CAFFEINE MARKET ANALYSIS

The global caffeine market is estimated to surpass US$ 28.52 Bn by the end of 2030 in terms of revenue, exhibiting a CAGR of 6.7% during the forecast period (2023 to 2030).

Drivers

• The growing demand for caffeine-flavored food products & cosmetic items

The growing coffee consumption globally is one of the driving factors for caffeine market growth. According to the International Coffee Organization (ICO), global coffee consumption reached 167.23 million bags in the year 2020-21, representing an average annual growth rate of 1.9% over the last year. The strongest annual growth rates have been found in Asia Pacific averaging followed by North America, Africa, and Europe According to the same source, total exports in 2020-21 amounted to 131.62 million bags, showing an increase of 9.9% compared to 2019.

• The increasing use of caffeine in the pharmaceutical and personal care industries

Growing application of caffeine in the pharmaceutical industry is expected to drive the overall market growth. For instance, caffeine is used in a 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 the Coherent Market Insights analysis report, Americans spend over US$ 2.1 billion on weight loss supplements every year.

Among regions, Asia Pacific held a dominant position in the Global Caffeine Market in 2022, 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, according to Coherent Market Insights, in 2022, over 85% of the U.S. population consumed at least one caffeinated beverage per day.

Market Restraints

• Excessive consumption is problematic.

More consumption of caffeine causes side effects such as restlessness, insomnia, headaches, dizziness, dehydration, anxiety, etc. These side effects contributed to driving 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. The availability of such substitutes is expected to hamper the caffeine market growth.

Moreover, players operating in the food ingredients industry are focusing on developing products that can replace caffeine in food products, this is also expected to hamper the market growth of caffeine over the forecast period.

Market Opportunities

• Expanding interest for caffeinated drinks

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, according to L'Oreal S.A.'s quarterly report released in April 2020, in the first quarter of 2020, skincare-focused brands such as Kiehl's, Lancôme, and Helena Rubinstein outperformed the company's other premium brands. Caffeine is mostly derived from cocoa beans in personal care products. It has already achieved cult status in the Indian D2C cosmetics business, selling over ten million items. The 'world's first club,' which introduced the world's first coffee bean-shaped swimming bar in late 2020 (patent pending in India), is no stranger to the business. Demand for cosmetic chemicals such as caffeine is expected to rise as a result of skincare companies focusing on personal hygiene and cleansing products.

Market Trends

Caffeine Anhydrous Products Are Becoming More Popular in Supplement Stores

Anhydrous caffeine is a dehydrated and processed form of caffeine that is commonly seen in powder or granular form. Caffeine anhydrous is also included in a variety of supplements, including pre-workout powders and pills.

Anhydrous caffeine has grown in popularity as a weight loss and athletic performance supplement over the years. Caffeine anhydrous allows you to consume more caffeine without ingesting big volumes of tea or coffee.

Market segment

Global Caffeine Market by Caffeine Source in 2022

On the basis of caffeine source, in 2022, the coffee segment accounted for 41.3% of the revenue share. The segment dominated the overall caffeine market in the year 2022 and is expected to continue its dominance over the forecast period. The coffee plant is a major source of caffeine. The studies by Coherent Market Insights, suggest that about 125 ml of filtered coffee and 330 ml of energy drinks contain about 85 ml and 80 mg of caffeine respectively.

Figure 1: Global Caffeine Market by Caffeine Source in 2022

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Global Caffeine Market by Region in 2022

Asia pacific held dominant position in the global Caffeine Market in 2022, accounting for 37% share in terms of value, followed by Europe, North America, Latin America, and Middle East, and Africa respectively.

Figure 2: Global Caffeine Market by Region in 2022

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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 expect to rise during the pandemic and post-pandemic conditions worldwide. Increased consumption of coffee-flavored personal care products is expected to increase the demand for the 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 skincare brands focusing on personal hygiene and cleansing products are expected to drive the demand for cosmetic ingredients such as caffeine.

Competitive Section

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.

Key development

• In May 2021, Caffeine Anhydrous, Inc. an manufacture expanded its production capacity by 50% to meet the rising demand for the product. The company has also planned to expand its product portfolio by launching new products in the market.
• In January 2022, Starbucks announced the release of its first ready-to-drink (RTD) beverage made from naturally occurring caffeine found in coffee fruit and the immune-boosting antioxidant vitamin C.
• In June 2022, Kudos, a manufacturing facility close to Chandigarh and produces specialty chemicals used as food, beverage, and pharmaceutical ingredients. Acquisition of UPL to offer various value-added products to its customers having synergy with its existing business.

*Definition: 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 improve concentration & focus. It is also found as an ingredient in medicines for headache and migraine.