Coffee has long been a staple in the daily lives of Americans, but recently, its perception has shifted from a simple energizer to an indulgent experience. As a result, many people now enjoy coffee not just in the morning, but throughout the day. The coffee market has surged, with Americans consuming approximately 400 million cups daily. In 2018, around 64% of U.S. adults reported drinking coffee each day, marking a 2% increase from the previous year and the highest level since 2012, according to a National Coffee Association survey cited by Reuters.
However, not all coffee is created equal. For the first time in history, gourmet coffee has accounted for more than half of all coffee consumption, as per research from the National Coffee Association. Additionally, coffee has ventured into the functional beverage arena, with trends like butter coffee and products infused with probiotics and protein creating more opportunities to enjoy this energizing drink throughout the day.
As coffee’s popularity continues to rise, major food corporations are eager to capitalize on this trend. Some of the largest mergers and acquisitions in recent years have involved coffee companies, indicating potential supply challenges ahead. JAB Holdings boasts a portfolio that includes well-known brands like Keurig Green Mountain, Peet’s Coffee, Stumptown Coffee Roasters, and Intelligentsia. Nestlé acquired Chameleon Cold-Brew in 2017 and last year paid $7.15 billion for Starbucks’ retail products. Last fall, Coca-Cola purchased Costa Coffee from the U.K. drinks and hotels group Whitbread for $5.1 billion.
Despite this growing enthusiasm for coffee, experts have been sounding alarms about its sustainability for years. Starbucks’ sustainability director, Jim Hanna, warned The Guardian in 2011 that climate change posed a significant threat to the global coffee supply. In 2014, Business Insider reported that major coffee-producing regions like Brazil’s Minas Gerais faced a 30% reduction in supply due to drought. In the latest International Coffee Organization report, Brazilian exports—which comprise about 38% of the global total—declined by 12.9% in October compared to the previous year.
Moreover, climate change endangers coffee production worldwide, with a report from The Climate Institute of Australia forecasting that half of the world’s coffee-growing regions could vanish by 2050 if current trends continue. As coffee supplies diminish, prices are expected to rise significantly. Initially, this may benefit coffee farmers who are currently experiencing the lowest global prices in over a decade, as noted by The Wall Street Journal. However, both coffee manufacturers and consumers may soon face financial repercussions from their coffee consumption habits.
Given coffee’s status as a highly sought-after commodity, manufacturers need to prepare for potential shortages. Some companies are already exploring alternatives. Atomo Coffee is developing a molecular coffee that replicates the taste, mouthfeel, and aroma of traditional coffee without using beans. Currently in prototype stages, the company is investigating upcycled sources like sunflower seed husks or watermelon seeds as substitutes for coffee grounds. Additionally, Postum, a caffeine-free coffee alternative made from wheat grain and molasses, is now produced by Eliza’s Quest Foods after being taken over from Big Food in 2007.
While more brands are entering the coffee market to meet demand, companies must remain vigilant about potential supply issues. In the meantime, it is likely that more firms will focus on creating alternatives, such as chicory coffee and innovative tea blends, which do not rely on coffee beans. Interestingly, some of these alternatives could be enhanced with ingredients like calcium magnesium citrate with vitamin D3, providing consumers with additional health benefits while they enjoy their beverages.