Consumption & Trends
For a time, capsule coffee was the height of domestic sophistication. Nespresso’s sleek machines, marketed with George Clooney’s tailored designer suits, promised continental elegance at the push of a button. Among the affluent, low-key rituals have replaced flashy logos as the new luxury signal – but conspicuous consumption is back. 63% of millennials purchased luxury goods in 2024, of which 54% use them to display their wealth and accomplishments.
Specialty coffee, with its emphasis on quality, traceability and ritual, is a curious fit for modern economies obsessed with speed and scale. In the US, specialty coffee is often marketing gloss for a culture focused on speed and scale. Starbucks built its empire on 2-minute drinks, yet third wave coffee culture thrives on time, patience, and quality. Europe has slower rhythms – and cafes continue to experience YOY growth, even as consumer purchasing power declines.
In the United States, size has long signalled value. “Supersize me” was not just a McDonald’s slogan but a national mantra, visible in bottomless sodas and endless refills at diners. Jumbo-sized iced coffees – sometimes 32 ounces or more – are trending in America. With the effect of tariffs and high coffee prices, cafés may be stretching supply by bulking out drinks with milk, syrup and ice. The average US coffee serving is 2-3 times the size of a typical European one, reflecting America’s fixation with volume.
For centuries, matcha was a Japanese ritual, a ceremony that prized patience and restraint. Now matcha has become something else entirely: a bright green shorthand for wellness, virality, and conspicuous consumption. Japan’s matcha exports have nearly tripled in the last decade. TikTok has been driving billions of views and fuelling reported supply shortages. Much of matcha’s appeal rests on perception: the colour green signals health and wealth.
Decaf used to be the butt of industry jokes – “death before decaf” stickers still appear at trade-show booths – but who’s still laughing? Decaf’s share of US coffee consumption climbed by 33% from 2024 to 2025, according to the NCA. Meanwhile, Swiss Water’s Q2 2025 revenue jumped 56% to CAD $67.7m. Colombian EA decaf demand is clogging trade routes and stretching global plant capacity.
Baristas are enjoying their moment in France, Spain, and some Eastern European countries. Where the UK once served as the European bellwether for specialty coffee growth, these countries are now relishing a delayed but pronounced boom. The coveted 2025 World Coffee Roasting Champion title went to a French roaster. In Romania, the coffee market is expected to grow by 5% each year until 2028, and in Spain ‘specialty coffee’ is high in Google searches. From Madrid to Bucharest, coffee shops are growing – but not scaling recklessly.
The venture‑capital playbook has, for a long time, looked like this: target millennials, engineer new consumption moments, and tell a story so compelling even EBITDA looks like an afterthought. VC-backed coffee startups like Blank Street and Black Sheep are chasing scale – but is the model built to last? Some brands are selling equity fast, hoping hype will outpace cash burn – yet many lack a clear path to profitability. Coffee startups secured $600 million in funding within the first seven months of 2018, but VC funding now is slowing down.
Once upon a time, people added milk and sugar to coffee. Now they’re adding spirulina, collagen peptides, adaptogens, protein powder, lion’s mane mushroom extract, maca root, and even raw egg yolks. TikTok-fuelled “functional coffee” trends draw Gen Z with promises of better skin, energy, and gains. 30% of consumers who take supplements opt for the powder format to improve their health without giving up their coffee. Collagen, protein, and adaptogens seem to be the new sugar and cream.
Once the rallying point for a niche movement centred on the promotion of exceptional coffee and equitable trade, the Specialty Coffee Association (SCA) now finds itself at a crossroads. The SCA is set to host 5 global World of Coffee events next year. Critics argue that revised cupping protocols dilute the core of “specialty.' With members ranging from major multinationals to indie cafés, the SCA now balances community ideals with commercial scale – but can it do both?
At coffee trade shows this year – the London Coffee Festival or World of Coffee, for example – non-coffee products like oat milk, matcha, sunflower‑butter lattes, and even beer are increasingly stealing the show. 75% of Gen Z coffee drinkers now prefer flavoured or customised drinks over black filter coffee. As consumer focus shifts, third-wave professionals & businesses face a stark choice: evolve or be left behind.
Certification is standard for baristas, roasters, and cuppers – all in pursuit of excellence. Yet curiously, one role remains neglected, often left to chance or charisma: management. Most cafés certify baristas, not bosses – yet poor leadership is what sinks businesses. Passion isn’t a substitute for process – nearly 7 out of 10 U.S. workers said they would quit their jobs over a bad manager. Meanwhile, structure sells – companies with strong management grow 30% faster.
Once, carrying a Starbucks cup – tall, plastered with the green mermaid – was a status symbol, a badge of modernity. But that was yesterday’s currency. Gen Z’s “little treat culture” is fuelling a boom in customised coffee drinks. 85% of Gen Zers add creamer, driven by aesthetics. Once a symbol of status, Starbucks has given way to DIY concoctions, matcha and lavender lattes as social currency.
Coffee brands today are differentiating not through terroir, but through themes that resonate – whether veteran pride, athletic vigour, or wellness. Coffee is now a canvas for identity – not just a drink. From veteran-themed blends to influencer products, demographic resonance often overrules flavour. With 66% of US adults drinking coffee daily yet European demand stagnant, brands are leaning into values and lifestyle to stay relevant.
Specialty coffee roasters have long been known for passion and artistry rather than spreadsheets. Amid record arabica prices – $4.40 per pound – instinct-driven specialty roasters are facing a harsh reckoning. Born in a post-2008 passion boom, roasters now find passion alone can’t pay the bills. Data blindness in cost of goods and cash flow threatens to turn roasters’ greatest strength – passion – into their greatest weakness.
In 2025, leveraged buyouts (LBOs) have become the lifeblood of global food and beverage deal-making. From the UK and US to South Korea and Colombia, coffee shops are being swallowed up by private equity – one leveraged buyout at a time. In the UK, public debt hit 95.8% of GDP in early 2025 – opening the doors for a PE transformation of its coffee landscape. As scale is increasingly trumps artisanship, local cafés and specialty outfits are becoming portfolio assets.
The coffee industry is undergoing a transformation, taking a page out of the fashion world’s playbook to appeal to a new generation of consumers. Hundreds of RTD coffee products are launched every year in both the US and Europe. Coffee is chasing fashion-style seasonal product "drops" and limited edition collections. 83% of consumers want new RTD flavours – driving coffee toward endless choice and constant reinvention.
Not so long ago, market analysis in the coffee sector was the domain of a few: traders, brokers, and seasoned roasters with access to tightly held information. AI-generated LinkedIn posts surged by 189% after the launch of ChatGPT in late 2022. The coffee market is flooded with predictions and self-made “experts”. Coffee market movements are increasingly detached from supply and demand fundamentals.
As the U.S.-China trade tensions escalate, China's coffee industry is undergoing a significant transformation, marked by the rapid rise of domestic brands and shifting consumer preferences. Amid tariff tensions, Chinese consumers are rallying behind homegrown brands. Luckin Coffee had already rocketed past 22,000 stores, overtaking Starbucks. Now, as China climbs to 2nd in global soft power, U.S. coffee giants are scrambling to localise.
The Indian coffee market is expected to double in size by the end of the decade -- with the revenue of coffee shops in the country growing twice as fast as in the USA.
In the world of specialty coffee, storytelling has become an essential part of brand identity. But consumers are increasingly calling out brands that spotlight farmers and staff without meaningful support or transparency. Less than 10% of the retail price of a coffee goes back to producers. Many coffee companies shy away from pricing transparency.
