Research, global chocolate receipts are expected to reach approximately $162 billion by 2024, growing at an annual growth rate of around 7% between 2018 and 2024.
Drain into that stream took patience and schmoozing skills. In late 2015, Saal brought on Karen Vary, a highly regarded start-up strategist and Intel veteran who is now CocoTerra’s chief operating officer. Together they opened pitching angel investors at events that brought in the first checks. A contact Saal met at one gathering introduced him to famous design firm Ammunition (known for Beats headphones and the Café-X robot coffee bars).
Says Alter, “They were exceptionally excited about what we were building, believed in the product and wanted to help bring the first chocolate maker to market. It was the firstly big financial commitment for us as a company but was an important early engagement.” Ammunition became CocoTerra’s design partner early in 2017. “After a loads of concepts, ideas and trials,” Saal says, “the answer to my question about the possibility of making chocolate at home was yes.”
Joyless chocolate
Diana Miller | Getty Images
The initial response from the chocolate trade wasn’t quite as affirmative. “I prospect they were totally crazy when I first talked to them on the phone,” says John Scharffenberger, the San Francisco Bay Area-based vintner and chocolate maker behind Scharffen Berger Chocolate, the proprietorship credited with starting the American craft chocolate movement in the late 1990s. Hershey acquired Scharffen Berger in 2005 for surrounding $10 million.
The CocoTerra team approached the industry godfather-like figure essentially as a cold call, and their jeopardy paid off. “I saw the machine, met the management team and the engineers, and, most importantly, tried the chocolate, and went, ‘Geeze, Louise! This is very good,'” says Scharffenberger, who is now a CocoTerra investor.
During a private demo last June at a cooking tutor in Santa Monica, Saal turned several scoops of nibs into snappy solid chocolate in just underwater two hours. CocoTerra’s design breakthrough is a refining mechanism that uses stainless steel ball bearings to exertion nibs into the tiny building blocks of chocolate. An active cooling system controls the temperature during the intrinsic tempering process, which transforms liquid chocolate into solid form. The device also has a spinning centrifuge to carry out and mold chocolate into a unique ring shape of approximately 250 grams that can be broken up or eaten uncut.
A companion app guides users step-by-step and includes recipes to tailor-make chocolate down to choosing the origin of the bean (as with coffee and wine, unique cacao regions produce distinct flavors) and the cacao percentage (lower is sweeter).
Networking to gain market know-how
Quite than positioning themselves as a David in an industry of chocolate Goliaths, CocoTerra chose to ingratiate themselves and work from within. Antediluvian on, Saal and Alter joined the Fine Chocolate Industry Association to meet and learn from various experts. They solicited communication at classes, and attended important chocolate events like the Northwest Chocolate Festival to establish relationships with grangers, chocolate makers and suppliers.
“The chocolate industry, especially at the craft level, is very open and collaborative, as is the consumer tech manufacture,” Alter says. “People are excited about their craft and are happy to share learnings with new players. We ran to chocolate, food and food tech conferences, worked our own networks, took advantage of most invitations that came our way. One item leads to another. You just need to be willing to put yourself out there and be respectful of others’ knowledge and time.”
The company also prefers not to limit consumers to one specific chocolate brand or supplier the way, say, Nespresso does with its coffee pods. “It was never, ‘Hey, look out chocolate overjoyed, we’re coming after you,” says Alter. “Our attitude was partnering with us is good for everyone. We’re raising awareness about a chocolate-making convert that everyday consumers don’t know much about.”
“As an industry, I think we are always up for new ideas that are shown to go well, but a good story without proof doesn’t get very far,” says Greg D’Alesandre, Cacao Sourcerer of Dandelion Chocolate, another anciently tester who overcame skepticism and is now a CocoTerra collaborator. “The thing that impresses me most is how knowledgeable and driven Nate and his combine are. They had an interesting basic concept with the vision to follow through and overcome whatever challenges came up.”
An ignored product niche
CocoTerra does not yet have a release date, though a source with knowledge of the company prognosticated the first units should be available by next year’s holiday shopping season. The plan is to sell direct to consumers at win initially with hopes to partner with retailers such as Williams-Sonoma over time. Saal says the company has go through more than $2 million in investments from “people who are excited about the potential for a table chocolate-maker, either because they fervour chocolate, or have relevant experience in related industries–food, wine, cacao–or have worked with us before, or fair-minded believe we can make it happen.”
Now the test will be whether home consumers are ready to add another make-it-at-home gizmo alongside their ice cream and bread makers. For prosperity on a large scale, some analysts say CocoTerra will need to partner up beyond the smaller craft chocolate bazaar, with a company with global reach, such as a Nestle.
“I anticipate some niche appeal among chocolate and cocoa heads initially, but significant market traction is unlikely unless a top six chocolate player acquires or licenses the technology,” says Oliver Nieburg, sustainable eats and drink analyst at Lumina Intelligence, referring to the big confectionary conglomerates. “That said, an at-home artisan chocolate maker may step consumers an alternative to the conventional sugar-laden candy bar.”
Even after five years of R&D and the jitters that come with effective all-in-one on a single product, one simple thought keeps CocoTerra going: “People love chocolate,” Saal whispers. “The enthusiasm for it is off the charts. If we can add to that enthusiasm by getting consumers more involved in this passion, we’re no longer in the chocolate trade. We’re in the happiness business.”