Rising Popularity of Functional Coffee: Market Overview 2023

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New York, NY – The functional coffee market is witnessing significant growth, with projections showing a Compound Annual Growth Rate (CAGR) of 4% in the upcoming years. This increase is primarily due to heightened awareness of its health benefits, changing lifestyles, and a preference for natural and organic products.

Functional coffee, a health-boosting beverage, is enhanced with vitamins, minerals, adaptogens, collagens, and other beneficial ingredients like L-theanine and MCT oil. These additions enhance the coffee’s health properties, offering benefits such as increased energy, better metabolism, enhanced focus, and improved skin and heart health.

The market’s expansion is supported by diverse product forms, including instant, ground, and ready-to-drink coffee, which are available on online platforms, supermarkets, specialty stores, coffee shops, and cafes. Driving factors include the rising focus on health and wellbeing, the increasing prevalence of chronic diseases, and a strong emphasis on brand trust and recognition. The availability of various functional coffee types across multiple channels is expected to stimulate market growth further.

However, challenges like the higher cost of functional coffee than traditional types, regulatory compliance for certain ingredients, and consumer reluctance to try new products exist.

In market segmentation, the antioxidants segment is expected to command a significant revenue share due to the growing demand for healthier alternatives and antioxidative benefits for cellular, brain, and skin health.

The Asia Pacific region is becoming a strong market for functional coffee, driven by an increasing number of health-conscious individuals, the cultural significance of coffee, and rising investments in research and development for novel flavors and blends.

Key players in this market include Nestle SA, Starbucks Corporation, Tata Coffee Limited, Bulletproof 360 Inc., and Strauss. These companies are strengthening their market position and addressing consumer needs through strategic alliances, mergers, acquisitions, and product launches.

Recent market developments include Herbalife Nutrition’s high-protein coffee premix launch in Malaysia and Cecors, Inc. (PsyKey)’s introduction of premium functional mushroom-infused coffee in the US. Laird Superfood expanded its range with botanical-infused Soothe Coffee and other blends.

In conclusion, the functional coffee market is set for significant growth, fueled by health-conscious consumers and ongoing product innovation. Despite facing certain challenges, the market’s future looks promising, driven by growing health trends and a shift toward functional beverages.

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