Coconut is a plant that is surrounded in mythology. In India, it is eulogized as ‘Kalpavriksha,’ “the tree that provides all the necessities of life”. That description is very fitting, as there are 32 uses for the various parts of the tree, from oil to water to meat. Now, global health-conscious consumers are gaining a greater appreciation of this delicious fruit and its many uses, especially in healthy snacks.
Coconut-based commercial products have not only grown in popularity, but it diversity. Previously limited mostly to oil and meat, new consumer products have emerged, including wood for decorations and furniture, coir (fiber from the husk) for various commercial applications, high quality commercial active carbon from the shell, desiccated coconut, coconut milk, and hearts of palm.
Between 2015 and 2020, the coconut market grew at a Compound Annual Growth Rate (CAGR) of 8.15%, and an even stronger CAGR of 9.65% is predicted between 2020 and 2025. The largest market for coconut products is in the Asia Pacific area, but North America is the fastest-growing market, with significant demand also growing in Europe. The value of the global coconut market is expected to reach an estimated $11.68 billion in 2020, and by 2026 it could grow to $31.1 billion.
The specialty food segment has wholeheartedly embraced coconut. Be it as an ingredient or a flavor, coconut is appearing in a constant stream of specialty foods, is a supporting component in new diets, and category sales are feeling the boost as well.
Fueling the demand for coconut products is the trend towards healthier dairy milk alternatives and naturalness. There are also innovations leading to enhanced product quality and enriched dietary value that are contributing to market growth.
Table 1: Market Segmented by Product Type, Distribution Channel, and Geography Product Type
Geography Coconut Oil Supermarket/Hypermarket North America Coconut Water Convenience Stores Europe Coconut Milk/Cream Grocery Stores Asia-Pacific Desiccated Coconut Online Retailing South America Other Product Types Other Distribution Channels Middle East Africa
The health benefits of coconut have ben a driving factor in the growth of the coconut market. While most fruits are high in carbs, 93% of the calories in coconut milk comes from fat, including medium-chain triglycerides (MCTs), which have been linked to weight loss and a reduced risk of heart disease. Coconut meat, similarly, is high in fat but is also rich in manganese, supporting enzyme function and bone formation.
Coconut oil has a high and healthy saturated fat level, shown to be beneficial in reducing heart disease. It has proven anti-aging, anti-bacterial, antioxidant, and anti-inflammatory properties as well. Research has even shown that virgin coconut oil may be useful in treating COVID-19, although conclusive evidence is still lacking.
These benefits are having a major impact on the sales of coconut products. Coconut water, for example, gained huge popularity in 2010 when celebrity Madonna invested $1.5 million in Vita Coco, which has since become a major brand. A variety of coconut-based healthy snacks, which can be an alternative to processed sweets, have also gained popularity.
|Table 2: Various uses of the six main commercial coconut products|
|Coconut Milk/Cream vs. Cow’s Milk/Cream||Desiccated Coconut (3)||Coconut Oil
(Largest Market Share
|Long Shelf Life||Incorporation in various cuisines||Cosmetics: Skin and health care||Hydrating properties||Healthier vs. synthetic vinegar – digestion||Geotextiles (durability & absorbent characteristics|
|Convenient packaging||Flavoring in curries||Cooking||Stress-reducing Antioxidants||Flavoring agent||Seed germination materials|
|Vegan Dairy Alternative||Confectionery Industry||Massage oil||Preservative|
|Cosmetics: Anti-ageing creams||Bakery Products||Bio-Fuel||Quality enhancement|
Although the coconut palm is a robust and naturally-occurring tree in many areas, producing coconut is not an easy task. Even the dwarf varieties of the tree require several years to mature, and are vulnerable to rainfall fluctuations and dryness. Organic coconuts, which fetch a premium, are even more difficult to successfully farm at scale.
However, considering the many uses of coconut and the strong growth displayed in developed markets such as the US and Europe, coconut production is sure to increase. Although traditionally produced in Southeast Asia, growers in Latin America have cause for optimism due to their superior access to markets, ideal growing conditions, and low cost of inputs and labor.
The health food craze isn’t going anywhere, especially considering the effects of the pandemic, and coconut is among the many products to benefit. As consumers move away from processed sweets and unhealthy beverages like sodas, coconut has emerged as a sweet, refreshing alternative without the high sugar content. From water to oil to healthy snacks, coconut is quickly becoming a mainstay on grocery shelves, and its consumption can only be expected to increase.