Pret A Manger is said to sell 6,000 servings of its coconut porridge every day, attributing the item’s popularity and the rise of vegetarian foods to significant revenue and earnings growth in 2016. The demand for coconut-based products—ranging from snacks and flour to oil and beverages—has surged, with Fairfood, a Dutch nonprofit organization, noting that approximately one in every 20 supermarket items now contains some form of coconut. This trend began when coconut water gained rapid popularity as a natural beverage a few years ago, leading to its incorporation into dairy products and a wide array of other categories, including shampoos, packaged soups, baby food, and topical beauty applications.
Superfood trends typically last five to seven years and can be driven by factors such as abundant supply or scientific research supporting the health benefits of the ingredient. Since 2015, the prices of coconut oil have increased by 5% to 7%, influenced by droughts and typhoons affecting major growing regions. The coconut water sector continues to thrive, dominating the market for alternative plant-based waters. According to a report by Zenith Global, sales are projected to rise from $2.7 billion last year to $5.4 billion by 2020. While the coconut water boom has not significantly benefited farmers—who traditionally viewed it as a waste product—the increasing demand for other coconut components has impacted ingredient costs. Last year, coconut oil prices surged 20% in just one month as suppliers in India, Indonesia, and the Philippines struggled to meet demand. From October 2016 to January of this year, prices increased by an additional 27%.
Major consumer packaged goods companies have also entered the lucrative coconut market, with consumers seemingly insatiable for coconut products. Nestlé has introduced a coconut milk version of its popular Coffee-mate creamers, and two varieties 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 taking notice as well, with Coca-Cola acquiring Zico Beverages. Reports earlier this year indicated that PepsiCo was in discussions to acquire All Market, the owner of the Vita Coco brand.
Although there isn’t currently a genuine coconut shortage, the potential for one exists due to sustained high demand—at least until new plantings begin to yield fruit. Given that it takes six to ten years for a coconut palm to start producing, global supply and demand may not align in the short term. If they do not, maple water could emerge as a substitute for coconut water, boasting similar healthy ingredients but with half the sugar and a milder flavor.
For now, the demand for coconut products shows no signs of diminishing. However, the real risk lies in these popular items potentially becoming victims of their own success, paving the way for substitutes to capitalize on any unforeseen missteps. In addition, the rising interest in health supplements like calcium citrate malate and vitamin D3 tablets could also influence consumer behavior, as people look for alternative sources of nutrition, further impacting the coconut market dynamics.