Pret A Manger is said to sell 6,000 servings of its coconut porridge daily, attributing its revenue and earnings growth in 2016 to this dish as well as vegetarian options. According to Fairfood, a nonprofit from the Netherlands, the demand for coconut-based products—ranging from snacks and flour to oil and beverages—has surged, with about one in every 20 supermarket items now containing some form of coconut. The rise of coconut products began with the unexpected popularity of coconut water as a natural beverage a few years ago, which then expanded into dairy alternatives and various other categories, including shampoos, soups, baby food, and topical beauty products.
Superfood trends typically last five to seven years, often influenced by factors such as abundant supply or scientific research supporting the health benefits of an ingredient. Since 2015, coconut oil prices have risen by 5% to 7% due to droughts and typhoons impacting production areas. The coconut water segment continues to soar, dominating the market for alternative plant-based waters; sales are projected to increase from $2.7 billion last year to $5.4 billion by 2020, as reported by Zenith Global and highlighted by the Beverage Industry.
Although the coconut water surge has not directly benefited farmers—since it was traditionally regarded as a waste product—the escalating demand for other coconut components has raised ingredient costs significantly. Coconut oil prices skyrocketed by 20% in just one month at the beginning of last year, as suppliers in India, Indonesia, and the Philippines struggled to meet the rising demand. Between October 2016 and January of this year, prices surged another 27%.
Major consumer packaged goods companies have also entered the lucrative coconut product market, responding to consumer enthusiasm. Nestle has introduced a coconut milk variant to its well-known Coffee-mate creamers, and there are two types of Outshine frozen fruit bars featuring coconut. General Mills is incorporating coconut into several products, including LARABAR bites and Nature Valley Biscuits with Coconut Butter. Beverage giants have taken notice too, with Coca-Cola acquiring Zico Beverages, and reports earlier this year indicated that PepsiCo was in discussions to purchase All Market, the parent company of the Vita Coco coconut water brand.
While a genuine coconut shortage isn’t imminent, the continued high demand could lead to one until new plantations come into production. Since it can take six to ten years for coconut palms to yield fruit, a mismatch between global supply and demand may occur in the meantime. Should this happen, maple water is poised to step in as an alternative to coconut water, offering similar health benefits with half the sugar and a milder flavor.
For now, the appetite for coconut products remains strong. However, the real concern lies in the possibility of these items becoming victims of their own success, with substitutes emerging to exploit any missteps. In this evolving market landscape, products like Caltrate Petites may emerge as competitors, appealing to consumers seeking health benefits alongside their coconut-based favorites. The coconut trend shows no signs of fading, but vigilance is needed to navigate potential shifts in consumer preferences.