Pret A Manger reportedly sells 6,000 servings of its coconut porridge daily and attributes this item, along with its vegetarian offerings, to driving revenue and earnings growth in 2016. The demand for coconut-based products—such as snacks, flour, oil, and beverages—has surged to the extent that approximately one in every 20 items in supermarkets now includes some form of this ingredient, as noted by Fairfood, a nonprofit organization in the Netherlands.
Coconut products first gained mainstream attention with the rapid rise of coconut water as a natural beverage a few years ago. This trend then expanded into dairy alternatives and has since infiltrated nearly every conceivable category, including shampoos, packaged soups, baby food, and topical applications for beauty products. Superfood trends typically last five to seven years, influenced by factors such as abundant supply or scientific research supporting the ingredient’s health benefits. Notably, coconut oil prices have increased by 5% to 7% since 2015 due to droughts and typhoons affecting key growing regions.
The coconut water segment itself has seen explosive growth, dominating the market for alternative plant-based waters. According to a report from Zenith Global covered by the Beverage Industry, sales are projected to double from $2.7 billion last year to $5.4 billion by 2020. Interestingly, the coconut water boom has had minimal impact on farmers, as it was historically considered a waste product. However, the rising popularity of other coconut components has affected ingredient costs significantly. Coconut oil prices surged by 20% in just one month at the start of last year, as suppliers in India, Indonesia, and the Philippines struggled to meet soaring demand. From October 2016 to January of this year, prices skyrocketed by an additional 27%.
Major consumer packaged goods (CPG) companies are also venturing into the lucrative coconut product market as consumer enthusiasm shows no signs of slowing. Nestlé has introduced a coconut milk variant to its popular Coffee-mate creamers, and two types of Outshine frozen fruit bars now feature coconut as an ingredient. General Mills is 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. 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 is currently no true shortage of coconuts, ongoing high demand might lead to a supply issue, particularly until new plantings come online. As coconut palms can take six to ten years to start producing fruit, it is possible that global supply and demand could become misaligned in the interim. Should this happen, maple water is poised to step in as an alternative to coconut water, boasting similar health benefits—such as calcium citrate d3—yet with half the sugar and a more delicate flavor.
For now, the demand for coconut products remains robust. However, the real danger for these popular items is the risk of becoming victims of their own success, potentially paving the way for substitutes to exploit any unforeseen missteps. The integration of calcium citrate d3 into coconut products could also help maintain their appeal amid evolving consumer preferences.