Transforming Coffee Waste: Kaffe Bueno’s Circular Economy Innovation

The Alchemy of Coffee Waste: How Three Entrepreneurs Are Brewing a Revolution

How Kaffe Bueno is transforming coffee waste into premium cosmetics ingredients and why their success story matters for every circular economy innovator.

Every morning, 2.25 billion cups of coffee are brewed worldwide. What most people don't realize: only 1-20% of the coffee bean's nutritional complexity makes it into your cup. The rest oils, proteins, antioxidants, and fibres are treated as waste. Eighteen million tonnes annually, decomposing in landfills into methane, a greenhouse gas up to 86 times more potent than CO₂.

For three Colombian entrepreneurs sipping lattes in a London business school, this wasn't just wasteful. It was a business opportunity hiding in plain sight.

From Grandmother's Remedy to Molecular Science

Alejandro Franco grew up watching his grandmother press coffee grounds into cuts and scrapes folk medicine in Colombia where coffee was botanical first aid. Years later in Copenhagen, surrounded by biochemistry papers, he and his co-founders discovered she was right: coffee grounds contain essential fatty acids, diterpene esters, and other beneficial compounds proven to repair skin barriers and stimulate collagen production, among other health benefits.

But the real revelation came during his studies in London. "We were with friends from Scandinavia, so we noticed, well, they drink a lot of coffee," Franco recalls. "We went to coffee shops and saw all these coffee grounds being thrown away and we just started thinking."

The cultural disconnect struck them: "In Colombia, where we are from, coffee is used for many different things, like to treat wounds or to dye the hair or to absorb smells. There's a lot of health promoting compounds inside coffee, and when you make a cup of coffee, not much of that ends up in your cup."

Indeed, coffee's complexity extends far beyond caffeine. A single coffee bean contains over 1,000 chemical compounds including chlorogenic acid. During roasting, the Maillard reaction creates hundreds more aromatic compounds. Yet traditional brewing extracts primarily water-soluble elements, leaving the lipid-rich, nutrient-dense matrix behind as "waste."

Beyond Traditional Boundaries

In 2016, Franco and co-founders Juan Medina and Camilo Fernandez arrived in Denmark with business degrees and fresh perspectives unburdened by conventional biotech approaches. Rather than viewing their background as a limitation, they leveraged their business acumen to identify market opportunities that pure scientists might overlook.

"We don't see the lack of a diploma in science as a barrier," Franco explains. "We started reading research papers and using science as a tool to solve problems, rather than starting in the lab for the love of science."

They roasted coffee by day to pay rent. By night, they taught themselves lipid extraction, molecular fractionation, and polymer chemistry. No lab? They borrowed one. No equipment? They partnered with the Danish Technological Institute. Their business training helped them focus relentlessly on commercial viability rather than pure research curiosity.

The World's First Coffee Biorefinery

Today in Rødovre, Denmark, Kaffe Bueno operates the world's first coffee biorefinery fractioning spent grounds into high-value molecular ingredients. Using biosolvent, they achieve close to zero waste process.

This approach makes sense given coffee's composition. Spent coffee grounds typically contain 10-15% residual oils, 50-60% polysaccharides and fibers, 13-15% proteins, and significant amounts of polyphenols all valuable compounds left untapped by conventional disposal methods.

"If you think of upcycling and remove all the marketing buzzwords, it's basically efficient resource management," Franco says. "We have three options: discard the grounds without oil, sell them as an exfoliant, which we do, or continue the downstreaming. That's when we say double upcycle taking advantage of what could be considered waste in our own factory, we continue extending its life."

The Product Portfolio

Five products. One waste stream. Ingredients selling for €50-100/kg versus €1/kg for biofuel applications.

Pricing and Adoption Reality

For sustainable alternatives to achieve meaningful adoption, pricing matters as much as principles. Franco is candid about this challenge: "Sustainability alone doesn't drive adoption. Price must be competitive to market alternatives. And if not, a performance-based reason is expected to back up the premium. If a sustainable option is priced 50% higher, uptake will be dramatically slower".

By targeting premium cosmetics and benchmarking its ingredients against specialty oils such as argan oil, Kaffe Bueno positions itself at market-competitive price points enabling faster adoption while delivering higher functional value.

Navigating Food Regulations

Cosmetics were relatively straightforward. Food applications required more careful navigation. EU Novel Food Regulation mandates safety reviews for any ingredient not consumed in Europe before May 1997, a standard process designed to protect consumers.

"When we were getting into food, we worked through the novel food assessment," Franco recounts. The rigorous process ultimately confirmed their products met safety standards, opening food and nutraceutical markets exponentially larger than cosmetics. The thoroughness of European regulatory frameworks, while demanding, ultimately validated their technology's safety profile.

Strategic Validation: Follow the Money

2020: €1.1M investment round led by PINC (Paulig's venture arm)

January 2024: €6.2M Series A led by Borregaard, a Norwegian biorefining giant with a century of experience fractionating timber. They're doing to coffee what Borregaard did to wood transforming a single-use crop into a multi-product platform.

Supply partnership: Paulig (Finnish coffee giant) invested through PINC and supplies spent grounds from its Vuosaari roastery, which processes thousands of tonnes of coffee annually.

EU recognition: €2.5M grant from the European Innovation Council, selected from 4,000+ applicants.

The investment makes strategic sense. Global coffee production exceeds 10 million tonnes annually, with consumption concentrated in developed markets that generate the highest-quality spent grounds. This creates a distributed but predictable supply chain unlike many circular economy models.

Current Scale: Global Reach, Industrial Focus

Kaffe Bueno already supplies standardized, certified ingredients to brands across 40 countries, backed by Ecocert COSMOS certification and B Corp status.

Its sourcing approach prioritizes industrial partners, enabling consistent access to spent coffee grounds and avoiding the inefficiencies associated with highly fragmented waste streams an advantage that supports scalability across markets.

The Research Tension

Operating as a research-heavy biotech presents unique challenges. "Very tough," Franco admits. "We have a lot of ideas and potential products. It is difficult to maintain that rhythm of continuous research while at the same time standardization of the products promised to the market."

This year marked a strategic shift: "We have been working on focusing on replicating the quality promise to the market since we have done a lot of research for the last decade, and we need to deliver at scale while continuing research in the background."

The challenge is inherent to coffee's chemical complexity. Different coffee varieties (Arabica versus Robusta), roasting profiles (light versus dark), and even growing altitudes affect the molecular composition of spent grounds. Standardizing ingredients from such variable feedstock requires sophisticated quality control protocols.

What's Next?

"We are expanding our functional portfolio in personal care and getting into new industries" and have "plans for expansion into new markets, not from a commercial perspective, but production perspective."

Translation: decentralized biorefineries near consumption hubs New York, London, Tokyo, São Paulo. Local processing, global ingredient sales. This model leverages the fact that coffee consumption is highly concentrated geographically, with the EU, US, and Japan accounting for over 60% of global coffee imports.

The Long Game: Coffee as the New Palm Tree

The radical vision extends beyond waste reduction. With climate change threatening 50% of Arabica-suitable land by 2050, creating high-value markets for coffee by-products could help the industry.

"It makes sense that it's a commodity since people are only using about 1% of its potential," Franco explains. "But what if we could valorize the potential of the bean instead of just a cup of coffee? In a more long-term perspective, it could potentially help the farmers by increasing the value of coffee."

This matters because coffee farmers typically receive only 7-10% of the final retail price of coffee. If by-products from processing and spent grounds could generate additional revenue streams, it could fundamentally improve producer economics without requiring consumers to pay more for their morning brew.

With KLEANSTANT® challenging palm oil and KAFFAGE® replacing synthetic compounds, Kaffe Bueno is positioning coffee as a sustainable alternative to tropical deforestation. "People would see coffee as they see a palm tree where it's not only for one purpose."

The comparison is apt: oil palms yield not just cooking oil but also ingredients for cosmetics, cleaning products, and biofuels. Coffee cultivation already covers 11 million hectares globally. Maximizing value extraction per hectare could make coffee farming more economically resilient and environmentally sustainable.

The Entrepreneurs' Triumph

Three business students with fresh perspectives built what chemical giants overlooked for a century. They succeeded by combining business pragmatism with scientific rigor, staying connected to the cultural knowledge of coffee-growing communities whose agricultural labor was generating undervalued byproducts.

They saw what others couldn't: the dregs at the bottom of the cup weren't trash. They were treasure. Eighteen million tonnes annually, waiting for someone to look closer.

The grandmother pressing coffee grounds into her grandson's knee knew this intuitively. Now the world understands it molecularly. In Kaffe Bueno's alchemy, waste has become gold, and the future of coffee might have nothing to do with caffeine at all.

Key Takeaways for Innovators:

• Cross-disciplinary thinking matters: Business training combined with scientific learning can reveal opportunities pure specialists might miss
• Unit economics trump sustainability claims: Competitive pricing is non-negotiable for market adoption
• Regulatory validation adds credibility: Working with regulatory bodies establishes safety credentials and market access
• Scale vs. innovation tension: Eventually you must choose between continuous R&D and delivering on promises
• Industrial supply chains beat retail: Collection logistics determine circular economy viability

Kaffe Bueno's ingredients are used by major cosmetic brands globally, though most consumers never see the name only the upcycled coffee oil in their face cream or palm-free surfactant in their shampoo. For the founders, that invisibility is the point. They're building infrastructure for a world where waste does not exist.