I know that coffee was pretty much non-existent in the South as the Civil War progressed, but this is made in Boston, one year into the conflict, so I guess it's just for people who want to save a few nickels!
They were definitely a little more liberal with the word vegetable back then - I haven't heard of this one, but I know of another - Lydia Pinkham's vegetable compound, which was a tonic made of herbs, roots and alcohol. If that was considered a vegetable compound, for all we know, this stuff could've been a sack of chicory and coca leaves.
That's vegetable in the sense of derived from vegetation, or any sort of plant. That's same use you see in "vegetable oil". In the old Twenty Questions game the person posing the riddle had to start off identify the mysterious item as one of "animal, vegetable, or mineral". If he is thinking of a wooden chair, he says it is vegetable.