What’s next for coffee?

Published on May 27, 2025

Do you drink a lot of coffee? It is likely that a great number of you will be drinking a cup when you’re reading this. If you are like me (and most people), you don’t really consider too much your drink, its origin, its impact or the future supply of it. However, a lot of things are brewing behind the scene.

Why Your Morning Brew Is Getting Expensive?

There is now a handful of commodities, notably eggs and cocoa (which we covered in this recent insight) ,that are seeing their prices rise due to environmental shocks.

The chart below is not the one for Bitcoin but rather for coffee. Prices have increased quite dramatically over the past couple of years to reach new highs at two to three times their “usual” levels.

While some of the reasons for this price hike are linked to to temporary events, there are at least five factors that are making the search for alternatives even more relevant:

Unpredictable prices in the future: these “temporary” climate events will be getting increasingly more likely in the years ahead. We can then expect to have prices swinging even more widely than what we are seeing now.
Reduced production: the land area suitable for the production of top-quality coffee could be reduced by up to 50% by 2050.
Climate impact: per kg of the final product, coffee is a highly greenhouse emitting product (higher emissions than cheese, for example).
Rising demand in Asia: while demand is rising in many parts of the world which were not traditional coffee drinkers (taking a stroll in the streets of Tokyo, you can see more high-end coffee shops than in most western cities while coffee has become ubiquitous in any restaurant or corner shop). Similarly, in countries like China and Indonesia, coffee shop chains are popping up extremely fast. This adds even more strain to the limited demand.
Conflicting signals in the West: as coffee culture gets more entrenched globally, we observe a rise of concerns about the health impact of coffee, notably as we age. If you look at the two graphs below, they show a steady rise of consumers asking about coffee alternatives (as they are for caffeine effects), while recent trends such as mushroom coffee or adaptogens are skyrocketing.

How FoodTech Innovators Are Rewriting Coffee’s Future

All the signals mentioned above point towards a single direction: a strong need for both alternatives and ways to strengthen the current coffee supply chain. The size of the market, the strength of the market pull, the climate imperative, and the current price hike all explain why entrepreneurs and investors are eager to bet on this topic.

As shown in DigitalFoodLab’s hype curve above, we can identify 8 innovation ecosystems, which are as many solutions for the future of coffee without even considering alternatives like tea or market innovation, such as cold brew. Among them, the most noticeable are:

DTC brands and marketplaces. In the coffee business, they are often here to combine ethical sourcing of coffee beans with the discovery of new tastes (which can be their own or those of multiple small roasters).

Traditional alternative products like chicory have been known for decades, but they suffer from a lack of taste and “effect”. We observed a small wave of innovation in this category but with only a very small economic impact.

Coffee alternatives with health benefits: these products target health-focused consumers (a growing demographic) with products often containing the same combination of adaptogens (mushrooms such as Lion’s Mane or roots such as ashwagandha), which can help users better focus without the negative effects of caffeine. Here, leading brands such as Mud\Wtr already make very significant revenue (in the hundreds of millions). This explains the wave of copycats that we observe all over the world.

Plant-based substitutes are companies seeking to create a product that really tastes like coffee. This group consists of the startups that are raising the biggest amounts of money ($300M+). To create convincing substitutes, most companies combine the use of upcycled ingredients with fermentation.

Plant-cell culture (cellular agriculture for plants). The high prices and limited quantity required, at least compared to meat, are making cocoa highly appealing as an application for cellular agriculture.

Genetically edited crops: some large players are seeking to make coffee culture more sustainable and durable (notably by enabling the growth of Arabica in less demanding areas).

Not only a startup game

As for cocoa, the number of large players already involved in this space through partnerships and investments is impressive. Looking at it shows how dire the situation of the supply chain is and how much there is a need for a solution. Among multiple examples, and to complement our recent insight on the growing involvement of Japanese AgriFood companies in FoodTech:

Suntory, a Japanese beverage giant, invested in Atomo Coffee (plant-based substitute) in 2023
Meiji (a Japanese food company) invested in California Cultured (plant-cell cacao and coffee).

What’s next?

As shown in the graph above, not all these solutions have the same potential. Some of them will probably remain marginal, while others will have a very significant impact. In our analysis, the two areas with the most relevance are the alternatives with health benefits (aligning with the already huge “healthy ageing” trend) and plant-cell culture.

This emerging category of coffee alternatives not only responds to sustainability challenges but also meets the increasing consumer demand for sustainability and health-conscious food & beverage products. At DigitalFoodLab, we help forward-looking companies identify and leverage their innovation ecosystem. Interested in shaping your coffee strategy for the future? Reach out today.