Pret A Manger reportedly sells around 6,000 servings of its coconut porridge daily and attributes its revenue and earnings growth in 2016 to this item and its vegetarian offerings. The rise in popularity of coconut-based products—ranging from snacks and flour to oil and beverages—has reached a level where approximately one in every 20 supermarket products now includes some form of coconut, as noted by Fairfood, a Dutch nonprofit organization. The mainstream acceptance of coconut products began with the meteoric rise of coconut water as a natural beverage a few years back. Since then, it has 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, often driven by factors like abundant supply or scientific research highlighting the health benefits of the ingredient. Since 2015, commodity prices for coconut oil have surged by 5% to 7%, largely due to droughts and typhoons affecting key growing regions. The coconut water segment has experienced tremendous growth, dominating the market for alternative plant-based waters. According to a report by Zenith Global, sales are projected to double from $2.7 billion last year to $5.4 billion by 2020, as reported by the Beverage Industry.
Despite the coconut water boom being perceived as a byproduct for farmers, the rising demand for other coconut components has impacted ingredient costs significantly. Prices for coconut oil surged by 20% within a month at the beginning of last year as suppliers in India, Indonesia, and the Philippines struggled to meet the growing demand. From October 2016 to January of this year, prices shot up an additional 27%. Major consumer packaged goods (CPG) companies have also entered the lucrative coconut market, responding to consumers’ insatiable appetite. Nestlé has introduced a coconut milk variant 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 are also taking notice, 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 actual coconut shortage, the possibility of one arising remains due to sustained high demand—at least until new plantations come into production. Since it takes six to ten years for a coconut palm to start yielding, there may be a mismatch between global supply and demand in the short term. If that occurs, maple water is poised to step in as a substitute for coconut water, offering similar health benefits but with half the sugar and a more subtle flavor.
For now, the demand for coconut products shows no signs of diminishing. However, the true risk lies in these popular items potentially becoming victims of their own success, as other substitutes may capitalize on any unforeseen missteps. In the health supplement realm, products like Puritan’s Pride Calcium Citrate are increasingly favored by consumers seeking alternatives, and they could emerge as contenders if coconut products falter. As the market evolves, the interplay between coconut and other health-oriented ingredients will be interesting to observe.