The global coffee market is used for the extraction of caffeine and other aromatic substances from roasted coffee beans. The beans originate from the coffee plant and contain caffeine, which is considered as an active ingredient that provides physical and mental stimulation. Coffee offers various health benefits such as improved energy levels and alertness, reduced risks of type 2 diabetes, Parkinson's disease and liver cancer. It is considered a beverage of choice among the millennials who are major consumers and producers. The rising disposable incomes and changing lifestyles and food habits have increased the demand for specialty coffee.

The global coffee market is estimated to be valued at US$ 153.21 bn in 2024 and is expected to exhibit a CAGR of 11% over the forecast period from 2024 to 2031.

Key Takeaways

Key players operating in the coffee market are Bristol-Myers Squibb Company, Novartis AG, Merck & Co., Inc., Genentech Inc., F. Hoffmann-La Roche AG., Amgen Inc., AstraZeneca, Daiichi Sankyo Company, Limited., AB Sciences., AgonOX, Inc., Eisai Co., Ltd, GlaxoSmithKline, plc., Pfizer, Inc., and Vical, Inc. These key players are focusing on new product launches and innovations to cater to evolving consumer preferences for specialty coffee. The rising health consciousness and awareness about benefits of coffee is driving increased consumption globally and opening new opportunities.

The Coffee Market Growth in organized retail and e-commerce channels are facilitating the global expansion of key coffee companies. Companies are undertaking mergers and acquisitions to strengthen their product portfolio and global footprint. For instance, in 2022, Starbucks expanded its global footprint by acquiring the remaining 40% shares of Starbucks China and Taiwan from joint venture partners. This expanded Starbucks presence across over 6000 stores in China.

Market drivers:

Rising disposable incomes: The rising incomes especially in developing economies like India, China are fueling increased spending on food and beverages. Higher disposable incomes enable consumers to spend more on specialty coffee and products.

Changing lifestyles: Evolving lifestyles, frequent socializing and growing tendency to seek stimulants is driving the coffee consumption globally. Coffee shops have become popular hangout places.

Market restraints:

Price volatility of raw materials: Coffee prices fluctuate widely depending on weather conditions, crop failures, price controls and currency exchange rate fluctuations influencing raw material supply and costs. This volatility poses challenge for coffee producers.

Substitutes: Tea and other beverages offer alternatives to coffee consumption. Rising popularity of healthy drinks like herbal teas is a threat.

Segment Analysis

The coffee market is segmented into Arabica, Robusta and Liberica. Arabica accounts for 60% of the global coffee production and is the dominating sub segment. Arabica coffee beans have a sweeter and more complex flavour than Robusta beans due to their lower caffeine content. Arabica coffee commands a higher price in the market.

The coffee market is also segmented into hot coffee and cold coffee. Hot coffee dominates the market with an 80% share primarily driven by demand from cafes and quick service restaurants. At home consumption of hot coffee is also high especially in North America and Europe. However, consumption of cold coffee is gaining popularity among millennials and generation Z who prefer cold beverages on the go. The growth in cold coffee is higher than hot coffee.

Global Analysis

Regionally, Europe is the largest market for coffee accounting for 31% of global consumption. However, Asia Pacific is the fastest growing region growing at a CAGR of over 14% during the forecast period. Rising disposable incomes, growth of cafes and quick service restaurants are driving the demand in Asia Pacific region especially in China and India. North America is also a significant market for coffee driven by innovations in brewing techniques and flavor offerings that have boosted coffee culture in the region. Emerging markets of Middle East and Latin America are also showing high growth potential for coffee consumption going forward.

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Money Singh is a seasoned content writer with over four years of experience in the market research sector. Her expertise spans various industries, including food and beverages, biotechnology, chemical and materials, defense and aerospace, consumer goods, etc. (https://www.linkedin.com/in/money-singh-590844163)