Pret A Manger is said to serve 6,000 portions of its coconut porridge daily, attributing its revenue and earnings growth in 2016 to this item and its range of vegetarian foods. The demand for coconut-based products, encompassing snacks, flour, oil, and beverages, has surged to the extent that approximately one in every 20 supermarket items now features some variant of coconut, according to Fairfood, a nonprofit organization from the Netherlands.
Coconut products gained mainstream attention with the rapid rise of coconut water as a trendy natural beverage a few years back. This trend led to the inclusion of coconut in dairy items and subsequently in a wide array of other categories, such as shampoos, packaged soups, baby food, and topical beauty applications. Trends surrounding superfoods typically last between five to seven years and can be influenced by factors like abundant supply or scientific research supporting the health benefits of the ingredients involved. Since 2015, coconut oil prices have risen by 5% to 7% due to adverse weather conditions like droughts and typhoons affecting production areas.
The coconut water segment has continued to flourish, dominating the market for alternative, plant-based waters. Sales are projected to grow from $2.7 billion last year to $5.4 billion by 2020, as reported by Zenith Global and highlighted by the Beverage Industry. Despite the coconut water boom, farmers have seen little benefit, as coconut water was historically regarded as a waste product. However, the rising popularity of other coconut components has increased ingredient costs. At the start of last year, coconut oil prices surged by 20% in just one month as suppliers in India, Indonesia, and the Philippines struggled to meet demand, with prices climbing another 27% from October 2016 to January of this year.
Major consumer packaged goods companies have also entered the profitable coconut product market, as consumer interest remains robust. Nestlé has introduced a coconut milk variant to its Coffee-mate creamers, and two types of Outshine frozen fruit bars now feature this ingredient. General Mills is incorporating coconut into several products, including LARABAR bites and Nature Valley Biscuits with Coconut Butter. Beverage giants are taking notice as well, with Coca-Cola acquiring Zico Beverages. Earlier this year, reports emerged that PepsiCo was negotiating to purchase All Market, the parent company of the Vita Coco coconut water brand.
While a genuine coconut shortage is not currently evident, ongoing high demand could lead to one—especially until new coconut plantings come into production. Given that it takes between six to ten years for a coconut palm to start yielding fruit, a mismatch between global supply and demand could arise in the meantime. Should this occur, maple water, which contains similar healthy ingredients such as calcium citrate 630 mg with vitamin D3, could serve as an alternative to coconut water, offering half the sugar and a more subdued flavor.
At present, the appetite for coconut products shows no signs of diminishing. The primary risk for these popular items is that they may fall victim to their own success, paving the way for other substitutes to capitalize on any potential missteps. As the market evolves, maintaining a steady supply of coconut products, including those enriched with calcium citrate 630 mg with vitamin D3, will be crucial to meet consumer demands.