“We do approximately 40 to 50% of our total volume between late summer and up to holidays,” Jim Jackson, director of purchasing for Trailblazer Foods, told FoodNavigator-USA, adding that over a 10-week period beginning in July, Trailblazer Foods packages up to 15 tons of coconut product on a daily basis. “We go from running one or two shifts a day four days a week the majority of the year to pretty much working 24/7. But demand has really increased for us this year, and that’s due to a couple things. One, we’re adding orders for additional items to existing customers and two, we’re taking on new customers for coconut.”
Widely embraced as a functional food with a range of health benefits, coconut—in various forms—has experienced a recent resurgence in popularity. A longtime holiday favorite for baking, coconut is also being incorporated into more savory and sweet foods for its uniquely creamy texture and slightly sweet flavor plus the benefits of added fiber, vitamins and minerals. Not to mention the explosion of the coconut water category in the past few years (it topped $100 million in sales in mass markets last year, according to Packaged Facts).
For Trailblazer, that has translated to increased demand from its retail and institutional customers for new coconut product offerings beyond its traditional sweetened and flaked coconut.
“Both new and existing customers are now branching off and wanting unsweetened; others want unsweetened organic coconut. There’s also a growing business out there in toasted and sweetened coconut chips,” Jackson said. “The trend is there. Consumers are using coconut products of all kinds—milks, oils and other forms—really anything with word coconut in it. It’s an exciting part of the food business right now.”
Indeed, Mike Post, Trailblazer's director of sales, added that demand for coconut as a whole doesn't seem to be simply cyclical, apart from the usual holiday ramp-up.
"Thus far, coconut products as a whole do not appear to have a cyclical or seasonal pattern amongst our customers. There is a steady increasing growth in demand. However, one caveat is, bagged coconut is extremely seasonal and demand peaks from October through December and then again during the month of Easter."
FoodEssentials: Coconut spans health and indulgence, private label and national brands
According to data compiled by market research firm FoodEssentials, coconut inclusion is widespread among private label and national brands, health food, supplement and dessert products alike. Of the more than 12,000 products in the FoodEssentials database that contain coconut (which includes personal care), the top 10 brands with products containing coconut are: Kroger, Roundy’s, Kellogg’s, Food Club, GNC, Nestle, ShopRite, Quaker, Blue Bunny and Mariano’s.
Granola and trail mix bars, along with protein-based nutrition bars led the coconut-containing food product categories, followed by ice cream bars and sandwiches and nutrition and energy bars. Also notable, the market researcher found, is that 103 (5%) of the 1,903 total yogurts in the FoodEssentials database contain coconut. “Even more striking is that of the 21 vegan yogurts, nine of them use coconut,” said FoodEssentials researcher Jason Lipsitz, noting that its ubiquity is likely due to the use of coconut as a soy-free base for vegan yogurts (the other being almond milk).
The most popular forms of coconut for inclusion in CPG products, FoodEssentials found, are coconut oil (conventional and organic), conventional and organic coconut, partially hydrogenated coconut oil, coconut juice, conventional and organic coconut milk, coconut cream and dried coconut. Organic and organic certified led claims made on coconut-containing products with 79% and 61%, respectively. Other popular claims on coconut-containing products are kosher (24%), trans fat-free (21%) and vitamin claims (21%), FoodEssentials found.
The popularity of the organic claim could be attributed to the fact that coconut is "naturally organic and the coconut oils, sugars and flours are highly organic", as Post pointed out.
Will supply keep up?
For Trailblazer, all the excitement surrounding coconut as forced the manufacturer to increase lead times on production—working three to six months out for ordering and procurement. “We’re already looking at Q1 of 2015,” Jackson said. “There are so many people out there and such a demand on coconut that you’ve gotta get orders out early.”
Increased demand is also impacting supply. Trailblazer Foods, for one, has diversified sourcing to keep up with demand. “Because of the demand problem, we’ve diversified sourcing and we’re no longer getting all our coconut from one geographical area,” Jackson noted. “The theory was a storm would come through Philippines, which it did.”