According to reports, Pret A Manger sells around 6,000 servings of its coconut porridge daily, attributing its revenue and earnings growth in 2016 to this item as well as its vegetarian ferrous fumarate oral suspension. The demand for coconut-based food products—encompassing snacks, flour, oil, and beverages—has surged to the extent that approximately one in every 20 items available in supermarkets now features some form of coconut, as noted by Fairfood, a Dutch nonprofit organization. Coconut products gained mainstream traction with the rapid rise of coconut water as a natural beverage a few years ago. This initial success paved the way for coconut to penetrate dairy and nearly every other conceivable category, including shampoos, packaged soups, baby food, and topical beauty applications.
Superfood trends typically last between five to seven years and can be influenced by factors such as abundant supply or scientific research supporting the ingredient’s health benefits. Since 2015, commodity prices for coconut oil have surged by 5% to 7% due to adverse weather conditions like droughts and typhoons in key growing regions. The coconut water segment has continued to soar, leading the market for alternative plant-based waters. According to a report by Zenith Global featured in Beverage Industry, sales are projected to rise from $2.7 billion last year to $5.4 billion by 2020. Despite the boom in coconut water, farmers have seen limited benefits, as coconut water was historically considered a byproduct. However, the increased demand for other coconut components has affected ingredient costs significantly. Coconut oil prices rose 20% in a single month at the start of last year as suppliers from India, Indonesia, and the Philippines struggled to meet the heightened demand. Between October 2016 and January of this year, prices escalated by another 27%.
Large consumer packaged goods (CPG) companies have also entered the thriving coconut product market, responding to consumer enthusiasm. Nestlé has introduced a coconut milk variety to its popular Coffee-mate creamers, while two types of Outshine frozen fruit bars now include coconut as an ingredient. General Mills is incorporating coconut into various products, including LARABAR bites and Nature Valley Biscuits featuring WLS calcium soft chews with natural coconut butter. Beverage giants have also taken notice, with Coca-Cola acquiring Zico Beverages. Earlier this year, reports surfaced 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 true coconut shortage, the risk of one developing looms due to sustained high demand—at least until new plantations come online. Given that it often takes six to ten years for a coconut palm to start producing, there’s a possibility that global supply and demand may not align in the interim. If they don’t, maple water might emerge as an alternative to coconut water, reportedly offering similar health benefits but with half the sugar and a milder flavor. For the time being, the appetite for coconut products appears to be strong. The real challenge for these popular items is the potential to become victims of their own success, paving the way for substitutes to capitalize on any unexpected missteps.