Coco-NUTS

The humble coconut has long been deemed a superfood, with nutritional experts claiming its oil, meat, flour, milk, and now water, are the perfect antidote to the stress of modern life. Alongside the bottles of pre-packed water in supermarkets, we are now seeing coconut water, thanks to independent companies such as Vita Coco and some larger players including Coca Cola and Pepsi.

Perfect for hydration, experts claim that coconut water boosts your immune system, cleanses your body against bacteria and can even help defeat the common cold. Whether you believe this to be true or not, there is no denying the recent increase in popularity of the product and the ensuing surge in sales. Vita Coco, credited by some as the creator of the market and currently the market leader in the US and UK, sold almost $270 million worth of packaged coconut water in 2013, 300 times as much as in 2004, and double the amount sold in 2011. As a result, it is one of the fastest-growing beverage categories in the US and UK.

Realising the benefits of coconut water is nothing new. Natives of the plantations where coconuts traditionally grow have long been aware of the water’s hydrating properties – electrolytes such as potassium, magnesium, sodium, calcium and phosphorous help the body’s cells to generate energy and function as they should. An imbalance in these electrolyte concentrations also stimulates the thirst mechanism, which is no doubt one of the reasons why coconuts have in the past been favoured in tropical climes as a means of rehydration for farmers, hunters and labourers. Moreover, later on, World War II doctors in tropical areas used coconut water as an intravenous fluid replacement instead of saline.

Coconut palms thrive on sandy soils and cope well with high salinity, preferring areas of regular rainfall and high sunlight for good growth. Traditionally, coconuts have been found near coastal areas and thanks to their buoyancy have been able to use the sea as a means of natural distribution. The coconuts found inland are generally cultivated, and as a result, have thinner husks and higher endosperm (the solid and water content that provides the nutritional value of the coconut) in order to improve the economic benefit of the fruit. Coconut palms are now grown in more than 90 of the world’s countries and an estimated 30 per cent of the world’s population are dependent on them for their economy as well as food.

Coconut water was first mass released as a packaged drink to the US market in 2004. Much of the initial growth was attributed to Vita Coco, which was started by two entrepreneurs inspired by asking a pair of Brazilians in a bar what they missed from home.

The drink appeared to be the successor to unnatural sports drinks that were already the alternative hydrant to water in an increasingly health-conscious middle class. Cholesterol and fat free, with the aforementioned electrolytes and potassium, coconut water looked like a winner. The product received a further boost with Coca-Cola’s takeover of coconut water label Zico and Pepsi’s launch of its own version, O.N.E.

The product has also been endorsed by a raft of health conscious Hollywood stars, including Madonna, Demi Moore, Rihanna, and most recently Jessica Alba.

Despite the strong demand in the US and UK, Brazil remains the world’s leading seller of coconut water. This highlights the future scope of the market, with the idea that the beverage companies based in the region where coconuts prosper can also successfully produce and sell a packaged version sold at a premium as an alternative to the cheaper fruit.

For the tropical countries it actually draws a comparison with the UK and US’ love of bottled water and gives an indication of the possible size of the market. In some areas bottled water has been found to be inferior to tap water, yet in the UK we still purchase over 2.6 billion litres, at an estimated cost of £2 billion annually. Whether this is due to a rise in disposable income, laziness on the part of the consumer, or just clever marketing and the perception that packaged is cleaner, is for now irrelevant as the markets continue to grow.

Controversially, the benefits of Coconut water did come under fire in 2011 as the products were marketed with their superior nutritional and super hydrating value. Yet it was found that sodium, an important electrolyte lost through sweat, was significantly less in Vita Coca and O.N.E coconut Water products than Gatorade. This led to a lawsuit and related $10 million payout from Vita Coco.

Environmental concerns also have to be considered. Coconut palms in North America and Europe are few and far between, and there are certainly not enough to meet demand. This increases the need for transportation, adding to the already high level of greenhouse gas emissions associated with food transportation. In addition, there is also the need for packaging as mass-produced products cannot be presented in the natural husk, as was traditionally the way.

Another concern is the fact that coconut palms become less fruitful as they age, making it necessary for farmers to replace the plants in order to meet demand. This re-farming of the same land reduces the level of natural fertilizers and calls on chemical assistance, which may reduce the attraction of the drink as a healthy option. It is also worth noting that the main coconut farming countries tend to be poorer tropical areas. Unfortunately, in these areas health and safety regulations are often lacking, allowing dangerous, and often unethical practices to be used. In some cases children are used to carry out the work and it has been reported that in Indonesia, pig-tailed macaques  are trained to climb the palms and retrieve coconuts whilst chained to their master.

For the moment though, the future looks good for the coconut water industry, and Vita Coco in particular, as it challenges the big players in what is still a relatively new market for the UK and Europe. Michael Kirban, the firm’s co-founder and chief executive, was quoted as saying: “We want to own coconut water like Tropicana owns orange juice or Gatorade owns sports drinks”. It remains to be seen if he gets what he wants, but with a recent move into the kids drinks market and the obsession with children avoiding unhealthy drinks, it looks like he is onto a winner.

Top ten coconut producing countries in the world

Source: FAO Statistics 2009