In recent years, a growing focus on health and well-being has led to the rise of functional coffee. From protein-enriched ready-to-drink beverages to organic blends to CBD-infused products, the market is becoming steadily more diverse year after year.
As millennials’ focus on wellness intensifies and Gen Z consumers demand more from their beverage experiences, the functional coffee market is likely to become more popular. By 2029, its value is expected to reach US $4.45 billion.
This presents coffee roasters with viable opportunities to diversify their product offerings and revenue streams, which is becoming increasingly important as business costs rise. But a strict focus on quality still needs to be a priority if they want to find success.
I spoke to Aloha Farms’ CEO and co-founder, Matthew Canaday, and marketing assistant, Mirena Rossbach, to find out more.
You may also like our article on why black coffee is already a functional drink.
Why demand for “healthy coffee” has never been higher
The health benefits of coffee – particularly black filter coffee – are well-documented. Medical professionals, sports coaches, and nutritionists have long pointed out how its antioxidants can reportedly minimise the risk of a number of diseases.
A landmark 2012 study by The New England Journal of Medicine, for instance, found that women who drank four to five cups of coffee per day were at 12% less risk of an early death. For men, this decrease was 16%.
More recently, research published in The European Heart Journal found that people who drank coffee in the morning had a lower risk of dying from cardiovascular disease and had a lower mortality risk than all-day coffee consumers.
Researchers and consumers have long been interested in coffee’s health benefits, but the Covid-19 pandemic brought about a much bigger focus on wellness. According to the World Economic Forum, 62% of surveyed Americans believe their health has become more important to them than before the pandemic.
Forced global lockdowns intensified consumers’ focus on quality ingredients, prompting more people to reconsider their dietary choices. Given the huge spike in at-home coffee consumption during the pandemic, this naturally included the coffee products they consumed.
Cold brew emerged as a healthy alternative to sugary drinks and sodas. The spring 2024 National Coffee Data Trends report found that 21% of US coffee drinkers believe cold brew is healthier than other types of coffee. Easily customisable and convenient to drink on the go, it resonates with younger consumers who are both busy and health-conscious.
The functional coffee market diversifies
Interest in health has persisted following the pandemic. The fast-growing US $4.5 trillion global wellness economy is now so pervasive that wellness is considered an essential element of a brand’s strategy for 73% of global consumers.
This extends to the coffee industry. As consumers increasingly prioritise their well-being, roasters and other brands have responded to shifts in purchasing behaviour and the trend towards wellness. In recent years, organic coffees (grown without synthetic fertilisers and pesticides), protein-enriched lattes, and adaptogen-infused products have all become more prevalent.
This trend is fueled by value-conscious consumers who view functional coffee as a cost-effective way to get a caffeine fix with the added advantage of health benefits. The rising popularity of functional ingredients like mushroom extracts and CBD has created a market segment that appeals to both health enthusiasts and traditional coffee drinkers.
These enhanced beverages purportedly deliver a number of benefits, such as improved focus, reduced stress, enhanced immunity, and better athletic performance, while still providing the familiar comfort and ritual of coffee consumption.
A focus on quality is paramount
With consumers increasingly prioritising wellness, the functional coffee market provides roasters and other brands with opportunities to tap into new markets.
Adding health-focused products to their offerings allows roasters to diversify revenue and cater to a wider audience, which has never been more important. Since early 2025, the price of green arabica coffee has more than doubled, while logistics and operating costs have also increased significantly, eating into already-slim profit margins.
Capturing the interest of a broader range of consumers can help roasters navigate these challenges, but quality can’t be overlooked. Maintaining consistently high-quality standards should remain a priority.
“Traditionally, when you think of something healthy in coffee, you assume it won’t taste good,” says Mirena Rossbach, the Marketing & Assistant CEO at Aloha Farms in Kona, Hawaii, a co-operative that represents over 59 independent farmers who sell 100% Hawaiian products, including coffee.
“But a renewed focus on health and wellness has spurred innovation in the market, meaning you can have the best of both worlds,” she adds. “Functional coffees like Aloha Farms’ Kona Healthy Hapa offer health benefits and great taste.”
Mirena explains that the coffee undergoes a processing method similar to common decaf processes. First, it’s soaked in a stainless-steel container in ice-cold water to close the coffee’s “pores” before being rapidly cooled in a freezer. The coffee then moves through industrial dryers and a UV sanitiser to remove organic pesticides, chemicals, and mycotoxins, preserving flavour and quality while creating a product ideal for health-conscious consumers or those with dietary sensitivities.
The process also alters the chemical composition of coffee, reducing acidity levels by 90% and caffeine content by 19%, as verified by testing labs in Japan and Germany. This makes the coffee more palatable for consumers who prefer low-acidity coffees or are sensitive to acidity, as well as those who want or need to regulate their caffeine intake.
Consumers want health benefits and taste
As health continues to capture consumer attention across demographics, it has emerged as a key factor in coffee customisation, signalling a new era in which wellness is becoming an integral part of the beverage experience.
Simultaneously, consumers still value flavour and quality, especially with premium beans that offer unique tasting notes.
“Kona coffee is one of the most expensive coffees in the world. We carefully harvest cherries that are produced sustainably and are fully organic,” says Matthew Canaday, the co-founder and CEO of Aloha Farms.
At World of Coffee Dubai in early February 2025, a Kona coffee fetched an auction bid of US $910/kg, setting a new world record for Hawaiian coffee and underscoring its value in the specialty market.
“Once we process the coffee to reduce its acidity, we add organic oils, which are rated and approved by the USDA, during the roasting process,” Matthew says. “For instance, we’re offering an organic pineapple-flavoured Kona Healthy Hapa coffee at the moment, as well as organic tiramisu, macadamia, vanilla, coconut, and whiskey flavours in the winter.”
At a time when people are equally concerned about their health and the health of the planet, organic coffee has reemerged as an effective point of differentiation for producers and roasters.
“We developed the Beyond Organic certification for people who are interested in having something good to put in their bodies,” Matthew says. “Most coffees sometimes are grown with pesticides and synthetic fertilisers, but we focus on 100% organic coffee and ingredients.”
The functional coffee market is poised for further growth
Beverage customisation is set to become a bigger trend in 2025, with health and wellness positioned as a key market driver. Tapping into this burgeoning segment means roasters can strategically cater their offerings to different demographics, including Gen Z, who have the highest spending power in the industry and look for products that are more than “just” coffee.
But as brands proliferate with adaptogen, collagen, and nootropic-enhanced products, the risk of confusing consumers with unfamiliar ingredients, unsubstantiated health claims, and label fatigue increases. Taking a stripped-back approach to functional coffee, such as organic certification, could yield more success.
“Coffees like Aloha Farms’ Beyond Organic offer real health benefits for people and the planet,” Matthew says. Organic coffees are quickly becoming the preferred choice for consumers who want to minimise their exposure to substances like artificial pesticides and fertilisers.
The demand for organic coffees continues to grow as consumers become more aware of various agricultural practices and their potential health implications. Coffee drinkers are increasingly willing to pay a premium for organic certification, viewing it as an investment in both their personal health and environmental sustainability.
At the same time, investing in organic farming also secures a more sustainable future for the coffee industry, improving soil health and bolstering producers’ economic resilience.
“At the core of our mission is the desire to promote sustainable coffee-growing practices while supporting Hawaiian families and farms,” Mirena concludes. “This commitment has allowed us to grow from a cooperative to a franchise, expanding our reach while maintaining our core values.”
Coffee has long been positioned as a “superfood”, gearing the industry up to its current focus on functional products. As the market diversifies, it drives innovation, but roasters need to make sure that novelty doesn’t preside over quality.
While consumers demand add-on value with health benefits, they also expect quality and flavour. Roasters and coffee businesses must ensure they can deliver on all accounts.
Enjoyed this? Then read our article on why coffee can be considered the original “superfood”.
Perfect Daily Grind
Photo credits: Aloha Farms
Please note: Aloha Farms is a sponsor of Perfect Daily Grind.
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