Industry Background
Caffeine is a naturally-occurring psychoactive drug that’s found largely in coffee, chocolate, and soft drinks. It has an acquired bitter taste and acts as a stimulant for the central nervous system. The global caffeine market was valued at $200 billion in 2018 with a CAGR of 6.8% in the forecasting period (2019–2025). This means that the market is estimated to reach nearly $610 billion by the end of 2025. With increased awareness of the health benefits associated with caffeinated drinks, the market is expected to boost in growth over the next few short years.
So far, North America takes up the majority of the consumer market. Other regions such as Europe, Asia-Pacific, Latin America, Middle East and Africa all owe to the rising demand of growing and manufacturing caffeine and its related products. And more emerging regions in China and India are expecting significant growth in the market due to rapidly expanding e-commerce sector.
Key Facts
- The high-end caffeine products come mainly from China and Europe.
- China and India are the largest producers of caffeine worldwide.
- 64% of American adults drink coffee every day, or 3.1 cups per day.
- Americans consume 75% of all their caffeine in the form of coffee.
- Caffeine is the most widely used psychoactive substance in the world.
- While North America has the highest consumer market, Asia Pacific is expected to register the highest CAGR of 8.12%.
- Caffeine can be found in 60 different plants.
- The medical name for caffeine is 1,3,7-trimethylxanthine.
- The United States imports more than 15 million pounds of powdered caffeine annually.
- Over 98% of caffeine intake is in the form of beverages.
- Caffeine is the Earth’s most widely used drug. Alcohol is second and nicotine is third.
Industry Trends
For years, caffeine has been known to mankind as a stimulant drug to improve mental alertness and help prevent tiredness. Thomas Jefferson once said that coffee is the favorite drink of the civilized world. But is drinking a caffeinated beverage actually good for you? Does it have any real side effects? How can we better manage our “caffeinism” in modern day society?
Let’s take a closer look at the advantages and disadvantages of caffeine.
- Advantages
Mental Alertness — As a chemical stimulant, even small doses of 250 mg of caffeine can show signs of alertness and improve mental performance.
Mood — With 250 mg of caffeine, research shows that people can have an overall sense of well-being, happiness, energy, and better sociability.
Concentration — Studies suggest that caffeine can help you improve your cognitive skills like recognizing visual patterns faster.
Physical Performance — Research shows that caffeine allows athletes to exercise for longer periods.
Antioxidants — Antioxidants in caffeine can effectively neutralize free radicals from damaging important molecules like proteins and DNA.
- Disadvantages
Cardiovascular Problems — Often times having too much caffeine can raise blood pressure for several hours. This could cause increased risk of cardiovascular disease.
Stress — Study shows that caffeine links to amplified stress levels throughout the day. It increases stress hormones and elevates one’s perception of stress.
Gastrointestinal Problems — Due to its stimulant nature, caffeine has the possibility of causing abdominal pain, diarrhea, and frequent bowel movements.
Nutritional Deficiencies — Caffeine can sometimes inhibit the absorption of some nutrients and cause deficiencies in calcium, magnesium, potassium, iron, and trace minerals.
Emotional Disturbances — Too much caffeine can cause physiological reactions, which tend to cause irritability, restlessness, insomnia, and agitation.
Investments
Coffee investments globally have been on the rise as investors put more than $600 million into coffee startups in 2018, more than quadrupling funding in 2017. More Americans are noted to pick up caffeine habits, recording nearly 64% of U.S. adults drinking one cup of coffee each day. Coffee in the U.S. alone marks a $12.9 billion market and entrepreneurs have their hands full going up against giants like Starbucks and Dunkin’.
Furthermore, emerging countries in Asia, Latin America, and Africa are actively looking for investments. As these countries grow wealthier, coffee consumption will also likely to increase. Coffee prices tend to be volatile. However, if you are looking to trade in commodities to fend off inflation, coffee can be a great asset to help diversify your portfolio.
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