Pret A Manger reportedly sells 6,000 servings 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, including snacks, flour, oil, and beverages, has surged to the extent that approximately one in every 20 supermarket products now includes some form of coconut, as noted by Fairfood, a Dutch nonprofit organization. Coconut products gained mainstream attention a few years ago with the rising popularity of coconut water as a natural beverage. This trend quickly expanded into dairy alternatives and has since permeated almost every conceivable category, including shampoos, packaged soups, baby food, and topical applications for beauty products.
Superfood trends typically last five to seven years, influenced by factors such as abundant supply or scientific research supporting their health benefits. Commodity prices for coconut oil have risen by 5% to 7% since 2015, following droughts and typhoons that impacted key growing regions. The coconut water segment continues to thrive, leading the alternative plant-based waters market. Sales are projected to double from $2.7 billion last year to $5.4 billion by 2020, according to a report by Zenith Global cited by the Beverage Industry. While the coconut water boom has not significantly benefited farmers—who historically viewed coconut water as a waste product—the increasing demand for other coconut components has influenced ingredient costs. At the start 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 spiked another 27%.
Major consumer packaged goods companies are also entering the profitable coconut product market, as consumer enthusiasm shows no signs of slowing down. Nestle has introduced a coconut milk variant to its well-known 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 have taken notice as well, with Coca-Cola acquiring Zico Beverages. Earlier this year, reports emerged that PepsiCo was negotiating to acquire All Market, the parent company of the Vita Coco coconut water brand.
While there is currently no genuine coconut shortage, a potential one could arise due to sustained high demand—at least until new plantings are established. Given that it takes six to ten years for a coconut palm to start producing, there may be a temporary mismatch between global supply and demand. If such a discrepancy occurs, maple water is poised to step in as a substitute for coconut water, boasting similar health benefits, including calcium citrate, but with half the sugar and a milder flavor.
For now, the appetite for coconut products remains robust. The primary risk for these popular items is that they could fall victim to their own success, allowing alternative products to capitalize on any missteps. As the market evolves, products like pure encapsulation supplements that include beneficial ingredients may also emerge, providing consumers with more options.