The Caffeine Paradox: Energy, Anxiety, And the Future of Caffeinated Beverages

June 2021

Caffeinated products is a dynamic growth area in beverages, as the consumer need for effective energy outweighs rising concerns about stress and anxiety. This fundamental tension, however, means that as caffeine consumption grows, increasing attention will need to be paid to the mitigation of caffeine’s negative side-effects.

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Key findings

Caffeine consumption continues to rise worldwide, despite a consumer push for mindfulness

Global consumption of caffeine from beverages is set to continue to grow at a solid pace worldwide for the foreseeable future. Strengthening mindfulness concerns from ever-more stressed consumers have so far done little to slow this, despite the inherent tension between these two trends, as caffeine’s ability to effectively deliver energy consistently proves to be valued more highly than avoiding its negative side-effects.

Mitigation Strategies will be the key to overcoming the tension in rising caffeine levels

While general caffeine guidance from public health authorities exists, most consumers set their own personal levels based on at what point the negative side-effects outweigh the energy benefits, based on their own bodies and needs. Significant opportunity therefore exists in mitigated caffeine solutions that allow for higher energy delivery without increased side-effects.

Increased caffeine consumption will come both from higher consumption of existing categories as well as new ones

Most caffeine growth will come from increasing consumption of the traditionally highly caffeinated categories: coffee, tea and energy drinks. However, many of the more interesting product launches are in non-traditional categories. Caffeinated waters, sports drinks and alcoholic RTDs are becoming more important. These are not adding massive amounts of caffeine in the aggregate, but they are reshaping what caffeinated occasions look like.

Legislation will not directly limit caffeine, but will indirectly influence it

Caffeine has rarely come into the crosshairs of politicians unless there is a perceived threat to children. New regulations in South Korea aimed at protecting school children show that this remains the dominant theme in caffeine legislation. Indirect effects from sugar taxes, however, remain a distinct possibility, not to caffeine as such, but to caffeinated products with high sugar levels (which is many of them).

Introduction

Scope
Key findings

The Caffeine Paradox

Beverage caffeine presents a fundamental paradox
Overview: Navigating the Caffeine Paradox

Caffeine on the Rise

What does global caffeine consumption look like?
Where might there be a potential ceiling on this growth?
Rising anxiety has not translated into drinking less caffeine
The largest long-term threat to caffeine is rising anxiety levels
Conclusion: Caffeine is here to stay, but it needs to be mitigated

New Frontiers of Caffeination

Emergent caffeinated categories break down into two broad groups
New carbonates make coffee and energy drinks into bigger tents
“Hard alternatives” take caffeine and alcohol in a new direction
Caffeinated sports drinks get an extra kick from new research findings
Dancing on (and over) the ceiling: Ultra-caffeinated coffee
How much caffeine are these new categories truly going to add?
Caffeinated waters are the second wave of carbonates replacement
Conclusions: Where is caffeine being added?

Mitigation Strategies

Additional ingredients will be used to modify the effects of caffeine
Nootropics will use caffeine to break into the mainstream
L-theanine’s proven track record will make it a popular additive
Even coffee alternatives find it hard to go entirely decaf
“Energy and so much more”
Conclusions: Mitigation is the way forward

Legislative Possibilities

Three areas are of concern for caffeine from a legislative perspective
Legislation is most likely where children’s consumption is too high
The Gulf States have shown that vulnerability to taxes could be high
A dangerous mix? Alcohol and caffeine in “hard alternatives”

Appendix

Appendix: Caffeine consumption methodology
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