The rising prices of coffee beans due to climate change and increasing demand for decaffeinated options are propelling 'alternative coffee' into a new growth category in the domestic and international food and beverage industry. Products made from barley, chicory, and date seeds are being introduced in café menus and as stick beverages, establishing themselves as a key niche market.
According to the Korea Agro-Fisheries & Food Trade Corporation (aT), the price of Arabica beans has surged due to drought conditions in Brazil, the largest producer. As of November last year, the price reached $8,989.70 per ton, a 46.6% increase compared to the previous year, marking the highest level in two years. Although prices have recently settled around $6,100 per ton, ongoing climate crises and logistical uncertainties continue to pose risks to bean supply. The U.S. Department of Agriculture (USDA) also predicts that global coffee stocks will decline for the fifth consecutive year due to poor harvests in major producing countries.
Amid these cost pressures, there is a growing health-conscious demand for managing caffeine intake, leading to increased attention on decaffeinated alternative coffees made from barley, chicory roots, date seeds, and herbs. According to the International Coffee Organization (ICO) and Market Research Future, the global alternative coffee market is projected to grow from $29.3 billion in 2024 to $49.8 billion by 2035, with an average annual growth rate of 5.48%.
In the domestic market, alternative coffee, which was previously limited to a niche audience, is rapidly expanding across various distribution channels, including franchises, stick products, and in-house cafés.
For instance, MegaMGC Coffee's 'Decaf Orzo Latte,' made from organic barley, sold approximately 600,000 cups within a month of its launch, significantly capturing evening and nighttime consumption demand. Tijen's stick product 'Cafe Orzo' also saw sales increase more than tenfold in September compared to its launch month, prompting plans for an expanded product lineup. Maeil Dairy has enhanced consumer convenience with its ready-to-drink 'Barista Rules Orzo Black,' while Lotte Mart has introduced two types of alternative coffee made from roasted chicory roots, branded 'Chico.'
Expansion into business-to-business (B2B) food service and welfare channels is also active. Samsung Welstory has introduced 'Sans,' a brand of alternative coffee made from 12 natural ingredients, including fermented date seeds and chicory roots, to its in-house café, becoming the first in the food service industry to do so. They plan to gradually expand this offering to locations nationwide through a jointly developed powder stick.
In international markets, significant investments are flowing into startups focused on 'beanless coffee' that uses no coffee beans at all, as well as 'mushroom coffee' enhanced with functional mushrooms. U.S. startup Atomo has raised $59 million in funding to operate a large roastery and supply products to over 70 coffee chains, while Boyajee Foods is targeting the B2B market with prices over 40% lower than traditional beans. Brands like Mudwater and Teeccino, which focus on herb and mushroom-based beverages, are also generating millions in annual revenue through large distribution networks.
An industry insider noted, "Alternative coffee is likely to establish itself as a distinct niche category that mitigates the risks of rising bean prices while catering to the demand for decaffeinated and health-conscious options. The key to market growth will be developing products that combine the functionality and storytelling of the ingredients themselves, rather than merely mimicking the taste of coffee."
* This article has been translated by AI.
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