Pret A Manger reportedly sells 6,000 servings of its coconut porridge daily, attributing its revenue and earnings growth in 2016 to this item and the rising popularity of vegetarian foods. The demand for coconut-based products—ranging from snacks, flour, and oil to beverages—has surged, with Fairfood, a Dutch nonprofit organization, noting that approximately one in every 20 products on supermarket shelves now contains some form of coconut. The mainstream acceptance of coconut products began a few years ago with the rapid rise of coconut water as a natural beverage. This trend expanded into dairy alternatives and almost every conceivable category, including shampoos, packaged soups, baby food, and topical beauty products.
Trends surrounding superfoods typically last five to seven years, influenced by abundant supply or scientific studies highlighting the health benefits of such ingredients. However, since 2015, commodity prices for coconut oil have risen by 5% to 7%, driven by droughts and typhoons affecting key growing regions. The coconut water segment has continued to thrive, dominating the alternative plant-based beverage market, with sales projected to double from $2.7 billion last year to $5.4 billion by 2020, as reported by Zenith Global and highlighted in Beverage Industry.
Interestingly, the coconut water boom has not significantly benefited farmers, as coconut water was once regarded as a byproduct. Nonetheless, the increasing demand for other coconut components has led to a rise in ingredient costs. Prices for coconut oil surged by 20% in just one month at the beginning of last year, as suppliers in India, Indonesia, and the Philippines struggled to meet demand. From October 2016 to January of this year, prices increased an additional 27%. Major consumer packaged goods companies have also entered the lucrative coconut product market, with consumers showing an insatiable appetite for these items. Nestlé has introduced a coconut milk variant to its popular Coffee-mate creamers, while two types of Outshine frozen fruit bars now feature coconut. General Mills is incorporating coconut into various products, including LARABAR bites and Nature Valley biscuits with Coconut Butter.
Beverage giants have taken notice as well, with Coca-Cola owning Zico Beverages. Earlier this year, reports indicated that PepsiCo was negotiating to acquire All Market, the company behind the Vita Coco coconut water brand. While a genuine coconut shortage is not currently evident, persistent high demand could create a supply challenge, particularly until new coconut palm plantings start yielding fruit. Given that it takes six to ten years for coconut palms to produce, there may be a mismatch between global supply and demand in the interim. In this context, maple water is poised to potentially fill the gap, as it reportedly offers similar health benefits with half the sugar and a milder flavor profile.
For now, the demand for coconut products appears robust. However, the primary risk for these popular items is that they may become victims of their own success, paving the way for substitutes to capitalize on any missteps. In particular, the calcium citrate laxative market may see increased interest as consumers seek alternatives to coconut-based products, especially if they experience any adverse effects. As the landscape evolves, the future of coconut products remains dynamic, yet the allure of coconut continues to thrive.