North America will be a major consumer of coconut milk in coming years, according to a report from Future Market Insights. Global sales reportedly hit $830 million by the end of 2017 — with one-quarter of them coming from North America.
Coconut milk sales are projected to expand around the world by a 7.3% compound annual growth rate between 2017 and 2027, the report said.
Consumer interest in the high nutrition content of coconut milk, as well as plant-based and organic beverages, is driving some of this trend in the U.S. and Canada, the report noted. Developed economies see nutrition-rich foods as top-grossing products.
Future Market Insights found the growing demand for healthy, plant-based and organic beverages — along with lactose intolerance and dairy allergies — is behind some of the coconut milk market expansion. Consumers also are interested in exotic flavors and tastes, which is why Asian cuisine containing coconut milk is becoming more popular. Retail sales of ethnic foods jumped to $12.5 billion in 2018 from $10.9 billion five years earlier, according to Statista, and coconut milk was likely a major part of that increase.
Coconut milk and related products appear as ingredients in a wide variety of products, such as whipped toppings and desserts. In addition, coconut milk and coconut cream powder are used in beverages, salad dressings, soups, curries, milkshakes and jam, Dairy Reporter said. Non-dairy beverages are another segment where coconut milk frequently appears, including in Danone North America's So Delicious organic coconut milk and similar products whose sales are increasing.
Another area where coconut is being used is in non-dairy yogurt, such as in Chobani's new coconut-based yogurt. However, the company doesn't use the word "yogurt" on its packaging to avoid misleading consumers and to stay away from the ongoing battle over dairy terms on plant-based products.
Coconut milk comes in different formats, so consumers can be confused by what they're getting. Items labeled "coconut milk beverage" typically contain water and coconut cream. There also is "light coconut milk" that contains less fat and has a thinner consistency than pure coconut milk. Coconut milk is the thicker type that's used in Asian cuisine, and it can take the place of heavy cream. Coconut cream is coconut milk with more water removed so it's a thick cream.
The popularity of coconut flavor and the product's adaptability in foods and beverages guarantees demand will continue, but its future as an ingredient depends on the supply and price. Production areas also can be affected by drought and typhoons, so stability of the commodity is an important consideration for suppliers and manufacturers.
The report noted that acquiring raw coconut meat in some countries — and the increasing number of organic substitutes for coconut milk — could limit market growth over time.
Still, the report projected food services and food and beverage manufacturing will be two of the three most profitable uses of coconut milk going forward. Revenues from those, along with household applications, are expected to make up more than 80% of global coconut milk revenues by the end of 2027.