Specialty Coffee Market Size, Share & Trends Analysis Report By Age Group (18-24, 25-39, 40-59, Above 60), By Application, By Distribution Channel, By Region, And Segment Forecasts, 2023 - 2030

Specialty Coffee Market Size & Trends

The global specialty coffee market size was estimated at USD 21,916.2 million in 2022 and is expected to grow at a compound annual growth rate (CAGR) of 11.3% from 2023 to 2030. The demand for specialty coffee has been experiencing significant growth in recent years, with numerous factors contributing to this growing interest. Among these factors are changing consumer preferences, a focus on sustainability, and the influence of millennials, who demonstrate a strong affinity for coffee consumption. Some of the latest trends in the global specialty coffee market include the growing number of coffee shops, Ready-To-Drink (RTD) specialty coffee, and cold brew & nitro coffee. Moreover, the increasing demand for specialty coffee varieties is proving to be opportunistic for market vendors.

As a result, vendors are focusing on product diversification, the introduction of new flavors, and brand extensions to increase earnings. For instance, in September 2022, CoffeeB, a Swiss coffee brand, developed a new type of compressed coffee balls, which it denotes as "the next generation of single-serve coffee". It uses innovative seaweed-based material wrappers instead of aluminum or plastic ones to create a capsule that retains its shape.

The consumption of coffee in developing countries such as China, India, and Brazil has also been increasing at a significant rate. For instance, in August 2021, the Caffeine Baar introduced its sophisticated 'Elements 2021' Collection, featuring three innovative packaged specialty coffee beans; Carbonic Maceration, Anaerobic Fermentation, and Orange Fermentation. Drawing inspiration from the wine industry, each coffee variety in the collection offers a unique fusion of aromas and flavors, presenting an elevated, artisanal coffee experience. Hence, the increasing consumption of coffee worldwide is expected to drive the demand for specialty coffee during the forecast period.

The COVID-19 pandemic led to widespread disruptions in the coffee supply chain, including labor shortages, transportation delays, and logistical challenges. The closure of cafes, restaurants, and other out-of-home consumption venues resulted in a decline in demand for coffee in these channels. Additionally, the economic downturn and the ensuing financial uncertainty prompted consumers to reduce discretionary spending, which adversely affected the specialty coffee market.

Despite the challenges faced by the coffee market during the pandemic, certain positive trends have emerged. The shift to remote work and the closure of cafes and restaurants led to an increase in at-home coffee consumption, driving up sales of coffee beans, grounds, and capsules. As a result, retail coffee sales experienced growth, particularly in the e-commerce channel, where consumers turned to online shopping for convenience and safety. This shift also led to increased demand for home brewing equipment and RTD coffee products, as consumers sought to replicate the coffee shop experience at home.

Age Group Insights

The age group between 18-24 dominated the age group segment with a share of 32.7% in 2022. The growing popularity of specialty coffee among this category is attributed to the growing interest in food and beverage, value of authenticity and unique experiences, focus on health and sustainability, and the impact of social media and digital technology.

The age group between 25-39 is estimated to expand at a CAGR of about 12.0% during the forecast period. This segment has witnessed immense popularity over the past few years. As people of this age bracket are more open to experimenting with new tastes, brewing methods, and coffee origins, which specialty coffee readily provides. Moreover, specialty coffee also offers a wide range of customization options, allowing individuals to tailor their coffee experience to their preferences, making it more appealing to this demographic.

Application Insights

The commercial segment dominated the application segment with a share of 74.3% in 2022. Commercial specialty coffee chains have a wider network of stores, allowing them to reach a larger number of consumers across various regions. In addition, the growing awareness and appreciation for higher-quality coffee have also led to an increase in demand for specialty coffee. This drives commercial businesses, such as coffee shops and restaurants, to offer specialty coffee options to attract customers and stay competitive in the market.

The home application segment is estimated to expand at a CAGR of 11.8% during the forecast period. The segment growth is attributed to the increasing availability and affordability of specialty coffee brewing equipment, such as espresso machines, pour-over setups, and high-quality grinders that have made it easier for home consumers to replicate the cafe experience at home.

Distribution Channel Insights

The online distribution channel dominated the distribution channel segment with a share of 44.4% in 2022 and is estimated to expand at highest CAGR of 12.3% during the forecast period. The shift in consumer preference toward online channels is due to the convenience such as high discounts, availability of a diverse range of products on a single platform, easy payment methods, on-door delivery, and others. Additionally, online retailers often carry a large variety of specialty coffees with different flavors and brands, such as blue tokai, ARAKU coffee, Grey Soul, and Coffeeza that may not be available at traditional brick-and-mortar stores. Furthermore, it also allows consumers to choose the product that best fits their needs.

The convenience stores distribution channel segment is estimated to expand at a significant CAGR of 10.8% during the forecast period. Convenience stores are often located in easily accessible areas, such as neighborhoods or near workplaces, making it simple for customers to pick up their preferred specialty coffee on the go. Furthermore, convenience stores occasionally offer in-store tasting or sampling events, which give customers a chance to try specialty coffee before committing to a purchase. This can lead to increased interest and sales of specialty coffee products.

Regional Insights

Europe dominated the market with a share of 30.8% in 2022. The rising interest in premium specialty coffee varieties has contributed significantly to the region's growth. According to CBI,consumption at specialized coffee shops serving primarily high-quality coffees is increasing rapidly in Western Europe. The number of coffee shops providing specialty coffee in Western Europe increased by 18% between 2018 and 2020, reaching 24,290 in 2020.  Additionally, factors such as the expansion of mainstream coffee players, increased disposable incomes, and a more sophisticated coffee culture are expected to further enhance the specialty coffee market growth in this region.

Asia Pacific is expected to witness a CAGR of 13.6% from 2023 to 2030. The growing popularity of pickup shops, rapid urbanization and the adoption of modern lifestyles in the region have led to an increased interest in western coffee culture, which includes the consumption of specialty coffee.

Key Companies & Market Share Insights

The industry is characterized by the presence of some large multinational and regional companies. Leading manufacturers hold a significant market share across the globe. Companies have been implementing various expansion strategies such as mergers & acquisitions, and capacity expansions, to stay competitive.

For instance, in September 2021, Louis Dreyfus Company Asia Pte. Ltd signed a joint venture agreement with Zephyr Japan, a Japanese specialty coffee retailer that provides premium coffees. With this joint venture, the company aims for specialty business expansion, positioning it to increase premium coffee flows into Japan and other East Asian markets.

In January 2022, Intelligentsia Coffee and Keurig Dr Pepper Inc. have partnered to launch Intelligentsia in K-Cup pods compatible with Keurig brewing systems. The partnership aims to provide exceptional coffee quality through innovation, incorporating new features like MultiStream™ technology to thoroughly saturate grounds and extract full flavor and aroma. These developments ensure that artisanal brands like Intelligentsia will deliver the high-quality taste that consumers expect from every Keurig brew. Some of the prominent players in the global specialty coffee market include:

• Starbucks Coffee Company

• F. Gaviña & Sons, Inc. (Don Francisco’s Coffee)

• Barista Coffee Company Limited

• Coffee Day Enterprises Ltd.

• Blue Bottle Coffee, Inc.

• Eight O’Clock Coffee Company

• Keurig Green Mountain Inc.,

• Costa Coffee

• The J.M. Smucker Company

• Inspire Brands (DD IP Holder LLC)

Specialty Coffee Market Report Scope

Global Specialty Coffee Market Report Segmentation

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends and opportunities in each of the sub-segments from 2018 to 2030. For this study, Grand View Research has segmented the global specialty coffee market report based on age group, application, distribution channel, and region:

• Age Group Outlook (Revenue, USD Million, 2018 - 2030)

  • 18-24

  • 25-39

  • 40-59

  • Above 60

• Application Outlook (Revenue, USD Million, 2018 - 2030)

  • Home

  • Commercial

• Distribution Channel Outlook (Revenue, USD Million, 2018 - 2030)

  • Supermarkets/Hypermarkets

  • Convenience stores

  • Online

• Regional Outlook (Revenue, USD Million, 2018 - 2030)

  • North America

    • U.S.

    • Canada

  • Europe

    • UK

    • Germany

    • France

    • Italy

    • Spain

  • Asia Pacific

    • China

    • India

    • Japan

    • South Korea

  • Latin America

    • Brazil

    • Mexico

  • Middle East & Africa

    • UAE

    • South Africa