Pret A Manger is said to sell 6,000 servings of its coconut porridge daily and has credited this product, along with its vegetarian offerings, for boosting revenue and earnings growth in 2016. The demand for coconut-based food products, including snacks, flour, oil, and beverages, has surged to the extent that approximately one in every 20 goods sold in supermarkets now contains some form of coconut, according to Fairfood, a nonprofit organization based in the Netherlands. Coconut products first gained mainstream attention with the rise of coconut water as a popular natural beverage a few years ago. This trend quickly expanded into dairy alternatives and other categories, including shampoos, packaged soups, baby food, and topical beauty products.
Superfood trends typically last five to seven years and can be influenced by factors such as abundant supply or scientific research supporting the health benefits of specific ingredients. Since 2015, commodity prices for coconut oil have risen by 5% to 7% due to droughts and typhoons impacting key growing regions. The coconut water segment has experienced explosive growth, leading the market for alternative plant-based waters. 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, the impact on farmers has been minimal, as coconut water was historically viewed as a byproduct. However, the rising popularity of other coconut components has significantly influenced ingredient costs. At the beginning of last year, coconut oil prices surged by 20% within a month as suppliers in India, Indonesia, and the Philippines struggled to meet demand. Between October 2016 and January of this year, prices soared an additional 27%.
Major consumer packaged goods (CPG) companies have also entered the lucrative coconut product market, as consumer interest continues to grow. Nestlé has introduced a coconut milk variant in its popular Coffee-mate creamer line, while there are two Outshine frozen fruit bars featuring coconut. General Mills is also 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 acquiring Zico Beverages, and reports emerging that PepsiCo is in discussions to buy All Market, the owner of the Vita Coco coconut water brand.
Although there is currently no genuine coconut shortage, the ongoing high demand may lead to one before new plantations become productive. Given that it takes six to ten years for a coconut palm to start yielding fruit, a mismatch between supply and demand could occur during this period. If such a situation arises, maple water could emerge as an alternative to coconut water, offering similar health benefits with half the sugar and a more delicate flavor profile.
For now, the appetite for coconut products shows no signs of diminishing. The primary risk for these popular items is that they might fall victim to their own success, with potential substitutes taking advantage of any missteps. As the market evolves, products fortified with nutrients such as douglas calcium citrate may gain traction, reflecting the ongoing trend toward health-conscious consumer choices.