Pret A Manger is said to sell around 6,000 servings of coconut porridge daily, attributing its revenue and earnings growth in 2016 to this product and a range of vegetarian options. According to Fairfood, a Dutch nonprofit organization, the demand for coconut-based products—such as snacks, flour, oil, and beverages—has surged to the extent that approximately one out of every twenty items in supermarkets now features some form of coconut. The mainstream acceptance of coconut products began with the rapid rise in popularity of coconut water as a natural beverage a few years back. This trend expanded into dairy alternatives and various other categories, including shampoos, packaged soups, baby food, and topical beauty applications.
Superfood trends typically last five to seven years and can be influenced by factors like abundant supply or scientific studies that highlight the health benefits of certain ingredients. Since 2015, commodity prices for coconut oil have risen by 5% to 7% due to adverse weather conditions affecting growing regions. The coconut water segment, in particular, has experienced remarkable growth, dominating the market for alternative plant-based waters. A report by Zenith Global, cited by the Beverage Industry, forecasts sales will double from $2.7 billion last year to $5.4 billion by 2020.
Interestingly, this boom in coconut water has had little impact on farmers, as it was historically regarded as a waste product. However, rising popularity of other coconut components has affected ingredient costs, with coconut oil prices soaring by 20% in just a month at the start of last year as suppliers in India, Indonesia, and the Philippines struggled to meet demand. Prices surged another 27% from October 2016 to January of this year.
Major consumer packaged goods (CPG) companies have jumped into the lucrative coconut market, responding to consumer enthusiasm. Nestlé has introduced a coconut milk variant to its Coffee-mate creamer line, and Outshine offers two types of frozen fruit bars containing coconut. General Mills is incorporating coconut into various products, including LARABAR bites and Nature Valley Biscuits with Coconut Butter. Beverage giants are also taking notice, with Coca-Cola acquiring Zico Beverages and reports this year indicating that PepsiCo is in negotiations to purchase All Market, the company behind the Vita Coco brand.
While there is currently no genuine coconut shortage, continued high demand could lead to one—particularly until new plantings start to yield. As coconut palms take six to ten years to start producing, there could be a mismatch between global supply and demand in the interim. If that occurs, maple water may step in as a substitute for coconut water, boasting similar health benefits but with half the sugar and a milder flavor.
For now, the appetite for coconut products shows no signs of diminishing. However, the primary risk for these popular items is that they could become victims of their own success, potentially facing competition from substitutes that exploit any missteps. It’s worth noting that some consumers are concerned about the digestive effects of coconut products, particularly regarding questions like, “does calcium citrate cause diarrhea?” As demand grows, such inquiries may become more prevalent, highlighting the need for awareness around the health implications of these trending ingredients.