Global coffee market size expected to expand to $166.39bn by 2029
By Felicia Nwosu
A recent market forecast on the global coffee market size revealed that it is expected to reach USD 166.39 billion by 2029, growing at a CAGR of 4.72% during the forecast period. It was formerly projected at USD 132.13 billion in 2024.
This was revealed in a recent research conducted by Mordor Intelligence aimed at helping consumers take action that will inspire them in making decisions and, at the same time, challenge the industry to harness its power of innovation to align with the ever-increasing change in consumption.
Looking backward, the data indicated that the output for 2023/24 is expected to increase by 5.8% to 178.0 million bags, with the Arabicas’ output rising to 102.2 million bags and the Robustas’ increasing to 75.8 million bags.
When compared globally, the United States generated the highest revenue in the Coffee market with US$11,440m in 2024, while it was the world’s top coffee importer, followed by Germany, France, and Italy in 2021. On the other hand, leading exporters in the same year were Brazil, Switzerland, and Colombia.
Other notable players dominating the coffee market are countries in the Asia-Pacific region, which are known to have been traditional consumers of tea. However, the increased penetration of instant coffee in markets such as India has boosted the overall sales of the coffee category. Japan is the fifth-largest importer of coffee and coffee products. The report showed that the growing affinity for drinking coffee and the surge in willingness to try new aromas have boosted the demand for coffee in the region.
The coffee market is highly competitive and is dominated by global key players like Nestlé S.A., Kraft Heinz Company, JAB Holding Company, Luigi Lavazza S.p.A., and Massimo Zanetti Beverage Group., J.M. Smucker, Starbucks, Keurig Green Mountain, Caribou Coffee, Dunkin and Peet’s Coffee & Tea, etc. In 2021, the global top five players have a share approximately in terms of revenue.
Among the countries leading in coffee consumption, Finland is registered as the country that drinks the most coffee. It said Fins consume a whopping 12 kilograms (about 26 pounds) of coffee per capita annually, making Finland the biggest consumer of coffee on earth. Coffee is so ingrained into everyday life in Finland that, per Finnish labor laws, workers are granted two 10-15 minute coffee breaks a day.
Meanwhile, Britain sits in 44th place, despite its relatively small population; Britain has seen a significant rise in coffee consumption, overtaking tea as the nation’s preferred drink since 2022.
Predicting the future of coffee cultivation, the analysis pointed out that it is under serious threat, with researchers predicting that by 2050, coffee production could be reduced by up to 50% due to factors like disease, pests, drought, and rising temperatures.
Revealing that the demand for specialty coffee has grown significantly in recent years due to changing consumer preferences and a focus on sustainability, it claimed that Starbucks is the largest coffee chain worldwide, bringing in annual revenue of $32.3 billion (2022). This revenue increased to $35 billion as of June 2023.
Stating on the lucrative nature of the product and the reason behind coffee business failure, the report said that the reason most coffee businesses fail include inadequate promotion, falling behind industry trends, low-quality equipment and ingredients, lack of knowledge, underfunding, mismanagement, poor location, and unreliable suppliers.
Across the markets, the research body observed some striking characteristics driving the demand among several consumers. It noted that aside from the impact of the increasing disposable income coupled with urbanization, that the primary factor contributing to the growth of the coffee market, came from the realization of consumers of the various health benefits of consuming coffee, such as reducing the risk of diabetes, burning fat, and consuming high energy from caffeine spikes.
According to Mordor Intelligence, another instrumental force driving the market growth is the quest towards more organic or plant-based coffee to maintain a healthy lifestyle. This, alongside consumers’ preferences is one of the key players that have propelled brands to constantly engage in product innovations to maintain a stronger foothold in the market.
This ever-changing shift in consumers’ consumption pattern resulted in the unveiling of a range of Nescafé lattes, including coffee capsules crafted with plant-based ingredients, to meet consumers’ rapidly growing interest in plant-based food by Nestle Japan in 2021.
The gathering also mentioned other significant factors influencing the market growth to include busy lifestyles, leading to coffee chains becoming more popular among customers who enjoy their coffee on the go.
Its data distribution pointed to the fact that currently, consumers demand premium products that emphasize quality, an indication that they are attracted to top-notch coffee houses that offer the best coffee quality, which is a significant factor for repeated visits. Technology innovations, safety measures, and machine-based food processing units are projected to play an essential role in the demand for coffee over the coming years.
Coffee consumers are increasingly looking for ethical products from a social and ecological point of view. Organic certification in coffee is gaining popularity in world consumer markets, especially in Asia and Europe. The common belief among consumers about organically produced products being less exposed to synthetic chemicals and pesticides is boosting the trend for organic certified coffee.
The coffee market is also changing by churning out new varieties. It revealed that innovation key to the “Fourth Wave” of coffee consumption has made the coffee drinking experience more accessible and easier to drink than ever before, as beyond regular brewed and hot specialty coffee, new categories in iced coffee, frozen blended coffees and ready-to-drink platforms in cans are emerging to meet the needs of today’s consumers.