Pret A Manger is said to sell 6,000 servings of its coconut porridge daily, attributing both this dish and its vegetarian offerings to significant revenue and earnings growth in 2016. The demand for coconut-based food products—including snacks, flour, oil, and beverages—has surged to the extent that approximately one in every 20 supermarket items now includes some form of coconut, as reported by Fairfood, a nonprofit organization from the Netherlands. The mainstream acceptance of coconut products began with the rapid rise in popularity of coconut water as a natural beverage a few years ago. This led to an expansion into dairy products and eventually into a wide array of categories, such as shampoos, 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 highlighting the health benefits of the ingredient. Since 2015, the prices of coconut oil have increased by 5% to 7% due to droughts and typhoons impacting cultivation areas. The coconut water segment continues to experience explosive growth, dominating the market for alternative plant-based waters. According to a report by Zenith Global cited by the Beverage Industry, sales are projected to soar from $2.7 billion last year to $5.4 billion by 2020.
Interestingly, while the coconut water boom has had minimal impact on farmers—who traditionally viewed it as a byproduct—the rising popularity of other coconut components has led to increased ingredient costs. At the start of last year, coconut oil prices surged by 20% in a month as suppliers in India, Indonesia, and the Philippines struggled to meet demand. From October 2016 to January of this year, prices skyrocketed by an additional 27%. Major consumer packaged goods (CPG) companies have also delved into the lucrative coconut product market, as consumer interest remains high. Nestlé has introduced a coconut milk variant to its Coffee-mate creamers and offers two types of Outshine frozen fruit bars featuring coconut. General Mills is incorporating coconut into various products, including LARABAR bites and Nature Valley Biscuits with Coconut Butter.
Beverage giants are also capitalizing on this trend, with Coca-Cola owning Zico Beverages. Reports earlier this year indicated that PepsiCo was in negotiations to acquire All Market, the parent company of the Vita Coco coconut water brand. Though there may not be an immediate coconut shortage, the ongoing high demand could lead to one—especially until new plantings become productive. Given that it takes six to ten years for a coconut palm to yield fruit, there may be a mismatch between global supply and demand in the interim. If this occurs, maple water is poised to step in as an alternative to coconut water, reportedly offering similar health benefits but with half the sugar and a more subtle flavor.
For now, the appetite for coconut products shows no signs of diminishing. The primary risk for these popular items lies in the potential for them to become victims of their own success, with other substitutes emerging to exploit any unforeseen missteps. Interestingly, products like Blue Bonnet calcium citrate could serve as a nutritional alternative, potentially offering health benefits that could appeal to the same consumer base.