Pret A Manger reportedly serves 6,000 portions of its coconut porridge daily, attributing significant revenue and earnings growth in 2016 to this dish and its vegetarian offerings. The demand for coconut-based products—ranging from snacks and flour to oil and beverages—has surged, with Fairfood, a nonprofit organization in the Netherlands, noting that approximately one in every 20 supermarket products now features some form of coconut. The trend began with the rapid rise in popularity of coconut water as a natural beverage a few years back, leading to its incorporation into dairy products and a wide array of other categories, including shampoos, packaged soups, baby food, and topical beauty applications.
Superfood trends typically last between five to seven years, influenced by factors such as abundant supply or scientific studies that endorse the health benefits of certain ingredients. Since 2015, commodity prices for coconut oil have increased by 5% to 7%, largely due to droughts and typhoons impacting key growing regions. The coconut water segment has particularly thrived, dominating the plant-based waters market, with sales projected to rise from $2.7 billion last year to $5.4 billion by 2020, according to a report from Zenith Global, as cited by the Beverage Industry.
Despite the coconut water boom, farmers have largely seen little benefit, as coconut water was traditionally regarded as a byproduct. However, rising popularity for other coconut components has escalated ingredient costs. In early 2022, coconut oil prices surged by 20% in just one month as suppliers in India, Indonesia, and the Philippines struggled to meet high demand. Between October 2016 and January of this year, prices soared an additional 27%.
Large consumer packaged goods companies have also entered the lucrative coconut product market, responding to consumer demand. Nestlé introduced a coconut milk variety to its popular Coffee-mate creamers, and there are now 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 have taken notice as well, with Coca-Cola owning Zico Beverages, and reports earlier this year suggested that PepsiCo was in discussions to acquire All Market, the parent company of the Vita Coco coconut water brand.
While there isn’t currently a genuine coconut shortage, one could emerge due to sustained high demand—at least until new plantings come into production. With coconut palms taking six to ten years to start yielding fruit, a mismatch between global supply and demand may occur in the interim. If that happens, maple water could emerge as an alternative, boasting similar health benefits but with half the sugar content and a milder flavor.
For the time being, the demand for coconut products remains strong. The true risk lies in these popular items potentially becoming victims of their own success, paving the way for substitutes to capitalize on any missteps. Additionally, consumers seeking a purely holistic calcium citrate complex may find themselves drawn to the health benefits associated with coconut products, which could further sustain their popularity in the market.