Functional Coffee Market - 2023-2030

Functional Coffee Market - 2023-2030

Global Functional Coffee Market reached US$ 4.01 billion in 2022 and is expected to reach US$ 5.1 billion by 2030, growing with a CAGR of 3.1% during the forecast period 2023-2030.

Coffee is used as one of the most essential beverage products globally. The growing demand for healthy and convenient soft drinks alternative products and increasing demand for healthy beverages positively drive the functional coffee market growth. The rising popularity of specialty coffee and the increasing demand for unique and premium coffee experiences create opportunities for various innovative coffee products.

The increasing economic growth and cost of living of people is driving the trend of coffee consumption in all regions. The growing awareness of the health benefits associated with functional coffee consumption plays a significant role in the expansion of the market. Functional beverages are available in various types in multiple categories to provide consumers with additional benefits.

The high demand for natural and organic products is driving the expansion of organic functional coffee into the market. The product introductions combining the functional benefits of coffee in its organic nature positively drive the market growth. For instance, in September 2022, Nutrocore, a premium USDA Organic and non-GMO certified grown coffee supplier, updated their product offering with the introduction of cinnamon turmeric organic coffee in the market.

Dynamics

Increasing Coffee Consumption

Coffee is a widely used and preferred beverage at the global level. According to the International Coffee Organization, world coffee production reached 168.5 million bags in the coffee year 2021-22 and is expected to reach 171.3 million bags in 2022-23. Further, the organization also reported that world coffee consumption increased by 4.2 % to 175.6 million bags in 2021-2022.

With the increasing consumer shift towards health and wellness trends, the demand for nutritional products is rapidly increasing. According to the International Food Information Council Foundation research, 47% of consumers prefer food products with additional nutrients. The potential beneficial properties of the functional coffee help in meeting the required consumer needs, driving its market growth.

Innovative Product Introductions

With increasing health consciousness among consumers, there is a high demand for health-promoting products in the market. Consumers are actively adopting the use of innovative and health-promoting products to maintain a healthy lifestyle. Taking this into consideration, manufacturers are also introducing new products into the market.

In June 2022, Cecors, Inc., a U.S.-based manufacturer and distributor of healthcare products, announced the introduction of a premium functional mushroom-infused coffee line into the market. The line includes lion mane, turkey tail, chaga, reishi, cordyceps, and maitake varieties. The product is claimed prepared from 100% fair-trade organic Arabica coffee beans. The nutrient and antioxidant-rich properties of coffee beans with the additional properties of the mushrooms add value to the product.

Similarly, in June 2021, Laird Superfood Company expanded its functional coffee range with the launch of a new product Soothe Coffee, a product infused with botanicals like cardamon, marshmallow root, and blueberries. Further, in October 2021, REBBL, a functional beverage brand released REBBL stacked coffee product that is formulated with a combination of caffeine and green tea's nootropic L-Theanine. The product claimed to reduce anxiety levels and promote relaxation from daily life stress.

High Cost of the Functional Coffee

The functional coffee market is majorly restrained by its high-cost nature. Climate change is one major region affecting the availability and price of the coffee bean. In addition, the coffee bean processing and the trade costs also add to the increased cost of the products. In addition to regular coffee beans, functional coffee is incorporated with various health and nutritional ingredients that support better health conditions. Functional coffee is costlier compared to regular coffee due to the incorporation of functional ingredients.

The infusion of the additional ingredients for the production of functional coffee, adds more production costs to the manufacturer. Various botanicals, vitamins, probiotics and other functional ingredients increase the product price. Further, the additional processing required for this coffee production increases its price for price-sensitive customers, affecting the market growth negatively.

Segment Analysisn

The global functional coffee market is segmented based on type, category, distribution channel and region.

High Need and Demand for Protein-Rich Products

The global functional coffee market is segmented based on category into full-fat coffee, protein coffee, probiotic coffee and antioxidant coffee. The protein coffee segment of the global functional coffee market accounted for the largest share due to the high demand for a protein-rich diet among health-conscious consumers. Protein is considered a part of a healthy diet needed for bodybuilding and repair.

Consumers are seeking protein-rich products in their regular products to maintain a healthy lifestyle. The hectic lifestyle and limited time left them with alternative protein sources rather than only depending on traditional protein source products. With the high use of coffee in the daily diet routine, manufacturers are producing coffee products induced with protein to meet their daily nutritional requirements.

Mnaufacturers are developing new products to attract health-conscious consumers. For instance, in August 2022, Herbalife Nutrition introduced a new product into thier product offering with the launch of its first functional coffee mix, High Protein Premix Coffee. The product is claimed to provide high-protein by reducing their sugar, fat and calorie intake fat.

Geographical Penetration

Increasing Coffee Drinkers in North America

North America dominated the global functional coffee market. Rapidly improving coffee culture in this region added up with the increasing health consciousness of people boosted the expansion of functional coffee that meets the consumer requirements by providing a coffee feel and health benefits. High demand for health-promoting coffee contributes to product diversification in this region.

The region has a high number of coffee customers. According to the National Coffee Association, more than any other beverage, 66% of Americans drink coffee each day as of March 2022. The report evaluated that coffee consumption in US has reached a two-decade high. Additionally, the report shows that 43% of coffee drinkers prefer speciality coffee made with high-quality ingredients.

With the increasing socialisation effect and also the increase in the coffee shops and cafe culture, the demand for coffee catchups has increased massively in this region. The Spring 2022 National Coffee Data Trends reported that there is an increase of 8% of Americans who have increased their coffee consumption away from home. Further, according to the National Coffee Data Trends report, in U.S. there is a total of 20% increase in consumer visits and coffee consumption in coffee shops.

Competitive Landscape

The major global players in the market include Bulletproof 360, Inc., SKLEW BIOTECH, Kerry Group plc, Super Coffee, TATA Coffee, Strauss Group Ltd., Royal Cup Coffee, Farmer Brothers, Laird Superfood and Om Mushroom Superfood.

COVID-19 Impact Analysis

The COVID-19 pandemic has moderate impact on the functional coffee market. Just like all other industries in the food and beverage sector, the functional coffee market also faced challenges during the pandemic situation. The massive attack of the pandemic and sudden lockdown conditions caused the functional coffee industry to witness a lot of drawbacks.

The strict government lockdown regulations caused a halt in supply chain activities which destroyed the souring of various materials and distribution of end product. The temporary shutdown of the manufacturing units also had a negative influence on the market. In addition, the pandemic also caused the shutdown of cafes and coffee shops which caused reduced sales of the product.

The pandemic increased consumer focus on the adoption of healthy products to promote better health-supporting conditions. To attract more consumer, manufacturing also increased their production developments with the infusion of health-promoting ingredients. The high promotional activities of the natural botanicals and vitamins influenced the market sales.

Russia- Ukraine War Impact

The war between Russia and Ukraine had a massive impact on almost every kind of market, including the global functional coffee market. The global demand-supply chain was highly disrupted. Market players and industrial experts faced challenges due to interrupted global trade activities. The manufacturers faced difficulties in acquiring necessary resources and providing customers with the required supply analysis, increasing the price of the market globally.

By Type
• Whole Bean
• Ground Coffee
• RTD Coffee

By Category
• Full-Fat Coffee
• Protein Coffee
• Probiotic Coffee
• Antioxidant Coffee
• Other

By Distribution Channel
• Supermarket/Hypermarket
• Cafes and Foodservice
• Convenience Stores
• Online Stores
• Other

By Region
• North America
U.S.
Canada
Mexico
• Europe
Germany
UK
France
Italy
Russia
Rest of Europe
• South America
Brazil
Argentina
Rest of South America
• Asia-Pacific
China
India
Japan
Australia
Rest of Asia-Pacific
• Middle East and Africa

Key Developments
• In August 2022, US-based Brewpoint Coffee introduced cannabidiol-infused coffee. The product is infused with CBD's calming effects providing better product availability for the consumers seeking jitter-free beverage options.
• In October 2021, REBBL, a functional beverage brand released REBBL stacked coffee into the market. This ready-to-drink cold brew product is claimed to provide the required energy and immune support to the body.
• In June 2021, Laird Superfood Company introduced a variety of functional coffee blends such as Boost coffee into the market. The product is highlighted for providing 15% of an individual's daily amount of vitamin D.

Why Purchase the Report?
• To visualize the global functional coffee market segmentation based on type, category, distribution channel and region, as well as understand key commercial assets and players.
• Identify commercial opportunities by analyzing trends and co-development.
• Excel data sheet with numerous data points of functional coffee market-level with all segments.
• PDF report consists of a comprehensive analysis after exhaustive qualitative interviews and an in-depth study.
• Product mapping available as excel consisting of key products of all the major players.

The global functional coffee market report would provide approximately 61 tables, 62 figures and 191 Pages.

Target Audience 2023
• Manufacturers/ Buyers
• Industry Investors/Investment Bankers
• Research Professionals
• Emerging Companies