Bloomberg reported that a global coconut shortage caused the temporary removal of a popular breakfast item at sandwich chain Pret A Manger. However, the company told The Telegraph newspaper that its coconut porridge — made with coconut milk, oats and red quinoa — would be back as soon as a coconut ingredient shipment was delivered.
Bloomberg also said U.K. grocery chain Asda recently indicated on its website that coconuts were sold out due to surging global demand for foods, beverages and personal care products containing some form of the ingredient.
Even though 2.5 million more acres of coconut palms have been planted during the past 10 years, overall productivity is down because of aging plantations, pests and diseases, according to a recent UN study Bloomberg cited. The situation pushed spot prices to a record level earlier this year.
Pret A Manger reportedly sells 6,000 servings each day of its coconut porridge and has credited both that item and vegetarian foods for driving revenue and earnings growth in 2016. The popularity of food products made with coconut — including snacks, flour, oil and beverages — has grown to the point that about one in every 20 products sold in supermarkets today contains some form of the ingredient, according to Fairfood, a nonprofit organization based in the Netherlands.
Coconut products first entered the mainstream with the sudden popularity of coconut water as a natural drink a few years ago. From there, it moved into dairy products, and then into just about every other possible category — including shampoos, packaged soups, baby food and topical applications for beauty products.
Superfood trends tend to last for five to seven years and may be influenced by factors such as plentiful supply or scientific studies that back the ingredient's health benefits. Commodity prices for coconut oil have jumped between 5% and 7% since 2015 after droughts and typhoons affected growing areas.
The coconut water category itself has continued to skyrocket, dominating the alternative, plant-based waters market. Sales are expected to double from $2.7 billion last year to $5.4 billion by 2020, according to a report by Zenith Global reported on by the Beverage Industry.
The coconut water boom has had little impact on farmers because it traditionally was seen as a waste product. However, the growing popularity of other coconut components has hit ingredient costs. Coconut oil prices climbed 20% in a month at the beginning of last year as suppliers in India, Indonesia and the Philippines struggled to keep up with demand. From October 2016 to January of this year, prices soared another 27%.
Large CPG companies have gotten into the lucrative coconut product market, too, as consumers seemingly can't get enough. Nestle has added a coconut milk variety to its popular line of Coffee-mate creamers, and there are two types of Outshine frozen fruit bars with the ingredient. General Mills is adding coconut to a variety of items, including LARABAR bites and Nature Valley Biscuits with Coconut Butter.
Beverage giants have also taken note, with Coca-Cola owning Zico Beverages. Earlier this year, there were reports that PepsiCo was in talks to acquire All Market, the owner of the Vita Coco coconut water brand.
While there may not be a true coconut shortage at the moment, it's possible one could develop due to continuing high demand — at least until new plantings come online. However, since it can take six to 10 years for a coconut palm to begin producing, it's possible global supply and demand may not match up in the interim. If they don't, maple water is waiting in the wings to stand in for coconut water — and it reportedly contains similar healthy ingredients but with half the sugar and a more subtle taste.
For now, the demand for coconut products does not seem to be waning. The real risk for the popular items is that they become a victim of their own success and other substitutes eventually come in to take advantage of their unexpected missteps.