Chicago-based startup Diamond Brew has emerged from stealth with an instant coffee that fully dissolves in hot or cold water, delivering the flavor, aroma, and caffeine content of premium brewed coffee.
Founded early last year by Douglas Yu and backed by investors including GNC CEO Michael Costello, Dream Ventures, Entrepreneur Ventures, and the Kali Mata family office, Diamond Brew is targeting Gen Z and Millennial consumers that are looking for affordable luxuries and ‘barista quality’ products without splashing out hundreds of dollars for a fancy espresso machine.
Launching direct to consumer and on TikTok Shop this week, the “brewless” coffee is sold in individually portioned recyclable aluminum pods to preserve freshness and aroma in packs of 12 (MSRP $29.88 or $2.49 per serving). The roasted grounds are upcycled and sent to companies that use them to make everything from furniture to pens.
‘Barista quality,’ no machine needed
Instant coffee—which is often regarded as the poor cousin of the brewed variety, although this perception is beginning to change—is typically made by roasting, grinding, and brewing beans.
The brewed coffee is then concentrated and spray dried or freeze dried to create soluble powder or granules, processing steps that reduce the caffeine content and remove oils responsible for flavor and aroma. While products vary, spray dried products in particular can often have a stale or burnt taste.
To tackle these problems, Diamond Brew works with a coffee roaster in China that has developed a proprietary freeze-drying process that locks in caffeine, flavor, and aroma. This creates a highly soluble product with 160mg of caffeine per serving and no residue, that smells and tastes like an espresso from a coffee shop, claims Yu, who was born in China and moved to Boston 12 years ago.
The coffee crystals have a luminescent quality that inspired the brand name and form a crema on top after stirring, explains Yu, a former journalist covering the consumer packaged goods (CPG) sector who spent three years at VC firm Springdale Ventures before going on his own entrepreneurial journey.
“All of these years of learning from thousands of CPG innovators and visionaries feels like a paid MBA, plus working at Springdale Ventures gave me the opportunity to talk to founders in a different way than you do when you’re a reporter.
“I knew I wanted to get into the industry but I was scared of touching anything too niche or buzzy, despite how sexy or appealing it might sound. The great thing about coffee is that consumption is growing and it’s very widely consumed, but it’s also shelf-stable, very light and easy to ship, and high margin, which is very important as my approach to entrepreneurship is a combination of idealism and pragmatism.”
“Diamond Brew represents innovation at its finest in the coffee industry. I’ve been looking for a product that solves a need for high quality caffeine and convenience, and this is the one.” Michael Costello, CEO, GNC
‘A combination of idealism and pragmatism’
According to Yu, there’s a “huge white whitespace opportunity for instant coffee” for Gen Z and Millennial consumers that started getting into coffee and other “affordable luxuries” during the pandemic but find the array of machines for making it at home both pricey and “intimidating.” Diamond Brew, by contrast, is “mess-free, hassle-free and convenient.”
The fact that several players have got into the upmarket instant coffee space in recent years, from Starbucks VIA and Nestlé’s Blue Bottle craft instant coffee to Cometeer, validates the market, says Yu, who started talking to coffee roasters all over the world in early 2023 to find a company he wanted to work with.
“It took me three to four months to find a roasting partner and this is a technology that we have exclusive access to. Freeze drying is nothing new; the secret really lies in the brewing process and how we preserve the flavor and caffeine content in an airtight tunnel. The flavor mimics what you’ll get from a machine-made espresso which is really stunning and the caffeine is on par with a double shot espresso.”
He adds: “We’re a digitally native brand with ambitions of ultimately becoming an omnichannel company. Our initial focus is direct to consumer but down the line we’re also planning to build a b2b platform so we could supply bartenders, restaurants or corporate offices.”
