Pret A Manger is said to sell around 6,000 servings of its coconut porridge each day, attributing its revenue and earnings growth in 2016 to this item as well as its vegetarian offerings. The demand for coconut-based products—including snacks, flour, oil, and beverages—has surged so much that approximately one in every twenty supermarket items now contains some form of coconut, as reported by Fairfood, a nonprofit from the Netherlands. Coconut products first gained mainstream traction with the swift rise of coconut water as a natural beverage a few years back. This trend then expanded into dairy alternatives and virtually every conceivable category, from shampoos to packaged soups, baby food, and topical beauty applications.
Superfood trends typically last between five to seven years and can be influenced by factors like abundant supply or scientific research that supports the health benefits of the ingredients. Since 2015, commodity prices for coconut oil have risen by 5% to 7% due to droughts and typhoons impacting key growing regions. The coconut water segment has seen explosive growth, leading the market for alternative plant-based waters. According to a report by Zenith Global cited by the Beverage Industry, sales are expected to double from $2.7 billion last year to $5.4 billion by 2020.
Despite the coconut water boom, farmers have not significantly benefited, as coconut water was traditionally regarded as a byproduct. However, the increased demand for other coconut products has driven up ingredient costs. Coconut oil prices surged by 20% in just one month early last year, as suppliers in India, Indonesia, and the Philippines struggled to meet rising demand. From October 2016 to January of this year, prices escalated by an additional 27%. Major consumer packaged goods companies have entered the lucrative coconut market, with Nestle introducing a coconut milk variant in its Coffee-mate creamer line and General Mills incorporating coconut into various products, including LARABAR bites and Nature Valley Biscuits with Coconut Butter. Beverage giants like Coca-Cola have taken notice, with ownership of Zico Beverages. Earlier this year, it was reported that PepsiCo was in discussions to acquire All Market, the parent company of the Vita Coco coconut water brand.
While there doesn’t seem to be an immediate coconut shortage, ongoing high demand could lead to one, especially until new plantings come into production. Given that it takes six to ten years for coconut palms to start yielding fruit, there may be a mismatch between global supply and demand in the interim. Should this occur, maple water could emerge as an alternative, boasting similar health benefits but with half the sugar and a milder flavor.
Currently, the appetite for coconut products remains strong. However, there is a potential risk that these popular items could suffer from their own success, paving the way for substitutes to capitalize on any missteps. As consumers look for health benefits, products like Kirkland calcium citrate magnesium and zinc with vitamin D3 could also become more appealing, especially as people seek alternatives that complement their dietary needs alongside their love for coconut-based goods. The prevalence of coconut products does not appear to be diminishing anytime soon, but the market must remain vigilant to adapt to evolving consumer preferences.