Although plant polyphenols possess numerous biological activities, due to their low stability and bioavailability, their application in food is limited. Therefore, in recent years, the interest of science and the food industry in the development of efficient and reliable techniques of extraction and encapsulation of bioactive compounds has been growing. The aim of this study was to compare the efficiency of conventional extraction techniques including infusion, decoction and maceration with innovative techniques using high hydrostatic pressure, subcritical water and microwaves in the extraction of polyphenols of mountain germander (Teucrium montanum L.) after which the polyphenol-rich extract was encapsulated with liposomes for the purpose of formulating functional coffee drinks. Prepared extracts were characterised by the determination of extraction yield, the content of total polyphenols and the antioxidant capacity (ABTS and DPPH assays). Encapsulation of the polyphenolic extract was performed with liposomes with different ratio of extract to phospholipids, 1: 5, 1:10 and 1:20. The physicochemical characteristics as well as encapsulation and antioxidant efficiency of the formed liposomes were examined. Liposomes with the best properties were coated with a layer of pectin or alginate and added to the coffee drink after which the polyphenol release profile was monitored for a period of four weeks. Conventional techniques resulted in higher extraction yields compared to innovative ones, with the most total polyphenols being extracted by infusion (41.13 mg EGA gˉ¹ DW), of which 35.93% was echinacoside. Liposomes prepared with a higher proportion of phospholipid (1:20) showed the highest degree of encapsulation efficiency for predominant polyphenolic compounds of mountain germander, echinacoside (68.27%) and verbascoside (80.60%). The same system showed low TBARS test values indicating a high antioxidant potential of encapsulated compounds in inhibiting lipid peroxidation. Coating liposomes with polymers enhanced the retention of polyphenols within the liposome structure, where alginate-coated liposomes showed a slower release profile of polyphenols in coffee over a four-week period compared to pectin-coated liposomes.