Coffee is a consumable item, available in Risen only. As most liquids in the game, coffee restores mana rather than health. Drinking this will add 10 mana to the character's total, never exceeding the maximum level of mana available to him.
Coffee is not in high demand among owners of taverns, innkeepers, or merchants. Only Patty Steelbeard sells the item. There are definitely better sources for restoring depleted mana, many of which are easily purchased by Patty herself or elsewhere. If mana needs to be restored quickly, however, and there is no other option (inventories of both the Castaway and merchants are depleted), a hot cup of coffee can hit the spot.