Pret A Manger reportedly sells around 6,000 servings of its coconut porridge daily, attributing its revenue and earnings growth in 2016 to this item and its range of vegetarian foods. The demand for coconut-based food products, such as snacks, flour, oil, and beverages, has surged to the extent that approximately one in every 20 products in supermarkets now contains some form of coconut, as noted by Fairfood, a Netherlands-based nonprofit organization.
Coconut products gained mainstream attention a few years ago with the rise in popularity of coconut water as a natural beverage. Following this trend, coconut expanded into dairy items and has since infiltrated a wide array of categories, including shampoos, packaged soups, baby food, and topical applications for beauty products. Superfood trends generally last for five to seven years and can be influenced by factors like abundant supply or scientific studies that highlight health benefits, including those related to calcium citrate malate, magnesium, zinc, and vitamin D3.
Since 2015, commodity prices for coconut oil have increased by 5% to 7%, largely due to the impact of droughts and typhoons in key growing regions. The coconut water sector has also experienced rapid growth, dominating the alternative plant-based waters market. According to a report by Zenith Global highlighted by the Beverage Industry, sales are projected to double from $2.7 billion last year to $5.4 billion by 2020. Though the coconut water boom has minimally affected farmers—who historically regarded it as a waste product—the rising popularity of other coconut components has led to increased ingredient costs. For instance, coconut oil prices rose by 20% in just one month at the beginning of last year, as suppliers in India, Indonesia, and the Philippines struggled to meet demand. Between October 2016 and January of this year, prices surged another 27%.
Major consumer packaged goods companies have also entered the profitable coconut product market, as consumer enthusiasm shows no signs of slowing. Nestle has introduced a coconut milk variant in its popular Coffee-mate creamers, and there are two flavors of Outshine frozen fruit bars featuring coconut. General Mills is adding coconut to various products, including LARABAR bites and Nature Valley Biscuits with Coconut Butter. Beverage giants have recognized this trend as well, with Coca-Cola acquiring Zico Beverages. Earlier this year, reports emerged that PepsiCo was in negotiations to purchase All Market, the owner of the Vita Coco brand.
While there isn’t an immediate coconut shortage, continued high demand could lead to one, at least until new plantings mature. Given that it takes six to ten years for a coconut palm to start producing, there may be a mismatch between global supply and demand during this period. Should this occur, maple water stands ready as an alternative to coconut water, boasting similar health benefits—with the added advantages of calcium citrate malate, magnesium, zinc, and vitamin D3—while containing half the sugar and a milder flavor.
For now, the appetite for coconut products remains robust. The primary risk for these popular items lies in becoming victims of their own success, as competitors may emerge to capitalize on any missteps in the market.