(Bloomberg) -- Mondelez International Inc., the maker of Toblerone and Milka chocolate bars, is putting more money behind cell-based cocoa, part of the snack company’s effort to address the unpredictable costs and supplies of cocoa beans.
This is Mondelez’s second time investing in Celleste Bio, an Israeli startup that uses cells extracted from cocoa plants and grown in bioreactors to produce cocoa butter and cocoa powder, which are necessary to make chocolate. Mondelez, which is making the investment through its SnackFutures Ventures arm, declined to share its financial stake.
“Since the first investment in 2022, the Celleste team has proven the scientific capability and marketplace fit — and now it’s time to focus on scaling production,” said Richie Gray, global head of SnackFutures Ventures, which identifies and invests in businesses that will help Mondelez grow. Chocolate is an investing priority and Mondelez is exploring ways to expand the cocoa supply for the long-term, Gray added.
Celleste has closed a $4.5 million seed financing round led by Supply Change Capital and including a number of other participants such as Consensus Business Group, Trendlines Group and Mondelez.
Cocoa prices remain on a historic tear, as crops in West Africa have been hit by extreme weather and disease. Futures contracts for cocoa in New York are now trading at around $9,000 a ton — more than double what it cost a year ago. It hit a peak of almost $12,000 a ton in April.
Chocolate companies have been scrambling for alternatives, from diversifying their portfolios with more gummy snacks to playing up non-chocolate flavors in traditional chocolate candies.
Mondelez, which is estimating an increase of 10% year-over-year in chocolate demand, is searching for new sources of chocolate. Finding alternatives to standard cocoa is a necessary part of its growth plan.
“We’re excited about the potential opportunity to use this technology in some of our products,” Gray said.
Scaling up
Attempts at scaling cell-based meat have been beset by issues both technical and financial, but Celleste’s Chief Executive Officer Michal Beressi Golomb said plant cells are easier and more cost effective to grow.
Unlike chocolate alternative makers relying on substituting cocoa-based ingredients, the startup says its products are identical to the real thing because they are the real thing, just grown in bioreactors instead of on trees.
She expects Celleste’s cocoa butter to be on the market in 2027, with the powder likely to follow shortly thereafter, and aims for both to be offered at the same price as conventional chocolate ingredients.
Golomb expects most of the holdup to be regulation. While the products will be identical to what’s currently available, Golomb said, the new way of growing them requires regulatory approvals in various markets, including the US and European Union.
--With assistance from Ilena Peng.
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