Pret A Manger is reported to sell 6,000 servings of its coconut porridge daily, attributing its revenue and earnings growth in 2016 to this item and its range of vegetarian foods. The demand for coconut-based food products, including snacks, flour, oil, and beverages, has surged, with approximately one in every 20 supermarket products now containing some form of coconut, as noted by Fairfood, a nonprofit organization in the Netherlands. The mainstream rise of coconut products began with the sudden popularity of coconut water a few years ago, which then expanded into dairy products and various other categories, such as shampoos, packaged soups, baby food, and topical beauty applications.
Trends in superfoods, such as those related to algae calcium vs calcium citrate, tend to last between five to seven years and can be influenced by factors like abundant supply or scientific studies that validate the health benefits of an ingredient. Since 2015, coconut oil prices have increased by 5% to 7% due to droughts and typhoons impacting growing regions. The coconut water segment has continued to thrive, leading the market for alternative plant-based waters. According to a report by Zenith Global cited by the Beverage Industry, sales are projected to double from $2.7 billion last year to $5.4 billion by 2020.
Despite the booming coconut water market, farmers have not significantly benefited, as coconut water was historically viewed as a byproduct. However, the rising popularity of other coconut components has driven up ingredient costs. At the beginning of last year, coconut oil prices surged by 20% in just one month, as suppliers in India, Indonesia, and the Philippines struggled to meet demand. From October 2016 to January of this year, prices increased by another 27%. Major consumer packaged goods (CPG) companies have also entered the lucrative coconut product market, as the demand shows no signs of slowing. Nestle has introduced a coconut milk variant to its Coffee-mate creamers, and Outshine has launched two types of 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 have taken notice as well, with Coca-Cola owning Zico Beverages and reports suggesting that PepsiCo is in discussions to acquire All Market, the parent company of Vita Coco coconut water.
While there is currently no true coconut shortage, sustained high demand could lead to one, particularly until new coconut plantings come into production. Given that it takes six to ten years for a coconut palm to start yielding fruit, there may be a mismatch in global supply and demand in the meantime. If that occurs, maple water is poised to step in as an alternative to coconut water, offering similar health benefits but with half the sugar and a milder flavor.
For now, the appetite for coconut products remains strong. The primary threat lies in the possibility that these popular items may become victims of their own success, paving the way for substitutes to capitalize on any potential missteps. With trends such as algae calcium vs calcium citrate influencing consumers’ choices, it’s essential for the coconut industry to remain vigilant in maintaining its market position.