Coffee substitutes are gaining increasing popularity in the recent years on the coattails of rising health-conscious demographic and significant decrease in the consumption of coffee. The coffee substitutes are usually without caffeine that are mostly favorable to people who are addicted or allergic to caffeine. Rapid inclination towards veganism across wide range of population is further increasing the demand for coffee substitutes. In addition, growing product development within food substitutes or alternatives space is likely to create growth opportunities for coffee substitutes market. Urbanization and improvement in living standard of the population along with rising health awareness have largely impacted the food and beverage industry which in turn is expected to promote the growth of coffee substitutes market.
Apart from eliminating the caffeine-content, coffee substitutes are good source of inulin, a prebiotic fiber which is known to improve digestive health and promote weight loss. In addition, they contain adequate amount of vitamin B6 and manganese, two nutrients essential for brain health. These benefits are directly translating into the demand for coffee substitutes, thereby boosting its market growth. Leading companies operating in coffee substitutes market are changing their retail strategy and focusing on online stores which is likely to be major sales channel in the near future.
Coffee Substitutes Spoiling the Taste of Conventional Coffee Market
The conventional coffee market has realized moderate growth over the past three years, and is likely to settle much lower by the end of 2018. World coffee exports also reduced over the past few years, settling down to 9.13 Mn coffee bags in October 2016 from 9.31 Mn coffee bags in October 2015. A shift in the focus towards coffee substitutes is one of contributing factors responsible for the significant drop in global coffee consumption. The declining consumption of coffee due to rising health concerns is expected to support the growth of the coffee substitutes market in the upcoming years.
In February 2018, coffee prices declined by 1.2% to 114.2 US cents/lb. Not just prices, but global coffee production also witnessed a sizable shrink in the year 2017/18. The United States Department of Agriculture (USDA) estimates that, world coffee production in the fiscal year 2017/18 will be 600,000 bags lower as compared to that in the previous year. These statistics reflect moderate performance of the global coffee market, though indicate white spaces of opportunities for the global coffee substitutes market.
Coffee Substitutes Riding on the Coattails of the Pervasive ‘Health and Wellness’ Trend
The cut down in the consumption of coffee can be primarily attributed to a radical change in the dietary habits of consumers. The 2015-2020 Dietary Guidelines for Americans (DGA) stated that, consuming high amounts of coffee can prove to be harmful to health, as it can cause headaches, anxiety, or restlessness in less severe cases. A caffeine overdose can cause diarrhea, chest pain, or uncontrollable muscular movements in serious cases. The DGA also states that, consuming caffeine regularly may prove to be dangerous for pregnant and lactating women. Increasing awareness about the harmful effects of caffeine on health and the rising number of health-conscious consumers is causing a major plunge in the consumption of coffee, worldwide.
It is likely to act as a driver for the growth of the global coffee substitutes market in the near future. Coffee substitutes imitate coffee but contain zero amounts of caffeine. Consumers across the globe, who are health-conscious and willing to avoid coffee, are shifting to coffee substitutes. Steady growth of the global coffee substitutes market can identify as a great opportunity for coffee substitute manufacturers to target a larger consumer base. Leading players in the global coffee substitutes market are adopting strategies to spread awareness about the adverse effects of coffee, and health benefits of coffee substitutes to boost sales.
Increasing Prevalence of Food Allergies to Filter Demand for Caffeine
According to the World Allergy Organization (WAO), the allergy prevalence in the world is estimated to be in the range of 10-40%. In 2016, the European Academy of Allergy and Clinical Immunology (EAACI) stated that, over 150 million Europeans suffered from one or more allergic diseases. It also predicts that, by 2025, half of the European population will be suffering from several allergic diseases. Though caffeine allergies are rare as compared to other food allergies, the prevalence of caffeine sensitivity is increasing around the globe. High awareness among consumers about the harsh allergic reactions to coffee is accelerating the development of the global coffee substitutes market.
Organic, Vegan, and Gluten-free: The Use of Unique Ingredients in Coffee Substitutes to Trigger the Trend of Product Innovation
Consumers who are allergic or addicted to caffeine, or health-conscious, are transitioning off coffee and preferring to purchase healthier alternatives. Most manufacturers in the global coffee substitutes market are addressing the increasing consumer needs for following healthy dietary habits. Consumers are becoming highly conscious about the ingredients in food products before making a purchasing decision.
Leading market players such as Teeccino and Ayurvedic Roast Company are using natural and organic ingredients with no artificial additives. Also, by including gluten-free and vegan ingredients, these manufacturers are targeting a larger global audience. Ayurvedic Roast Company makes use of Ayurvedic herbs, such as Brahmi, Shatavari, and Ashwagandha, while manufacturing coffee substitutes. Using herbal ingredients can add a wide range of health benefits to coffee substitutes, which can help market players augment their global sales.
Leveraging Various Sales Channels to Help Market Players in Ensuring Rapid Growth in the Market
Growing health-consciousness among consumers is redefining the future of healthy products in the food retail industry. As consumers are linking their food choices to health, retailers ensure the availability of healthful food products, such as coffee substitutes, in grocery store aisles. The emergence of health-food stores around the world is creating lucrative opportunities for coffee substitute manufacturers. In addition, the growing popularity as well as penetration of e-Commerce has encouraged manufacturers to incorporate highly innovative online marketing strategies. Leading market players in the global coffee substitutes market are benefitting from the popular trend of online shopping. Capturing various business opportunities by building a brand online is one of the latest trends in the global coffee substitutes market.
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