Sparkling Coffee Market

Market Overview

The global sparkling coffee market was valued at USD 1.47 billion in 2022. It is estimated to reach USD 4.49 billion by 2031, growing at a CAGR of 13.20% during the forecast period (2023–2031). The introduction of RTD coffee and the high consumption of coffee across Europe and North America promotes market growth.

Coffee can be converted into sparkling coffee by adding carbon dioxide to the coffee grounds. As a result, the taste and acidity of the coffee are reduced. Sparkling coffee is gaining popularity as an alternative to regular coffee and is frequently served cold. As more people become aware of this coffee and its advantages, the sparkling coffee market is anticipated to expand in the upcoming years. Along with being offered in grocery stores, this variety of coffee is growing in popularity at cafés and restaurants.

Sparkling coffee can be made in several ways. Utilizing a carbonator is the most typical way. After adding carbon dioxide, this device closes the coffee in a container or bottle. After that, the carbonated coffee can be served hot or cold. A keg can also be used to create sparkling coffee. Restaurants and cafes frequently employ this technique. After being brewed, the coffee is put in a keg. The keg is then filled with carbon dioxide, and the coffee is left to sit for a few days. As a result, carbonated coffee that can be dispensed on tap is produced. A novel and pleasant substitute for regular coffee is sparkling coffee. Sparkling coffee is a terrific choice if you're searching for a method to spice up your coffee-drinking experience.

Market Dynamics

Global Sparkling Coffee Market Drivers:

Introduction of RTD Coffee

Ready to Drink (RTD) coffee, particularly sparkling coffee, is popular among diverse consumers, particularly those who like consumables they can take wherever they go. The rise in popularity of RTD coffee drinks may largely be attributed to the generation known as millennials. In addition, the accessibility of ready-to-drink (RTD) coffee in the form of liquid and powder, infused with various tastes and organic versions, has attracted many customers. Additionally, ongoing innovation in the RTD sector, such as the advent of cold brew coffee, has shifted away from freshly brewed coffee toward instant coffee among consumers. This shift has occurred as a direct result of the popularity of cold brew coffee. Because making cold brew coffee at home calls for a distinct extraction technique and a time-consuming operation, not many customers choose to make this variety of coffee on their own. After this, it had grown into one of the most well-liked ready-to-drink (RTD) coffee products on the market, when before, it was just a highlighted beverage item at coffee shops.

High Consumption of Coffee Across Europe and North America

Coffee is among the world's most popular hot drinks, especially in Europe and North America. The sparkling coffee market is growing rapidly because countries, including the US, Germany, France, and Italy, are pioneering new coffee trends. The vast number of specialty roasters, coffee bars, and local coffee brands in these locations also raise working people's demand for sparkling coffee. Sparkling coffee's convenience and speed fuel this desire. Europe's top coffee consumers are Germany, France, and Italy. North America's top coffee consumers are the US and Canada. According to the British Coffee Association, the average British person drinks two cups of coffee each day. These significant coffee markets in Europe and North America are pushing coffee consumption trends, including sparkling coffee.

Global Sparkling Coffee Market Restraint:

Side Effects Associated with Decaffeinated (Decaf) Coffee

Coffee is one of the most widely consumed beverages worldwide. However, according to a study by the American Heart Association, excessive consumption of decaf coffee may contribute to chronic diseases such as myocardial infarction and rheumatoid arthritis. Compared to regular coffee, decaf coffee contains approximately 97% less caffeine. One serving of decaf coffee contains between 2 and 5 milligrams of caffeine, which, when ingested multiple times per day, can cause chronic diseases. Additionally, organic solvents, carbon dioxide, and water are used in decaffeination, removing the natural flavor and caffeine from the coffee. Also, this is a significant disadvantage of decaf coffee. Moreover, according to a study by the American Heart Association, decaf coffee may increase poor cholesterol (LDL cholesterol) levels. In contrast, these effects were not observed with the caffeinated version. Such factors restrain the decaf coffee market and are expected to harm the global market over the forecast period.

Global Sparkling Coffee Market Opportunities:

People are Transitioning to Sugar-Free Beverages.

New research shows Americans no longer drink sugarless drinks. The Lancet analysis shows that U.S. sugary drink sales had dropped since 2000 when the country was number one. Its per-capita sugary drink consumption has declined.

Governments have tried taxation, public awareness, and school sales bans to limit sugary drink consumption with variable degrees of success. These measures were adopted because excessive added sugar consumption is connected to obesity and poor cardiometabolic health. Consumers buy sparkling coffee with natural sugar from several brands. Vivic sells sparkling coffee flavored with licorice root and softly carbonated on Amazon. Thus, people prefer sugar-free cold brews or effervescent coffee. Pressurized carbon dioxide injects modern sparkling coffee. Even with flavoring, this water has less sugar than soda. Manufacturers launched unsweetened sparkling coffee to meet consumer demand. Sail Away Coffee Co. offers Nitro Unsweetened effervescent coffee with a rich, toasted, tangy flavor and no chemicals. Restaurant diners in the U.S. are increasingly ordering sparkling or flavored coffee. These reasons should boost the sparkling coffee market over the forecast period.

Regional Analysis

Based on region, the global sparkling coffee market is bifurcated into North America, Europe, and the Rest of the World.

North America Dominates the Global Market

North America is the most significant global sparkling coffee market shareholder and is estimated to exhibit a CAGR of 12.8% over the forecast period. The region held the largest market share due to consumers' increased desire for sparkling coffee rather than more conventional caffeinated beverages. It is anticipated that the presence of a substantial number of manufacturers in the area, such as The Coca-Cola Company, Manhattan Special, and Spindrift, will further fuel the expansion of the market. This is one of the factors that will contribute to the market's growth.

Additionally, it is projected that increasing consumer preference for the beverage, which, in comparison to traditionally caffeinated beverages, serves to raise both energy levels and attention, will be the key factor driving expansion in the market. This prediction is based on the fact that it is anticipated that increasing customer preference for the beverage will serve to increase both energy levels and focus. It is not out of the question that this compulsion will become even more intense over the next few years. It is anticipated that a sizeable number of producers in this region, such as Manhattan Special and Spindrift, will be of considerable assistance in developing the market in this area.

Europe is anticipated to exhibit a CAGR of 11.9% over the forecast period. The market has successfully attracted the attention of members of the younger generation, who are enthusiastic about coffee due to various inventions and advancements in specialty drinks, including sparkling coffee. In addition, social media influencers across various networks have been contributing to the movement, along with corporations that manufacture soft drinks, several coffee shops, and roasters all over the continent.

In addition, during the past few years, this area has seen a significant increase in fast-food restaurants opening their doors for business. To expand their reach in a market that is becoming increasingly competitive, they have been releasing several new beverages and food items that both traditional American cuisine and cuisines have influenced from around the world. It is anticipated that this will be favorable for the market for sparkling coffee in the years to come.

In the rest of the world, premiumization is not restricted to selling alcoholic beverages only. Manufacturers are seeking an expanding number of opportunities by presenting their innovations in the new beverage categories due to the rise in coffee consumption in Central and South America (CSA) and the Middle East and Africa (MEA). These regions are known as the CSA and MEA, respectively. One example of such a premium innovation is sparkling coffee. Companies are concentrating on increasing their lines of caffeinated coffee products to attract the hip millennial consumer base after discovering that sparkling coffee has the potential to become a distinct beverage category. Regular consumers of low-calorie cola carbonates make up a significant portion of a company's target market, and the company's goal is to provide a healthy alternative to sugary caffeine for these consumers.

Additionally, makers of energy drinks have been able to attract the attention of younger consumers by advertising the benefits of caffeinated sparkling coffee, which assists in increasing one's mental and physical performance. This has allowed them to divert the attention of younger consumers toward their products. Caffeinated sparkling coffee is a potential alternative for the older customer group because it is an energy drink without artificial flavors or sweeteners. Additionally, caffeinated sparkling coffee contains no artificial flavors.

Segmental Analysis

The global Sparkling Coffee market is bifurcated into product and distribution.

Based on the product, the global sparkling coffee market is bifurcated into caffeinated and decaffeinated. 

The caffeinated segment dominates the global market and is projected to exhibit a CAGR of 12.3% over the forecast period. To keep a higher degree of alertness and focus throughout the day, drinking beverages that contain caffeine can be helpful. It is anticipated that the growing worries about the health and fitness of individuals will improve the growth of this market segment. This is because of the growing demand for healthy energy drinks as a consequence of the rising concerns. The ever-increasing demand for beverages of this kind is the primary factor driving the rise of this market. In addition, consumers are persuaded to choose these beverages by the active product debuts occurring inside this category. These product introductions are taking place within this category.

Based on distribution channels, the global sparkling coffee market is divided into hypermarkets and supermarket, convenience stores, online, and others. 

The online segment is the most significant contributor to the market and is estimated to exhibit a CAGR of 14.7% over the forecast period. One of the most important elements that are increasing sales of sparkling coffee through the online channel is the shift in buying behavior that customers have been exhibiting. Advantages that can be gained from using online platforms, like shopping. The ability to shop online from the convenience of one's own home, doorstep delivery, free shipping, subscription services, and discounts entices millennials and other members of the younger generation to choose this channel. 

Due to the growing customer propensity for the online platform, companies have been encouraged to provide products through the direct-to-consumer channel. For instance, to appeal to a larger number of customers, DrinkVIVIC distributes its sparkling coffee through direct-to-consumer as well as other channels of distribution. To broaden their customer base, businesses make their wares available through third-party distribution channels like Amazon.com.

Recent Developments

• April 2022- Illycaffè, a global leader as a coffee supplier, expanded its cold brew coffee portfolio by adding new ready-to-drink flavors. It has been done to satisfy coffee enthusiasts' desire for extremely premium cold coffee recipes.

• June 2022- Paulig started new climate projects in the coffee-origin countries to accelerate sustainable farming practices. Paul's new coffee climate projects in the coffee origins encourage implementing climate-smart farming practices to meet Paulig's science-based target to reduce greenhouse gas (GHG) emissions in its value chain by 50% by 2030.