Virgin Coconut Oil Market Size, Share & COVID-19 Impact Analysis, By Type (Organic and Conventional), By End-User (Food & Beverages, Pharmaceutical, and Cosmetics & Personal Care), and Regional Forecast, 2021-2028

The global virgin coconut oil market size was USD 2.11 billion in 2020. The market is projected to grow from USD 2.24 billion in 2021 to USD 3.69 billion in 2028 at a CAGR of 7.35% during the 2021-2028 period. The global impact of COVID-19 has been unprecedented and staggering, with witnessing a positive impact on demand across all regions amid the pandemic. Based on our analysis, the global market exhibited a higher growth of 7.71% in 2020 as compared to the average year-on-year growth during 2017-2019. The rise in CAGR is attributable to this market’s demand and growth, returning to pre-pandemic levels once the pandemic is over.

The lower production of coconut and its derivatives in the major exporting countries during the pandemic led to nearly 39% surge in coconut oil and VCO prices in 2020 as compared to the previous year. The global market is gradually overcoming the crisis, with the trade barriers being lifted and the production resuming its usual pace. Thus, it is anticipated that the VCO market will exhibit significant growth during the forecast period.

Virgin coconut oil (VCO) is made from fresh coconut meat or its derivatives, which is naturally processed without utilizing any chemicals and additives. It is the purest form of coconut oil, containing natural vitamin E and does not undergo any hydrolytic or atmospheric oxidation due to its low content of free fatty acids and peroxide value.

The popularity and considerable potential for VCO therapeutic uses is growing, which leads to various pharmaceutical companies to venture on this product. Virgin coconut oil is healthier compared to refined coconut oil as it remains in its crude state without undergoing any processes. It’s incorporation in anti HIV/AIDS drug for the treatment of Alzheimer’s disease and anti-cancer therapy is also significantly growing. This is due to its scientifically proven antimicrobial and anti-inflammatory properties. Additionally, increasing demand as a functional ingredient in food and beverage applications, coupled with the growing awareness among people regarding the utility of the oil’s benefits is expected to contribute to the spectacular market growth.

COVID-19 IMPACT

Decline in Coconut Production amid COVID-19 to Hamper Market Growth

The COVID-19 has caused a remarkable change in various markets across the globe, including this market. Closures and security measures taken around the world in response to the coronavirus outbreak had profound effects on the agricultural sector. Mobility restrictions and suspension of farming activities impacted early and late harvest cycles. This impacted the total coconut production in 2020, which further obstructed the VCO market growth. According to Union Ministry of Agriculture, in 2020-2021, coconut production in India fell to 21.21 billion nuts, a decline by 10.88% compared to 2018-19 production i.e., 23.80 billion nuts. The pandemic and the consequent lockdown have impacted on the production and sales of various products, with the closure of various manufacturing facilities. Furthermore, the lockdown also affected supply chain that reduced global exports and imports, thereby impeding the market growth in many regions.

LATEST TRENDS

Increasing Adoption of VCO in Pharmaceutical Sector Due to Potential Health Benefits

VCO has been utilized in the cosmetics & personal care industry since a very long time. In recent years, this oil’s demand in pharmaceutical sector grew due to rising consumer interest, coupled with government backed studies. In the Philippines, it gained a lot of attention in 2020, as the country's Department of Science and Technology (DOST) announced its plans to study VCO to help reduce COVID-19 symptoms. The manufacturers are also adapting to growing applications of VCO in various pharmaceutical products by launching and expanding their product lines, which is expected to provide market opportunities in the coming years. For instance, in March 2021, Growrich Manufacturing, a Philippines-based company, expanded its VCO capsules market due to growing consumer demand for immune health supplements.

DRIVING FACTORS

Growing Awareness about Health Benefits of Virgin Coconut Oil to Drive Market Growth

Increasing health consciousness among consumers has significantly driven the growth of the market. Numerous health benefits associated with VCO has contributed in widening its application in medical consumables and pharmaceutical products to maintain good health. VCO is rich in healthy fatty acids and contains vitamins, minerals, and antioxidants. The product type has been reported to be gaining traction as a nutraceutical ingredient around the world, and is increasingly gaining popularity among health conscious individuals. Apart from that, it is also used in the pharmaceutical industry, especially by patients suffering from diabetes, as it helps with the efficient utilization of blood sugar. According to International Diabetes Federation (IDF), in 2019, there were approximately 463 million adults living with diabetes, which showcases a huge growth potential for the virgin coconut oil industry.

Increasing Consumer Spending on Functional Food and Beverages to Propel Market

With the growing demand for functional foods, VCO has become a popular choice due to its rich flavor and mild aroma. It has become popular in various trend diets such as keto and paleo. Rising consumer’s awareness about proper nutrition and adequate physical activity has also affected their food choices, as opting for a healthy cooking oil makes a difference in promoting additional benefits. Hence, this oil has started getting recognition as functional oil amongst consumers. The surge in consumer demand for functional food is also expected to drive the market.

RESTRAINING FACTORS

Presence of Replacements of Virgin Coconut Oil in Market to Impede Growth

There is abundant presence of substitute oils, such as virgin olive oil, sunflower oil, almond oil, canola oil, and others, that possess similar nutritional properties as VCO, which is likely to hinder the market growth. The fortification of canola and olive oils to retain its essential nutrients by various manufacturers has also shifted consumer’s interest toward replacements. Moreover, virgin coconut oil smoke point is high of aforementioned oils which makes them a better choice for baking and cooking. In addition, the high dependence on import of coconut and coconut oils in Europe is further expected to hamper market growth.

SEGMENTATION

By Type Analysis

Conventional Oil to Hold Larger Share due to its Low Cost

By type, the market is divided into organic and conventional.

Conventional oil accounted for the major share in the market owing to its cost efficiency and popularity among consumers. Its demand is increasing among individuals due to its indispensable nutritional benefits. Wider use of this type of oil in personal care, and food & beverage industries is driving the growth of this segment.

Meanwhile, the organic segment is expected to foresee substantial growth, owing to its all natural goodness of coconuts. Organic oils do not involve heat, which helps in retaining the products’ nutritional value. With healthy properties, such as rich in minerals, vitamins, and dietary fibers, the demand of organic oils is expected to boost the segment’s growth over the forecast period.

By End-user Analysis

Cosmetic and Personal Care Hold Major Share Owing to Wide Utility of VCO

By end-user, the virgin coconut oil market is segmented into food & beverages, pharmaceutical, and cosmetics & personal care, with the cosmetics & personal care segment holding the major market share. VCO hair and skin care products are being widely purchased, and have paved way for the growth of the segment, due to its moisturizing, anti-bacterial, and cleansing properties. Additionally, the incorporation of this oil in cosmetics as makeup primer, highlighter, and tinted lip gloss is increasing due to its hydrating property, which can be deeply absorbed in skin. Thus, the aforementioned properties of the oil make it a key ingredient in several beauty products, thereby driving the growth of this segment.

The food & beverage segment is expected to foresee growth in the market forecast period, owing to increasing use of virgin coconut oil in food products due to its authentic flavor and aroma. Virgin coconut oil’s high smoke point and low melting point, taste, easy digestibility, and resistance to rancidity, make it an ideal ingredient in the food industry. It is also used as an alternative to butter in baked goods and smoothies. Lauric acid present in the oil promote ketosis, which helps the body burn fat to produce energy is also contributing in lowering cardiovascular disease risks. Thus, the rising use of this oil in various food products is expected to drive the segment growth.

REGIONAL INSIGHTS

The market is categorized into North America, Europe, Asia Pacific, South America, and the Middle East & Africa in terms of geography.

Asia Pacific dominates the world market in terms of sales and stood at USD 0.82 billion in 2020. The higher acceptance of VCO in the emerging markets of the region, coupled with the increasing coconut plantations and its high domestic consumption drives the market growth. This region is the largest contributor in terms of both production and consumption. Philippines and India are the largest producers of coconut raw oil. The substantial increase of coconut production in India, led to more extraction of VCO in the country. According to Government of India, coconut production is 9500,000 metric tons and the coconut plantation area in the country is around 1.78 million hectares. In addition, the Government of India, has also been highlighting the health benefits of this oil by organizing various campaigns, which is further expected to boost the regional virgin coconut oil market growth.

Europe is the second largest market and has grown rapidly in recent years, owing to the growing consumer awareness of healthier diets. Originally, the oil was only available in health food stores, but now has become popular in various supermarkets. Furthermore, its use in various industrial products such as cosmetics, food & beverages, and pharma products is growing. The health and wellness trend has led the European food industry to use the oil in high-end products. Currently, the main industrial application of it is in high-quality healthy snacks. Europeans’ growing attention toward maintaining a healthy balance between diet and lifestyle has significantly increased the demand for healthier foods. Thus, the product has become one of the iconic ingredients in health and wellness products, which further propels the growth in the Europe market.

The market in North America is likely to exhibit impressive growth in the forthcoming years due to growing demand for nutritional supplements to support overall health. Further, rising demand of personal care & beauty products and high disposable income in the region contribute to the market growth. The incorporation of VOC in beauty products is surging in the region as the fatty acid presence in the oil helps restores the overall skin health. In addition, the demand of healthy supplements infused with the oil is rising due to its antimicrobial effects and fat burning properties, which is expected to further drive the market growth. Furthermore, according to the latest trade statistics of the International Trade Centre (ITC), in 2021, VCO remains among top three products imported by the U.S. from Philippines from the past three consecutive years. The increase in demand for coconut products is largely based on positive changes related to the new U.S. trade policies, market trends, and dietary guidelines related to the coconut industry.

South America is expected to witness substantial growth as consumers in the region are still becoming aware of the health benefits and the oils’ ability to fight obesity and other health issues. As Brazil is among the prominent producers of coconut across the world, it offers abundant raw material availability for the VCO manufacturers, which is expected to offer growth opportunities for the market. Furthermore, the demand for healthy edible oils is growing in the Middle East & Africa, owing to increasing urbanization and adoption of Westernized culture. This has influenced the government to note the harmful effects of trans fats, which is anticipated to promote VCO consumption in the region.

KEY INDUSTRY PLAYERS

Leading Players to Focus on New Product Launches for Market Growth

Leading players are focusing on launching innovative products to address their rising demand among consumers. The market is highly fragmented due to the presence of numerous small and large suppliers. Furthermore, the market is subject to rapidly changing consumer demands and preferences. Some of the major players in the global VCO market are Nutiva Inc., NMK Holdings Pvt Ltd, and Greenville Agro Corporation.

LIST OF KEY COMPANIES PROFILED:

• Edward & Sons Trading Co (California, U.S.)


• Greenville Agro Corporation (Cebu City, Philippines)


• The Coconut Company (UK) Ltd. (London, U.K.)


• Healthy Traditions, Inc. (Texas, U.S.)


• Nutiva Inc. (California, U.S.)


• The Hain Celestial Group (New York, U.S.)


• MaxCare VCO (Karnataka, India)


• Celebes Coconut Corporation (Butuan City, Philippines)


• SC Global Coco Products Inc. (Mandaluyong City, Philippines)


• Barlean's (Washington, U.S.)

INDUSTRY DEVELOPMENTS:

• January 2021 – The researchers of International Islamic University of Malaysia developed a dental varnish and mouthwash made from virgin coconut oil to help prevent oral health problems. The product is developed as a natural alternative for chemical mouthwash, suitable for all age groups without any side effects.


• March 2020 - Dr. Bronner’s, a family-owned company in North America, launched its first regenerative organic certified product, virgin coconut oil. The oil achieved silver level of certification working in close partnership with Serendipol, the company’s coconut oil supplier in Sri Lanka. 

Report Coverage 

The market research report provides qualitative and quantitative insights into the market. It also offers a detailed analysis of its types, end users, their market size, and growth rate for all possible segments in the market. Along with this, the report provides an elaborative analysis of the market dynamics and competitive landscape. Various key insights presented in the report are an overview of related markets, research methodology, and recent industry developments. Along with this, information about mergers & acquisitions, the regulatory scenario in critical countries, and key industry trends are also provided.

Report Scope & Segmentation