Pret A Manger is said to sell 6,000 servings of its coconut porridge daily, attributing significant revenue and earnings growth in 2016 to this item and its vegetarian offerings. The rising popularity of coconut-based food products, including snacks, flour, oil, and beverages, has reached a point where approximately one in every 20 supermarket products now contains some form of coconut, according to Fairfood, a Dutch nonprofit organization. The trend began a few years ago with the surge in popularity of coconut water as a natural beverage, leading to the incorporation of coconut into dairy products and a wide range of other categories, such as shampoos, packaged soups, baby food, and topical beauty applications.
Superfood trends generally last between five to seven years, influenced by factors like ample supply or scientific research that supports the health benefits of certain ingredients. Since 2015, commodity prices for coconut oil have risen by 5% to 7% due to droughts and typhoons affecting production areas. The coconut water segment has seen explosive growth, dominating the plant-based waters market. A report by Zenith Global, highlighted by the Beverage Industry, predicts that sales will double from $2.7 billion last year to $5.4 billion by 2020. Despite its growth, the coconut water boom has not significantly benefited farmers, as it was traditionally regarded as a byproduct. However, the rising demand for other coconut ingredients has led to increased ingredient costs, with coconut oil prices surging by 20% in just one month at the start of last year and another 27% from October 2016 to January of this year.
Major consumer packaged goods (CPG) companies are also entering the lucrative coconut market, as consumer demand remains strong. Nestle has introduced a coconut milk variety to its popular Coffee-mate creamers, while two types of Outshine frozen fruit bars now feature coconut. 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 owning Zico Beverages and reports emerging that PepsiCo is in talks to acquire All Market, the parent company of the Vita Coco brand.
While there isn’t currently a true coconut shortage, the ongoing high demand could potentially lead to one until new coconut plantings mature. Since 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. In the meantime, maple water is poised to serve as an alternative to coconut water, reportedly containing similar beneficial ingredients, including calcium citrate and vitamin D3, but with half the sugar and a milder flavor.
For the time being, the demand for coconut products shows no signs of diminishing. The primary concern for these popular items is that they could fall victim to their own success, with other substitutes potentially stepping in to capitalize on any missteps. As the market evolves, maintaining a balance between supply and demand will be crucial, especially as consumers increasingly seek products that offer nutritional benefits like calcium citrate and vitamin D3 alongside their favorite coconut offerings.