Alternative products: what do they mean for coffee?
Sarah Charles
February 17, 2026
A test tube containing a coffee bean in an article about alternative products.
Approximately 65% of Gen Z consumers in the US say they actively seek plant-based options
However, most alternatives still represent a small fraction of all food consumption
Do they actually stand to “replace” staple products in the coffee industry?
WALK through any food trade show or scroll a few minutes on LinkedIn and a pattern emerges: coffee without coffee, chocolate without cocoa, dairy without cows, and sugar without sugar.
Taglines read “healthy”, “functional”, “lab-grown”, and “fermentation-derived” – a futuristic language holding large promises. The question is whether the headlines translate into real market share – or even market potential.
Alternative products – lab-grown “meat,” plant-based foods, and dairy-free products – are enjoying a surge of attention across food and beverage, from cellular agriculture to plant-based substitutes and synthetic inputs. Some are framed as climate solutions, others as health upgrades, others as supply-chain insurance. Many claim to be all three.
Why are so many companies chasing alternatives now – and who is the hype really for?
Consumers are beginning to feel uneasy about their personal finances and are turning away from purchasing expensive plant-based meat alternatives. The recent sales slump experienced by Beyond Meat is a salient example of this trend. Mintel’s industry analysts believe that the meat alternatives market is in a weaker state than a year ago due to the pressure on household finances.
According to Global Food Institute, more than half of U.S. consumers are actively looking for plant-based alternatives when they shop, with 63% of Millennials and 65% of Gen Z leading the charge. In Germany, over three-quarters of 16-24-year-olds are eating plant-based options regularly.
At first glance, the logic seems straightforward. Climate volatility is disrupting agricultural supply chains. Coffee, cocoa and olive oil prices have all swung violently in recent years. Faced with uncertainty, entrepreneurs and brands hedge their bets by imagining substitutes. If nature becomes unreliable, then technology steps in.
“The early iterations of food and beverage alternatives are rarely the ones that win consumers in the end, but they serve as important probes to test the technology and the market’s readiness,” says Margaret Ross, food & beverage product strategy and product development consultant.
“For example, twenty years ago when almond and soy milks were just making their way into coffee shops, who would have guessed that oat would soon be the dominant and even default milk at major cafe chains, as is the case at Blue Bottle and Blank Street? The early alternative was an important trailblazer, even if it failed to dominate.”
“It reveals where opportunity may lie and primes consumers, especially younger generations, to expect alternatives. Beyond acting as a canary in the coal mine for market trends, alternative innovation can also function as a virtue signal to investors – proof of future-readiness and resilience. But it serves consumers too, because eventually one of these products will find the right market fit.”
When core categories are saturated and margins are thin, novelty offers oxygen. An “alternative” product signals progress even if volumes remain small.
From an investor perspective, the appeal is clearer still. Alternatives sit at the intersection of food, climate, and technology – three sectors rich in capital. A lab-grown or functional product reads as scalable, defensible, and acquirable, even before it proves demand.
A barista pouring plant milk into a glass.
How big is the alternative economy, really?
The hype would suggest a vast market, but the data is still modest. Plant-based dairy alternatives, one of the most successful alternative categories, still account for a small share of total dairy consumption globally. Cultivated meat remains commercially negligible – and some point to it failing. Functional beverages grow quickly – but from low bases.
There is, however, steady growth. The French retail market alone – across five categories of plant-based food – was valued at €537 million in 2024, 8.8% higher than in 2023 and 20.5% higher than in 2022.
Most alternatives face a stubborn economic constraint: they are rarely cheaper than what they replace.
Coffee alternatives, for example, struggle to compete with a product that benefits from centuries of optimisation, global infrastructure and deeply ingrained habits.
Research finds that up to 48% of Gen Z consumers say they would try beanless coffee if it were cheaper and greener. Unless an alternative can undercut coffee on price or outperform it decisively on health or convenience, adoption remains niche.
Health is often positioned as the differentiator. Alternatives promise less caffeine, fewer calories, added nutrients, or reduced “stress.” Some consumers respond. According to a survey, 72% of consumers were more likely to buy a food or beverage product if the packaging mentioned a health benefit.
Chocolate illustrates another dilemma. Lab-grown cacao could potentially be a solution to supply issues or deforestation in the future. However, chocolate is not consumed as protein or fuel, but as pleasure. Any substitute that compromises sensory experience faces a high bar. As with many alternatives, the technical achievement may come before cultural acceptance.
This gap explains why many alternative products remain premium, niche, and narrative-heavy.
“An alternative doesn’t have to replicate the original on every characteristic,” says Margaret. “Oat milk proves the point. Rather than targeting people who drink dairy for calcium and protein, brands like Oatly focused on cafés, where milk’s role is creamy texture in coffee. With comparable mouthfeel, oat milk fits that use case perfectly.
“The same logic applies to coffee and cacao alternatives: the aim isn’t to replace the original outright, but to find moments where the alternative’s unique qualities meet consumer needs just as well, if not better. A carob bar may never rival a single-origin dark chocolate for flavour purists, but it could easily stand in for the crunchy coating on an ice cream bar, where texture matters most.”
A hedge against the future – or a strategy for acquisition?
For large food companies, investments in alternatives can be seen as hedges. Big food companies’ growing involvement in sustainable food production suggests more than risk management: ongoing tech advances, market growth and sustainability pressure point to a possible industry shift.
But whether a full transition takes hold will depend on how technology, economics, politics and culture evolve.
For start-ups, alternatives offer narratives around acquisition. Expecting to be acquired, a start-up may reshape its investments to boost its sale price. That can either help or harm innovation and consumer value.
In this case, the goal is not to outcompete coffee or chocolate, but to become strategically interesting. Many do not need to win consumers at scale to succeed financially; they need to be bought before that test arrives.
“Alternative food and beverage products are often cast as underdog heroes in a story that overstates demand,” says Margaret. “The alternative meat sector is a warning: in recent months several cultured-meat firms – including Aqua Cultured Foods, Hooked Foods and DUG Foodtech – have shuttered or gone bankrupt as big bets on dethroning Big Meat failed to pay off. That doesn’t mean there is no future for alternatives; just as soy milk walked so oat milk could run, today’s failures may lay the groundwork for tomorrow’s success.
“The real opportunity may lie not in replacing cacao or coffee outright, but in offering consistent, price-stable ingredients for large-scale food manufacturing. By focusing on B2B integration, blends with traditional ingredients and functional enhancements, these products can move from novelty to infrastructure. For now, they’re largely a hedge against risk – but in fast-moving food markets, having the right innovation ready when demand shifts could prove invaluable.”
In practice, alternatives behave less like replacements and more like accessories. The alternative economy grows alongside the old one, not instead of it – both in the coffee sector and beyond.
Coffee Intelligence