Another January swings around, and so as many post-indulgent consumers do our thoughts turn to decaf.
A number of things continue to swirl in the collective coffee consciousness, among them the growing understanding that caffeine being produced by the plant as an insecticide might be a myth. Going back 40 years to October 1984 the New York Times was reporting on research by Neurologist Dr James A. Nathanson who had been conducting research on bugs with caffeine and observed who it was affecting their behaviour, and how it also increased the effects of other insecticides when the two were combined. ”Over time, plants have developed certain defences to protect themselves against insects, and we suspected that caffeine might have been present for that purpose – as a natural insecticide,” he was quoted as saying.
More recently, research revealed that honeybees and other insects would actually choose caffeinated flowers over non caffeinated ones, being apparently affected by the caffeine with their memory and learning functions improved under the influence. However, Cambridge University also found results where caffeine was having a reducing influence on parasitism success. Let’s not mention that humans will actively choose a caffeinated flavour over the identical but non–caffeinated one very much suggesting there is more to be understood. Of course, humans are different from insects for sure.
Whilst caffeine in its pure form can be used as an insecticide, is it true to say the plant produces it for this reason? I am sure the research will continue.
At The Portland SCA, Best New Product further built on the caffeine nuances with Rarebird – a coffee produced using paraxanthine instead of caffeine. What is Paraxanthine? It’s a stimulant that is created by the liver when it breaks caffeine down and has a shorter half life than caffeine so is removed from the body quicker. It’s purportedly anxiety reducing too, though with a shorter history of use, I guess there will be more to come in future on this.
Given all this contradictory, innovative or counter-contradictory material, where is the decaf market these days? How has it performed since the pandemic, and is it still worth considering choosing a good decaf over whatever is cheapest and available? [Clue: the answer is always yes]
Was the pandemic growth in decaf an anomaly?
As life moves on from the upheaval of the pandemic, it’s influence on what we consume will wane. It is often said that a public health emergency sees parallels in consumer habits with decaf, so does this mean the decaf market will shrink? Inkwood Research are pegging the CAGR growth of the decaffeinated products market from 2024 to 2032 at 7.72%, perhaps a little more conservative than the 7%-8.5% that was previously given a couple of years back. This is also encompassed in the decaffeinated products market rather than just coffee but is still dominated by the major coffee companies who play a pivotal role in defining the UK market.
According to their press release from October, “..the United Kingdom decaffeinated products market is poised for substantial growth, driven by changing consumer preferences, innovative product offerings by leading companies, and advancements in decaffeination technology. The market’s focus on health and wellness trends, coupled with the strategic efforts of key players, positions it for continued expansion and success through 2032.”
Sales volume of roasted decaffeinated coffee manufactured in the United Kingdom (UK) from 2010 to 2023 (in tonnes)
So that’s game on then. Decaf has been growing steadily for a while and will continue to do so. It’s reached the point that marketers have got involved with the rebranding of the Ethyl Acetate solvent process to Sugar Cane (at least, for EA from Colombia, where it is produced), and CO2 now becoming ‘Carbonic Natural’. Swiss Water® has long recognised the power their branding has amongst the population, and so it feels like this was only a matter of time. Will methylated chloride also follow suit? Certainly, the nuances behind where and when you can or cannot use phrases like ‘natural’ (pdf) are being carefully handled, and only the cynical would suggest the aligning with fashionable processing methods is more than chance.
Demand still driving the sales value
According to Statista, the sales value rose from 23,372 in 2022 to 28,571 in 2023 (The most recent figures I could find to date) but as we all know, so did the costs. Perhaps what this actually shows, is that increased costs have not deterred the decaf market, demand is still there and so still worth paying attention to. In fact, volume increased in the UK to 2728 tonnes of roasted decaf (again, Statista) backing this up.
Sales value of roasted decaffeinated coffee from 2010 to 2023 in the UK (in 1,000 GBP)
A more subtle shift might also be underway yet. The health message that “caffeine is bad” may be being replaced by another message. This perhaps is counter to what is happening in the US and in some areas of social media, but also why it is important for us to be aware of what is happening in our market, not theirs. The message we hear more often now is “Sleep is good.” This still forms part of the wellness offering, but as Speciality Food Magazine reports, Millennials and Gen Z are trying to be more mindful, and this fits in with that routine.
According to the article: “As discussion grows (in mainstream media, on podcasts and social media) around the importance of sleep to our hormones, weight, mental health and productivity, so more consumers have been sitting up, taking notice, and reaching for alternative brews.”
A Mintel report views this trend as a threat to cafes, somewhat interestingly. Reporting a 3% switch to supermarket cafes being driven by price consciousness, (and own label instant seeing a 20% increase in value sales too) the impact of caffeine on sleep and mood is seen as a ‘substantial’ threat to coffee shops and the coffee market.
However, understanding your market will help here. Back to Inkwood. “Younger consumers often prioritize health and wellness […] retailers may introduce innovative decaf coffee products to meet the preferences of younger consumers. This could include flavored decaf options, cold brew decaf, or sustainably sourced decaf coffees.”
UK Coffee Consumption Age Groups & Cups Per Age Group Per Day
The 30 to 44 age group though seeks a different style of beverages centered around decaf tea, decaf coffee or decaf versions of already known drinks, they add. So knowing the demographic of your customer absolutely helps you decide which route to pursue.
Mintel also note that while there is a lot of noise around decaf, decaf options are not winning over most concerned consumers. This is despite a 30% increase in new caffeine free products launched between 2022-23. What is changing is a reported increase in caffeine level awareness with a more informed consumer looking to know and monitor their caffeine levels, and products offering varied levels of it. Over 50% of consumers showed interest in this.
So where does this leave us? Well if we take our own advice, perhaps if you are catering to the under 35’s, an organic SWD (the lack of chemicals used means it can retain the organic certification where MC or EA cannot) as a great starting point for customising. This marries the wellness of sleep is good alongside the sustainable/eco-friendly approach favoured.
If catering for the 30+ audience though, then maybe switching the house blend and decaf to the same beans works for you, such as our sourced options allow you to do. The added benefit of these too, is that you can even blend to create your own half-caf or any variation you like, whilst maintaining single farm traceability or regional prowess!
