A Farewell to Beans: Coffee Alternatives and the Future of Coffee Consumption

January 2022

The biotech revolution has come to coffee, with “molecular” brands containing no beans already on the market and lab-cultivated brews likely to join them within a few years. While these coffee alternatives are disruptive technologies, they are unlikely to have much in the way of near-term effects. In the longer term however, they will play a major role in mitigating the effects of climate change on the global coffee industry.

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Key Findings

Coffee alternatives will find a place in global coffee consumption but only as a secondary option

Only a small number of highly sustainability-focused consumers are likely to ever actively choose coffee alternatives instead of coffee from beans, but that does not mean they will not eventually play an important role in the industry. Supply gaps from rising demand combining with climate change will create a need for products that can stretch existing supplies, a gap these products are well suited to fill.

Sustainability claims are not enough to overcome the challenges alternatives will find without a “health halo” to benefit from

Much of what is powering the growth of plant-based meat and dairy alternatives is the “health halo”, the idea that plant-based diets are inherently healthier than those with heavy consumption of animal products. Alternatives to coffee will have a much harder time proving to consumers that they are a better option than real coffee without this, particularly as research continues to roll in about the health benefits of regular coffee consumption. Their reliance on sustainability claims will not be enough, even at a time of high consumer interest in sustainable coffee options.

Third-wave trends and emphasis on origins create an immense hurdle for coffee alternatives to overcome

The third wave of coffee has heightened interest in many aspects of quality previously neglected, above all origins. Premium coffee drinkers expect a certain level of story with their coffee. Even the highest-quality coffee alternative will struggle to offer as compelling a narrative even if it can entirely match coffee from beans in taste, creating a real challenge for alternatives on the premium end (which is where they will have to enter the market before they can benefit from scale).

“All of the above” strategies will be needed to deal with the threat of climate change

Coffee faces long-term supply challenges as demand rises consistently but climate change puts pressure on growing areas. Coffee alternatives will eventually play a major role in helping to alleviate this supply shortfall as part of a wider response that will include cultivating more resilient strains, increased use of robusta beans, and exploring non-traditional growing areas.

 

Coffee alternatives: key findings
Introduction: when coffee is not coffee
The analogues: Atomo and Compound
The next wave: lab-cultivated
The real value of these products will be to fill future demand gaps
Third-wave trends will protect coffee beans from serious competition
Coffee alternatives will not benefit from a plant-based “health halo”
Dairy alternatives should be the sustainability priority
The ethics of reducing demand at origin
Conclusion: a mosaic of options to mitigate climate change impacts
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