Coconut Derivatives Market Size, Share & COVID-19 Impact Analysis, By Type (Young and Mature), By Derivatives (Coconut Oil, Coconut Water, Coconut Milk, Desiccated Coconut, and Others), End-User (Food & Beverages, Cosmetics, Pharmaceuticals, and Others), Regional Forecast, 2020 – 2027

The global coconut derivatives market size was USD 11.05 billion in 2019. The spread of COVID-19 has provided significant challenges for the coconut raw material suppliers and also the processors. Based on our analysis, the demand for coconut water was huge in 2020, and panic buying was observed among the consumers leading to a shortage of packaged coconut water. This was mainly due to its health benefits and longer shelf life. However, the demand for other derivatives of coconut was comparatively lesser. The global market is projected to grow from USD 11.60 billion in 2020 to USD 23.39 billion in 2027 at a CAGR of 10.54% during 2020-2027. The growth in CAGR is attributed to the rise in popularity of veganism and the increase in consumption of plant-based food & beverages. The growth of the market is also supported by upsurging demand for natural and organic-based personal care products.

Limited Availability of Raw Material during COVID-19 to Hamper Market Growth

A lockdown followed the outbreak of COVID-19 in most of the countries across the world. Though the lockdown was imposed to curb community transmission within the population, it has posed various operational challenges for coconut derivative manufacturers. Due to the limited mobility of traders and farmers, the volume of coconuts delivered was lower than usual quantities. Thus, the lesser availability of raw material has affected processing capacity, and this has further resulted in an increase in prices and disrupted supply chain.

While disruption in the supply chain impacted the market's growth, several positive outcomes supported market growth during the COVID-19 outbreak. For instance, the increasing sales of coconut water and the rising awareness regarding coconut oil use. In March 2020, the sales of coconut water spiked in the U.S. On the other hand, in the Philippines, scientists started studying virgin coconut oil (VCO) as a potential treatment for coronavirus. 

LATEST TRENDS

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Growing Preference for Vegan Diets to Fuel Growth

The trend of veganism has rapidly spread across the globe leading to an increased demand for plant-based products. The acceptance of the veganism trend has become popular in many developed parts of the world. It promotes the development and use of animal-free alternatives to benefit animals, people, and the environment. Plant-based diets are one thing that has been commonly observed among all vegans. The growing perception that coconut oil and coconut milk can be used as an alternative to animal fats and animal milk has surged the demand for the derivatives of coconut. This is anticipated to bode well for the market growth.

DRIVING FACTORS

Rising Popularity of Plant-based Alternatives to Propel Market Growth

According to the Plant-Based Foods Association, U.S., growth in retail sales of plant-based foods and plant-based milk increased by 11% and 5%, respectively, while the growth of all foods and dairy-based milk increased slightly by 2.2% and 0.1%, respectively. The growing demand for plant-based milk is primarily attributed to the rising awareness regarding health benefits associated with plant-based beverages. This ultimately contributes to the growth of the global coconut derivatives industry.

Earlier, coconut derivatives such as coconut oil and coconut milk were only utilized as a food ingredient. However, in the recent past, consumer awareness regarding their usefulness to improve overall health has necessitated manufacturers to invest in developing value-added products. In July 2020, Epigamia, in collaboration with Danone S.A., launched plant-based yogurt made using coconut milk in India. This launch will enable Danone to capitalize on the rising trend of coconut milk as a dairy alternative.

Increasing Utilization of Coconut Derivatives across Cosmetic & Skincare Industry to Drive Coconut Derivatives Market Growth

According to the market analysis shared by the Foreign Agricultural Services (FAS) and the U.S. Department of Agriculture (USDA), the industrial consumption of coconut oil for the cosmetic and skincare industry has increased from 1.51 million metric tons to 1.79 million metric tons. The growing awareness of coconut oil's anti-aging properties has significantly increased its demand across the beauty & skincare industry. The global market for these derivatives of coconut is highly propelled by the increasing demand for coconut-based skincare and haircare products among consumers.

RESTRAINING FACTORS

Fluctuations in Coconut Production Owing to Climatic Factors to Restrain Market Growth

The market is significantly hampered by fluctuations in the production of coconut due to various climatic factors. Global climate has been changing rapidly, mainly due to the rising emission of greenhouse gases through multiple human activities such as deforestation and increased industrialization.

Coconut plantation is highly sensitive to climate changes as it is a perennial crop. Climate change affects coconut plantation owing to higher temperatures, preeminent carbon dioxide concentration, rainfall changes, increased weeds, pests and diseases, and the growing susceptibility to organic carbon pools. Also, the vulnerability of coconut plantations to climate change primarily depends on the intensity of atmospheric or soil drought, adaptations, and sensitivity.

Drought stress heavily impacts production in almost all coconut growing regions, primarily a rain-fed crop. Furthermore, summer dry spells every year, apart from the frequent drought years, affect the production. The factors mentioned above reduce coconut production and ultimately restrains the market growth.

SEGMENTATION

By Type Analysis

Mature Coconuts to Hold the Major Share

Based on type, mature coconuts hold the major coconut derivatives market share in the global market owing to their high flesh content and low price. Furthermore, these coconuts are dried for making copra and extracting coconut oil, which is in high demand among all derivatives.

The young coconut segment is expected to experience considerable growth during the industry forecast period. This is mainly attributed to the growing awareness regarding the benefits associated with the consumption of coconut water. In recent years, the demand for drinkable young coconuts has peaked, especially in the U.S. and European countries such as the U.K.

By Derivatives Analysis

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Coconut Water to Emerge as the Most Consumed Coconut Derivative

The coconut water segment is projected to grow at the highest CAGR in the forthcoming years due to the rise in demand for coconut water, especially in the developed regions such as North America and Europe. Also, coconut water demand is driven by the growing adoption of healthier functional drinks and an upsurge in the use of coconut water as an ingredient in the beverage industry.

Coconut oil has strong demand in the cosmetics and food & beverage industry due to its strong flavor, mild aroma, and emollient properties. The demand for virgin coconut oil (VCO) is growing faster due to the rising use of healthier vegetable oils and the increasing application of VCO in food supplements and premium healthy snacks. This is expected to favor the segment’s growth in the market.

By End-User Analysis

Cosmetics Holds Major Market Share Owing to High Consumption of Coconut Derivatives

Based on end-user, the cosmetics segment is likely to dominate due to the large consumption of these derivatives such as coconut oil, coconut milk, and coconut cream to produce a range of cosmetic products. Also, cosmetic manufacturers are focused on adopting natural and environmentally-friendly emulsifiers and ingredients such as coconut oil due to the increasing consumer interest in sustainable products.

Coconut derivatives find huge application in the food & beverages industry in coconut water, coconut oil, desiccated coconut, coconut sugar, coconut flour, and coconut milk. This is expected to drive segmental growth in the forthcoming years.

REGIONAL INSIGHTS

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Asia-Pacific region was USD 5.11 billion in 2019 and is expected to dominate the global market during the forecast period. This is attributable to the increasing trade activities of coconut derivatives between Asian countries and other regions, mainly Europe and North America. The presence of leading manufacturers such as Axelum Resources Corp., Celebes Coconut Corporation, and PT Global is expected to boost the market growth in the region.

The market is witnessing robust growth in Europe due to the ongoing trend of plant-based products. Consumers are highly inclined towards a plant-based diet as it is perceived to be a way to achieve a healthy and sustainable balance between animal products such as meat & milk and vegetables.

The presence of key players such as Vita Coco, McCormick & Company, Inc., and Hain Celestial drives the market's growth in North America. Also, the growing awareness regarding health benefits associated with coconut derivatives consumption is anticipated to drive the demand for coconut products in the region.

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In Rest of the World, there is an upward trend of clean beauty products among South American, Middle Eastern, and African consumers making them choose sulfate-free, paraben-free, and silicone-free beauty products. The popularity of these derivatives such as coconut milk, cocoa butter, and natural ingredients, particularly argan oil, is increasing in South American consumers to maintain their healthy hair.

KEY INDUSTRY PLAYERS

Companies Focus on Facility Expansion for Broadening Their Market Share

The global coconut derivatives market exhibits a fragmented structure. The few prominent players such as Vita Coco, Celebes Coconut Corporation, and Axelum Resources Corp. in the industry hold a significant share in the entire market owing to their huge clientele base, strong brand loyalty & distribution network. The leading manufacturers are intensively focusing on reinforcing their business capabilities by geographical expansion. For instance, in May 2020, Danone expanded its plant-based category in Europe, post its launch of a new business unit in North America.

LIST OF KEY COMPANIES PROFILED:

• Axelum Resources Corp. (Northern Mindanao, Philippines)


• Superstar Coconut Products Co., Inc. (Quezon, Philippines)


• Celebes Coconut Corporation (Butuan, Philippines)


• JAKA Investment Corp. (Makati, Philippines)


• PT Global Coconut (North Sulawesi, Indonesia)


• McCormick & Company, Inc. (Maryland, United States)


• Hain Celestial Group, Inc. (New York, United States)


• Danone S.A. (Paris, France)


• Vita Coco (New York, United States)


• Agrim Pte Ltd. (Singapore)

KEY INDUSTRY DEVELOPMENTS:

• September 2020: North American company EVR Foods launched plant-based milk and creamers made from pili nuts and coconut water under its brand Lavva, which is best known for its plantain-fueled plant-based yogurts.


• October 2019: Axelum Resources Corp. signed a new contract to supply organic coconut derivatives, especially coconut milk powder, to an international skincare products manufacturer.

REPORT COVERAGE

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The market research report provides qualitative and quantitative insights into the market. It also offers a detailed analysis of the market size and growth rate for all possible market segments. Various key insights are an overview of related markets, recent industry developments such as mergers & acquisitions, the regulatory scenario in critical countries, and key industry trends.

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