Caffeine is a xanthine alkaloid that naturally occurs in seeds, leaves and fruits of several plants such as, coffee, tea, and guarana among others. Every day millions of people consume caffeine to alleviate fatigue, increase wakefulness, and to improve concentration & focus. It is also found as an ingredient in medicines for headache and migraine.
The global caffeine market is estimated to surpass US$ 23,219.0 Mn by the end of 2027 in terms of revenue, exhibiting a CAGR of 7.4% during the forecast period (2020 to 2027).
The growing coffee consumption globally is one of the driving factors for caffeine market growth. According to the International Coffee Organization (ICO), the global coffee consumption reached to 168.1 million bags in the year 2018-19, representing an average annual growth rate of 2.7% over the last five years. Strongest annual growth rates have been found in Asia Pacific, averaging 3.4% per annum, followed by North America (+2.7%), Africa (+2.3%), and Europe (+2.2%). According to the same source, total exports in 2018-19 amounted for 131.62 million bags, showing an increase of 9.9% compared to 2017.
Growing application of caffeine in pharmaceutical industry is expected to drive the overall market growth. For instance, caffeine is used in wide variety of weight loss pills to boost metabolism. Therefore, increasing demand for weight loss supplements is expected to increase the market growth. For instance, according to Coherent Market Insights analysis report, Americans spend over US$ 2.1 billion on weight loss supplements every year.
Among regions, Asia Pacific held dominant position in the Global Caffeine Market in 2019, accounting for 31.0% market share in terms of revenue, followed by Europe and North America. For example, cosmetic producers in the Asia Pacific region are focused on launching products using natural ingredients, which is expected to drive the demand for caffeine over the forecast period. For instance, in 2017, Dr Wolff (cosmetic producing company) launched its Alpecin sport caffeine shampoo in Hong Kong to help prevent hair loss. The North America region also held a of about 20% share in the overall caffeine market owing to rising caffeine intake. According to Coherent Market Insights, in 2018, over 85% of the U.S. population consumes at least one caffeinated beverage per day.
Figure 1. Global Caffeine Market Revenue Share (%), By Region, 2019
Excessive consumption of caffeine causes side effects such as restlessness, insomnia, headaches, dizziness, dehydration, anxiety etc. These side effects contributed in driving the consumers to look for healthy alternatives that can replace caffeine. Some of the alternatives for caffeine are ginseng, pomegranate juice, maca, baobab, and reishi among others. Availability of such substitutes are expected to hamper the caffeine market growth.
Moreover, players operating in the food ingredients industry are focusing on developing products which can replace caffeine in food products, this is also expected to hamper the market growth of caffeine over the forecast period.
|Base Year:||2019||Market Size in 2019:||US$ 14,879.9 Mn|
|Historical Data for:||2017 and 2018||Forecast Period:||2020 to 2027|
|Forecast Period 2020 to 2027 CAGR:||7.4%||2027 Value Projection:||US$ 23,219.0 Mn|
BASF SE, Spectrum Chemical Manufacturing Corp., Kudos Chemie Limited, AVT Natural Products, Tianjin Zhong’an, Pharmaceutical Company Ltd., Shandong Xinhua Pharma, Aarti Industries Limited, Bakul Group, Taj Pharmaceuticals Limited., and Jilin Shulan Synthetic Pharmaceutical Co. Ltd.
|Restraints & Challenges:||
Players operating in the caffeine market are focused on developing new ingredients using caffeine for end-use industries. This is expected to drive the market growth for caffeine over the forecast period. For instance, In 2019, OmniActive Health Technologies (a U.S.-based natural ingredients’ manufacturer) launched a new ingredient, Xtenergy. The new ingredient is naturally sourced from green coffee beans and is formulated to provide a uniform release of caffeine over several hours. Moreover, the ingredient is formulated to eliminate the bitterness associated with other caffeine supplements, which makes it ideal for powder applications.
Figure 2. Global Caffeine Market – Opportunity Analysis
The increasing consumption of energy drinks is expected to drive the market growth. For instance, in March 2019, the Coca Cola Company launched an energy drink, Coca-Cola Energy in April 2019. The product was launched in Hungary and Spain. This energy drink included caffeine from naturally derived sources, such as vitamin B and guarana extracts.
Figure 3. Global Caffeine Market Revenue Share (%), By Caffeine Source, 2019
On the basis of caffeine source, in 2019, the coffee segment accounted for 41.3% of the revenue share. The segment dominated the overall caffeine market in the year 2019 and is expected to continue its dominance over the forecast period. Coffee plant is the major source of caffeine. The studies by Coherent Market Insights, suggests that, about 125 ml of filtered coffee and 330 ml of energy drinks contain about 85 ml and 80 mg of caffeine respectively.
Global Caffeine Market - Impact of Coronavirus (Covid-19) Pandemic
Caffeine is widely used as an ingredient in food & beverages, pharmaceutical, and personal care industries. Since food is an essential commodity, the demand for caffeine is expected to rise during the pandemic and post-pandemic conditions worldwide. Increased consumption of coffee flavored personal care products is expected to increase the demand of caffeine market during the forecast period. For instance, according to L’Oreal S.A.’s quarterly report published in April 2020, brands such as Kiehl’s, Lancôme, and Helena Rubinstein, which have a large proportion of skincare products outperformed the company’s other luxury brands in the first quarter of 2020. Thus, the skin care brands and focusing on the personal hygiene and cleansing products, this is expected to drive the demand for cosmetic ingredients such as caffeine.
Key players operating in the global caffeine market include BASF SE, Spectrum Chemical Manufacturing Corp., Kudos Chemie Limited, AVT Natural Products, Tianjin Zhong’an, Pharmaceutical Company Ltd., Shandong Xinhua Pharma, Aarti Industries Limited, Bakul Group, Taj Pharmaceuticals Limited., and Jilin Shulan Synthetic Pharmaceutical Co. Ltd.
The National Coffee Data Trends report in 2015, suggests that coffee consumption increases with age, and over 72% of adults over 60 years in the U.S. are classified as coffee drinkers. The report also stated that the workplace consumption of coffee in the U.S. increased from 16% in 2013 to 21% in 2015. Moreover, the report also suggested that the younger demographics consume more coffee away from home.
Caffeine is the most widely consumed psychoactive drug globally. According to the National Consumers League in 2016, caffeine consumption is prevalent in the U.S., with 85% of the population drinking at least one caffeinated beverage regularly. Caffeine is a natural stimulant found in coffee, tea and cocoa plants. Caffeine helps in stimulating the brain and central nervous system, which helps a person to remain alert and prevent the onset of tiredness.
On the other hand, the availability of various alternatives to caffeine is expected to hamper the growth of the market. In 2018, Nektium (Spain-based botanical extract manufacturer) launched a caffeine alternative ingredient, Zynamite, which provides the same benefits as that of caffeine. Zynamite is a sustainable, proprietary standardized extract from the leaves of a selection of Mangifera indica that is the mango tree. Zynamite is believed to help in boosting mental activation, focus & concentration, without the typical side-effects of caffeine such as racing pulse, jitters and anxiety. Moreover, in April 2020, Zynamite was granted U.S. patent for brain enhancing activities by the United States Patent and Trademark Office.
Key features of the study:
“*” marked represents similar segmentation in other categories in the respective section.