Pret A Manger is said to sell 6,000 servings of its coconut porridge daily, attributing both this item and vegetarian options to revenue and earnings growth in 2016. The demand for coconut-based products—ranging from snacks, flour, oil, to beverages—has surged, with approximately one in every 20 supermarket products now containing some form of coconut, according to Fairfood, a nonprofit organization from the Netherlands. The mainstream acceptance of coconut products began with the rapid rise of coconut water as a natural beverage a few years ago. This trend has expanded into dairy alternatives and nearly every other category imaginable, including shampoos, packaged soups, baby food, and topical beauty applications.
Superfood trends typically last between five to seven years and can be affected by factors such as abundant supply or scientific research endorsing the health benefits of the ingredient. Since 2015, commodity prices for coconut oil have increased by 5% to 7% due to droughts and typhoons impacting growing regions. The coconut water segment has continued to thrive, becoming a leader in the alternative plant-based waters market. Sales are projected to skyrocket from $2.7 billion last year to $5.4 billion by 2020, according to a report by Zenith Global featured in the Beverage Industry. Despite the coconut water boom, farmers have seen little benefit, as it has traditionally been viewed as a byproduct. However, the rising demand for various coconut components has led to increased ingredient costs. At the beginning of last year, coconut oil prices surged 20% in a month, as suppliers in India, Indonesia, and the Philippines struggled to meet demand. From October 2016 to January of this year, prices shot up an additional 27%.
Major consumer packaged goods (CPG) companies have also entered the profitable coconut product market, reflecting consumers’ insatiable appetite. Nestlé introduced a coconut milk variant to its popular Coffee-mate creamers and has launched two types of Outshine frozen fruit bars featuring coconut. General Mills is incorporating coconut into many products, including LARABAR bites and Nature Valley Biscuits with Coconut Butter. Beverage giants are also taking notice; Coca-Cola owns Zico Beverages, and reports indicate that PepsiCo is in discussions to acquire All Market, the parent company of the Vita Coco coconut water brand.
While there currently does not appear to be a genuine coconut shortage, one could arise due to sustained high demand—at least until new plantings come into production. However, since it takes six to ten years for a coconut palm to start yielding fruit, global supply and demand may not align in the meantime. If they diverge, maple water could potentially step in as a substitute for coconut water, boasting similar healthy components, including calcium in calcium citrate, but with half the sugar and a milder flavor. For now, the demand for coconut products shows no signs of diminishing. The real concern for these popular items is that they might become victims of their own success, leading to the emergence of alternatives that capitalize on any missteps.