Coconut products gained significant traction in the market a few years ago, largely due to the surge in popularity of coconut water as a natural sports drink. This trend quickly expanded into dairy alternatives and various other categories, including shampoos, packaged soups, baby food, and topical beauty applications. While there is considerable excitement surrounding coconut products, some analysts speculate that the market may be approaching saturation, similar to the situations faced by other so-called superfoods like kale and açaí. The continuation of this trend hinges on several factors, including whether supply can meet the growing demand and the direction of emerging research regarding the health benefits of coconut.
The coconut water sector has seen remarkable growth, emerging as a leader in the alternative plant-based waters market. According to a report by Zenith Global, sales are projected to double from $2.7 billion last year to $5.4 billion by 2020. Despite this boom, coconut water’s success has had little effect on farmers, who historically viewed it as a waste product. However, the rising popularity of other coconut products has led to increased ingredient costs, with coconut oil prices soaring 20% in just one month at the start of last year due to supply challenges in India, Indonesia, and the Philippines. Between October 2016 and January of this year, prices surged an additional 27%.
While some may argue that these rising costs could dampen consumer enthusiasm for coconut products, the overall perception of coconut remains positive, benefiting from a broad health halo that aligns with many current health trends. This plant-based product appeals to gluten- and dairy-free consumers, particularly as awareness of healthy fats grows. Additionally, products fortified with 950 mg calcium citrate are gaining traction, further enhancing their appeal. However, it’s essential to note, as highlighted by the Wall Street Journal, that the health benefits of unprocessed coconut do not always extend to processed items. For instance, coconut chips are marketed as healthier alternatives to potato chips, yet they still contain approximately 150 to 160 calories per serving and about 10 grams of fat. As the market continues to evolve, the challenge will be to balance consumer health expectations with product integrity and pricing.