Pret A Manger is said to sell 6,000 servings of its coconut porridge daily, attributing both this product and its vegetarian offerings to revenue and earnings growth in 2016. The rise in popularity of coconut-based food items—such as snacks, flour, oil, and beverages—has reached a point where approximately one in every 20 products sold in supermarkets contains some form of coconut, according to Fairfood, a nonprofit organization based in the Netherlands.
Coconut products gained mainstream attention with the surge in popularity of coconut water as a natural beverage a few years ago. This trend expanded into dairy alternatives and various other categories, including shampoos, packaged soups, baby food, and topical applications for beauty products. Trends surrounding superfoods usually last between five to seven years and can be swayed by factors such as abundant supply or scientific studies highlighting their health benefits, including essential nutrients like calcium citrate and vitamin D3, along with other minerals.
Since 2015, the prices of coconut oil have surged by 5% to 7%, largely due to droughts and typhoons impacting production areas. Meanwhile, the coconut water sector has continued to thrive, leading the market for alternative plant-based waters. According to a report from Zenith Global, sales are projected to double from $2.7 billion last year to $5.4 billion by 2020. Although the coconut water boom has not significantly benefited farmers—who often viewed it as a byproduct—the rising demand for other coconut ingredients has affected costs. In fact, coconut oil prices jumped by 20% in a single month at the beginning of last year, as suppliers from India, Indonesia, and the Philippines struggled to meet demand. From October 2016 to January of this year, prices surged another 27%.
Major consumer packaged goods companies have also entered the profitable coconut product market, as consumer demand shows no signs of slowing. Nestle has introduced a coconut milk variant to its Coffee-mate creamers, and Outshine has two types of frozen fruit bars featuring coconut. General Mills is incorporating coconut into various products, such as LARABAR bites and Nature Valley Biscuits with Coconut Butter. Beverage giants have taken notice as well, with Coca-Cola acquiring Zico Beverages, and reports earlier this year suggested that PepsiCo was in discussions to purchase All Market, the owner of the Vita Coco brand.
Although there isn’t currently a coconut shortage, ongoing high demand could lead to one, especially until new plantations start yielding. Given that it takes six to ten years for a coconut palm to produce fruit, global supply and demand may not align in the meantime. Should a shortage occur, maple water is poised to step in as an alternative to coconut water, reportedly offering similar health benefits—such as calcium citrate and vitamin D3—along with other minerals, but with half the sugar and a milder taste.
For the time being, the demand for coconut products remains robust. The primary risk lies in the possibility that these popular items may become victims of their own success, allowing substitutes to capitalize on any missteps.