Known for his lyrics with N.W.A. and his solo career, American rapper and songwriter Ice Cube is quoted as saying, “I make a mean cup of coffee, if you give me the right ingredients.”

When it comes to the beverage market, demand for coffee ingredients, especially in the ready-to-drink (RTD) space, has risen sharply during the past few years, experts note, helping beverage-makers make a mean cup of coffee.

“The opportunities only stop where your imagination does,” says Philip Caputo, marketing and consumer insights manager at Carteret, N.J.-based Virginia Dare. “Coffee is an incredibly versatile ingredient and with the right team of flavorists at your side, the sky’s the limit. 

“We’re seeing many formulators continuing to experiment with blending coffee ingredients into beverages as a flavoring component,” he continues. “Concentrates and extracts are finding homes in protein formulations, alcoholic beverages, functional drinks, and plant-based dairy alternatives. As consumers increasingly seek innovative, multi-sensory experiences, coffee is being incorporated in unexpected and exciting ways — from coffee-infused energy drinks to coffee-flavored kombucha.” 

In its “Coffee Extract Market 2025-2033 Market Analysis,” market research firm Pro Market Reports notes that the coffee extract market is characterized by continuous innovation, with companies focused on developing new products with enhanced flavors, functionalities, and convenience.

According to the Feb. 11 report, the global coffee extract market is projected to reach $1.7 billion by 2033, expanding at a compound annual growth rate (CAGR) of 7.65% from 2025 to 2033.

“Key trends influencing the coffee extract market include the growing popularity of single-serve coffee systems, the increasing awareness of the health benefits associated with coffee consumption, and the rising demand for sustainable and eco-friendly products,” it states.

Virginia Dare’s Caputo, meanwhile, notes that premiumization trends also are influencing the market.

“Premiumization trends combined with consumer interest in functional beverages and specialty coffee have shown us that people are willing to pay for high-quality and specialty beverage formulations,” he says.

Caputo adds that functional ingredients also continue to impact beverage formulations across the board.

“As consumers become more aware of functional ingredients like nootropics, adaptogens, and certain kinds of protein, they’re looking to get more out of their cup of coffee than just caffeine,” he explains. “Sugar reduction also continues to influence consumer buying decisions. 

“For RTD beverages that might rely on sugar to mask some of the bitterness of the coffee, complications can arise when reformulating to compensate for the loss of sweetness,” Caputo continues. “Brands are turning to alternative sweeteners, natural flavor modulators, and strategic ingredient pairings to maintain balance without compromising taste."

Innovations in brewing techniques and coffee extraction methods also are helping to reduce bitterness, Caputo notes, allowing low-sugar formulations to deliver a smooth, enjoyable drinking experience.

“Beverage cubes are another emerging format for coffee that has made strides in terms of sustainability and convenience,” he says. “This aligns well with those driving trends and helps make premium coffee more readily accessible and convenient to try.” 

Exciting combinations

When it comes to flavor pairings, traditional flavors like vanilla, caramel, hazelnut, and mocha remain staples in coffee drinks, but consumers increasingly are seeking more complex and adventurous profiles, Caputo says. 

“Spices like cinnamon, cardamom and turmeric, along with floral notes like lavender and rose, are adding new layers to coffee drinks, reflecting a growing demand for global influences and wellness-inspired ingredients,” he explains. “Additionally, fruity flavors such as passion fruit and blackberry are becoming popular in iced and cold brew options, offering a tangy contrast to coffee’s bitterness.

“Virginia Dare’s expertise in creating custom flavor profiles helps brands navigate these evolving trends, from matcha and green tea blends to tropical coconut and pineapple notes in dairy-free formulations,” Caputo continues. “These innovations align with a shift toward personalized, bold and functional coffee experiences, helping brands meet the growing demand for both indulgence and performance.”

Yet, flavor innovations are not the only factor driving demand for coffee ingredients.

“Organic coffee ingredients are definitely gaining traction, and we’re seeing more and more consumers seeking products that are not only high-quality but also ethically sourced and sustainably grown,” Caputo says. “At Virginia Dare, we’ve really leaned into this demand by ensuring that our organic coffee ingredients meet top-tier standards. 

“By partnering with us, brands can access premium organic coffee extracts that deliver great flavor and help meet the growing consumer desire for transparency and sustainability,” he continues. “Whether you’re working on a new coffee beverage or exploring functional ingredients, we’re here to help create coffee products that stand out with ethically sourced, organic options that consumers can trust.”

What lies ahead

Although the coffee extracts market is poised for growth, it is not without its challenges, experts note. 

According to Research and Markets’ “2025 Coffee Extracts Market Report,” continuous supply chain challenges, combined with economic and geopolitical uncertainties posed significant challenges for coffee extracts manufacturers in 2024.

“Despite these challenges, coffee extracts’ market growth is being driven by economic improvements, the digitalization of processes to enhance resilience, and the strong preference among Gen Z consumers for ‘better-for-you’ products,” the report states. “Further, the prevailing trend of narrow profit margins amidst robust consumer demand is expected to continue through the first-half of 2025. The financial and social impact varies significantly across different countries and markets necessitating coffee extracts market players to develop strategies tailored to a country’s specific market conditions.”

Virginia Dare’s Caputo pinpoints climate change, logistical disruptions, and increased demand as contributing to rising coffee prices during the past few years.

“In 2024, coffee prices hit a 47-year high, which has started trickling down into retail pricing,” he says. “To address these challenges, it’s always best to diversify where you’re sourcing your beans, invest in sustainable farming practices to stabilize the areas where coffee is grown, and enhance your supply chain transparency by fostering strong relationships with suppliers and using technology to track the movement of goods.

“Following these best practices can help ensure a reliable supply with price stability that can withstand any disruptions to crops, supply chains, or pricing, supporting long-term sustainability and meeting the growing demand for premium, ethically sourced coffee in the marketplace,” Caputo continues.

When it comes to the future of a longstanding ingredient like coffee, Caputo says, is all about innovation. 

“Coffee is no longer just about caffeine. It’s evolving into a key player in functional beverages –– whether that means combining it with protein, nootropics, or adaptogens to meet consumer demand for more than just a quick energy boost,” he explains. “We’re also seeing more creative flavor profiles — from spices like cinnamon and cardamom to tropical fruits and savory twists — and we’re helping brands bring those ideas to life.

“At Virginia Dare, we leverage our deep expertise to help brands develop these novel applications, creating customized coffee flavors that enhance texture, aroma, and taste in new and creative beverage categories,” Caputo continues. “The future of coffee ingredients is all about pushing boundaries and discovering what’s possible.”