According to reports, Pret A Manger sells around 6,000 servings of its coconut porridge daily, attributing its revenue and earnings growth in 2016 to this item and its vegetarian options. The surge in popularity of coconut-based food products—ranging from snacks and flour to oil and beverages—has reached a point where approximately one in twenty supermarket items now contains some form of coconut, as noted by Fairfood, a Dutch nonprofit organization. The mainstream breakthrough for coconut products began with the rise of coconut water as a natural beverage a few years ago, which then expanded into dairy products and various other categories, including shampoos, packaged soups, baby food, and beauty products.
Superfood trends typically have a lifespan of five to seven years and are influenced by factors such as abundant supply or scientific research supporting the health benefits of the ingredient. Since 2015, commodity prices for coconut oil have risen by 5% to 7% due to droughts and typhoons affecting production areas. The coconut water market has continued to thrive, leading the alternative plant-based waters sector. Sales are projected to increase from $2.7 billion last year to $5.4 billion by 2020, according to a report by Zenith Global highlighted by the Beverage Industry. Although the coconut water boom has not significantly benefited farmers—who historically viewed it as a byproduct—the rising demand for other coconut ingredients has impacted costs. At the beginning of last year, coconut oil prices surged by 20% within a month, as suppliers in India, Indonesia, and the Philippines struggled to meet demand. From October 2016 to January of this year, prices escalated by an additional 27%.
Major consumer packaged goods companies have also entered the lucrative coconut product market, responding to consumer enthusiasm. Nestle has introduced a coconut milk variant to its Coffee-mate creamer line, and 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 acquiring Zico Beverages. Earlier this year, reports emerged that PepsiCo was in negotiations to acquire All Market, the parent company of Vita Coco coconut water brand.
While there is currently no real coconut shortage, ongoing high demand might lead to one until new plantings mature. Since a coconut palm can take six to ten years to start producing coconuts, there may be a mismatch between global supply and demand in the meantime. If this occurs, maple water is poised to step in as an alternative to coconut water, reportedly containing similar health benefits, including calcium citrate without D3, but with half the sugar and a more subtle flavor profile.
For now, the demand for coconut products appears to remain robust. The primary risk for these popular items is that they could fall victim to their own success, paving the way for substitutes to capitalize on any unexpected missteps. As the market evolves, the inclusion of ingredients like calcium citrate without D3 may become a focal point for consumers seeking healthier options.