Coffee soars to new highs – alt-brews gain ground with investors: 'We're always looking for alternatives'

Coffee beans are a delicate crop, heavily reliant on specific growing conditions – and climate change is now hitting production hard. Poor harvests have driven coffee prices to record highs.

According to the Food and Agriculture Organization (FAO), world coffee prices surged nearly 40% in 2024 compared to the previous year, reaching multi-year highs.

Paulig, the food giant that leads the coffee market in Finland and the Baltics, is keen to find sustainable solutions. According to Rosemari Herrero, Head of Investments at Paulig’s investment arm Pinc, interest in viable substitutes is rapidly growing.

"We’re always looking for alternatives to coffee," she tells Impact Loop.

Substitutes could become real contenders

Pinc has already backed companies developing coffee varieties more resilient to climate change, but it's also on the lookout for crops that could complement or even replace the coffee bean entirely.

Most consumers wouldn’t willingly opt for something that isn’t "real" coffee, Herrero admits – but blending coffee with a small amount of a substitute could create a more sustainable product without a noticeable difference in flavour or function.

"If that reaches a wide audience – then you've significantly reduced coffee consumption," says Herrero.

Among the options being explored are ingredients derived from peas and date pits.

Local coffee production

As climate change advances, we’ll be forced to shift towards more locally grown and seasonal ingredients, Herrero stresses. Some crops – like coffee and cocoa – will become much harder and more expensive to grow.

But new technology could shake things up. Indoor farming, bioreactors and fermentation processes could enable local production of goods that were previously imported. Combined with AI and automation, this could help bring down production costs.

So far, however, these methods are mainly cost-effective for premium products.

"Right now, we don’t factor in the real costs of climate impact, transport and land use. If we did, maybe we’d already be growing everything indoors using new technologies like cellular agriculture and precision fermentation," Herrero says.