Pret A Manger is said to sell around 6,000 portions of its coconut porridge daily, attributing its revenue and earnings growth in 2016 to this item as well as vegetarian offerings. The rise in popularity of coconut-based products, such as snacks, flour, oil, and beverages, has reached a point where approximately one in every twenty supermarket items now includes some form of coconut, according to Fairfood, a Netherlands-based nonprofit organization. The trend began with the sudden rise of coconut water as a natural drink a few years ago, which then expanded into dairy products and virtually every other category, including shampoos, packaged soups, baby food, and topical beauty applications.
Superfood trends typically last between five to seven years, often influenced by factors like abundant supply or scientific studies supporting the ingredient’s health benefits. Since 2015, coconut oil prices have increased by 5% to 7% due to droughts and typhoons impacting production areas. The coconut water sector has also experienced explosive growth, leading the market for alternative plant-based waters. According to a report by Zenith Global, sales are projected to double from $2.7 billion last year to $5.4 billion by 2020.
Interestingly, the coconut water boom has had little effect on farmers, as coconut water was traditionally regarded as a byproduct. However, the rising demand for various coconut components has driven ingredient costs higher. At the beginning of last year, coconut oil prices surged 20% in one month as suppliers in India, Indonesia, and the Philippines struggled to meet demand. From October 2016 to January of this year, prices climbed an additional 27%.
Major consumer packaged goods (CPG) companies have entered the profitable coconut market, drawn by consumer enthusiasm. Nestlé has introduced a coconut milk variant to its popular Coffee-mate creamers, and there are two types of Outshine frozen fruit bars featuring coconut. General Mills is incorporating coconut into various products, including LARABAR bites and Nature Valley Biscuits with Coconut Butter. Beverage giants like Coca-Cola have also taken notice, with ownership of Zico Beverages, while PepsiCo has been rumored to be in talks to acquire All Market, the company behind the Vita Coco brand.
While there isn’t currently a coconut shortage, the high demand could lead to one, especially until new plantings are fully productive. Given that it takes six to ten years for a coconut palm to yield fruit, global supply and demand may not align in the short term. In that scenario, maple water could emerge as an alternative to coconut water, boasting similar health benefits but with half the sugar and a milder taste.
For now, the appetite for coconut products remains robust. However, the main risk for these popular items is that they might fall victim to their own success, paving the way for substitutes to exploit any unexpected shortcomings. In the meantime, consumers might consider options like calcium citrate with vitamin D petites, which could serve as a nutritious complement to their diets alongside coconut products.