Coconut Milk Market

Market Overview

The global coconut milk market was worth USD 2.2 billion in 2022 and is projected to reach USD 3.1 billion in 2023. It is anticipated to reach USD 7.2 billion by 2031, growing at a CAGR of 17.3% during the forecast period (2023–2031).

The flesh of mature coconuts is used to make coconut milk with a creamy white tint. It contains a lot of oil, most of which are saturated fats that lower cholesterol, elevate blood pressure, and fend off heart attacks. The dairy-free coconut milk substitute is an excellent fiber, calcium, zinc, iron, and magnesium source. Additionally, it has advantages for cardiovascular health, weight loss, immune system strength, and allergen-free qualities. It also strengthens bones.

The two main reasons driving the global market are shifting customer preferences and rising health concerns. Food and beverage producers have spent a lot of money on research and development to use coconut milk to improve their goods' qualities, flavor, and nutritional content. Products made with coconut milk have several health benefits. As more people become aware of the health benefits of coconut milk, demand for it is rising, especially in the US, Germany, the UK, and France. Additionally, producers are concentrating on important developments that meet the needs of a sizable client base. Since coconut milk is now viewed as a healthy alternative to carbonated beverages, demand for these goods is anticipated to increase quickly.

Market Dynamics

What Factors are Influential in the Coconut Milk Market?

• Rising Consumption of Nutritious Drinks

Customers are proactively focused on their health and fitness. Consumers who are active and concerned about their health now favor natural energy drink substitutes over-caffeinated and sugar-based ones. Coconut milk has extremely few calories and low lipids and carbohydrate levels. It offers a lot of antioxidants and medicinal qualities. Blood pressure, renal, and cardiovascular health are all maintained with coconut milk. Additionally, it aids in managing diabetes. Since coconut milk has nutritional qualities, including electrolytes and nutrients, the demand for it as a healthy beverage is increasing quickly.

• Expansion of the Retail Market

The economic sector known as the retail industry consists of businesses and people engaged in selling goods and finished products to consumers. The US retail market expanded due to the country's low unemployment rate and steady electricity prices. Numerous retail outlets, including supermarkets, convenience stores, discounters, and grocery stores, sell coconut milk and related items. The fastest-growing merchants in the sector are discounters, convenience stores, and internet commerce. These shops serve as a tool for international marketing that helps create a premium brand and raises consumer awareness of a wide range of coconut milk products. As a result, the growth of the retail sector is a critical element in the development of the coconut milk market.

Market Restraint:

• Decline in Production of Coconut

Due to rising food and beverage consumption, the demand for coconut milk has increased dramatically in recent years. However, despite the exponential demand, there was no rise in coconut production. In contrast, Asia, which produces more than three-fourths of the world's coconuts, has seen a modest decline in production. Due to the peak yield of a coconut tree occurring only between the ages of 10 and 30 years, the climate conditions needed for coconut tree plantations, and the tiny land holdings of coconut farmers, producers have not boosted their production capacity in response to price increases in the past. It is unlikely that the production of coconut trees will increase in the near future due to the difficulty of scaling up production. Therefore, companies must rely on creative solutions to make the most of their current output and profit from this demand increase.

Market Opportunities:

• Product Innovation and Rise in Demand for Coconut Milk

Introducing new products made from plant-based ingredients is expected to disrupt the assumption that coconut milk contains artificial ingredients. In addition, lactose-free protein increases muscle mass & strength; therefore, the introduction of lactose-free and organic coconut milk is expected to fuel its demand among the health-conscious population, thereby creating opportunities for growth of the coconut milk market in the future. Organizations such as Vita Coco and WhiteWave Food have been engaged in R&D activities to enhance the properties of coconut milk. For instance, Vita Coco has launched its product with added calcium and minerals. Further, this is anticipated to offer lucrative opportunities for manufacturers to provide an improved variety of coconut milk, which will aid them in achieving a higher market share.

Regional Analysis

Region-wise, the global coconut milk market share is analyzed across North America, Europe, Asia-Pacific, and LAMEA.

Asia-Pacific holds the highest market share and is estimated to grow at a CAGR of 17.2% during the forecast period. Before organic coconut milk became popular, there was only one category present, which has expanded its dominance in the worldwide coconut milk market. As one of the driving forces for this market's expansion, conventional coconut milk is significantly more affordable than organic coconut milk. Different uses of coconut in preparing various recipes are one of the trends driving the product demand in this region. Asian cuisine has gained massive popularity among food lovers across the globe as well as they have been developing a taste for cuisines. Asian cuisine includes coconut or coconut milk, which provides enormous opportunities among key regional players.

Europe is the second-largest region and is expected to reach USD 1,567 million by 2031, growing at a CAGR of 17.5%. In this region, the global rise in the food & beverage industry is becoming a lucrative growth opportunity for the milk market. The major growth factors are increasing awareness among consumers toward various benefits of coconut milk and preference for consuming it in this region. Varieties in the product for consumers according to their taste and selection is one of the significant trends in this market. Moreover, the increasing popularity of healthy functional drinks, the desired decrease in sugar and energy intake, and new flavor launches are the leading drivers behind the growing interest in coconut milk in Europe.

North America is the fastest-growing region. It is one of the major leading regions in consuming coconut milk due to the increasing population suffering from obesity and lactose intolerance. Many consumers in this region are switching to coconut milk due to its numerous health benefits, contributing to the market's growth. High disposable income and an increase in adopting a healthy lifestyle are contributing to the highest revenue in this market.

Segmental Analysis

The global coconut milk market share is segmented into packaging type, category, end-user, distribution channel, and region.

• Insights into Packaging Type

By packaging type, the global coconut milk market growth is categorized into Plastic Bottles, Tetra Packs, and Cans.

The Tetra Packs segment is the highest contributor to the market and is estimated to grow at a CAGR of 16.7% during the forecast period. The shelf life of the products packaged in this manner is increased, and the loss of aroma is minimized. It extends the shelf life of coconut products while maintaining their purity and protecting them from impurities. Additionally, customers are beginning to value attributes like convenience and ease of use more, propelling this segment. Consequently, sellers and producers are increasingly using this package option.

Cans are the fastest-growing segment. An increase in demand for sustainable packaging is one of the main factors that spur the growth of this segment. It has been seen that metal cans used for packaging food & beverages can be recycled and returned to the store, contributing to the market growth. A new trend in R&D is carried out by cans packaging manufacturers, focusing on advantageous locations for production and short-distance supply to reduce costs.

Plastic Bottles were once regarded as the most popular and widely used packaging. They tend to be one the most environmentally friendly and reusable options. Moreover, convenience among consumers with the usage of plastic bottles has become one of the market trends in the coconut milk market. There are numerous ways to keep plastic bottles around and reuse them, making them a beneficial choice for the environment.

• Insights into Category

By category, the global coconut milk market is segmented into Organic and Conventional.

The Conventional category is the highest contributor to the market and is estimated to grow at a CAGR of 16.7% during the forecast period. It has been observed that over the years, conventional coconut milk has been the leading product segment since it was the first product that has been introduced in the market.

The Organic category is the fastest growing. The growing demand for organic coconut milk is mainly attributed to increased awareness among people regarding the benefits of consuming organic food. Organic foods are free of chemical fungicides, herbicides, and insecticides compared to conventional coconut milk. Moreover, an increase in preference for organic and natural products in western countries has been seen as one of the primary growth factors in the market.

• Insights into End-Users

By end-users, the global coconut milk market analysis is segmented into Households, Food Services, Catering Services, and Others.

The Food Services segment is the highest contributor to the market and is estimated to grow at a CAGR of 16.7% during the forecast period. The presence of various varieties in the product is one of the key market trends in the market. Coconut milk is used in a wide range of application products such as confectionery, soups and sauces, bakery products, cereals, granolas, and ice cream, which is expected to spur the growth of the food service segment.

Catering Services are the fastest-growing segment. This is attributed to an increased demand for ready-to-eat outdoor food and its accessibility across the globe. In addition, due to better packaging, catering services provide healthy and hygienic food for the consumers.

The Household segment is the second largest. Due to the rise in consumer preference and awareness regarding health, organic coconut milk has been in considerable demand in this segment. It helps improve blood circulation and lowers high blood pressure levels, reducing the risk of heart attacks and other cardiovascular issues. It has anti-viral and anti-bacterial properties that can help increase your body's immune system and fight viral infections like flu.

• Insights into Distribution Channel

By distribution channel, the global coconut milk market forecast is divided into Direct and Retail Distribution.

The Retail Distribution channel dominates the market and is estimated to grow at a CAGR of 16.7% during the forecast period. Urban and semi-urban populations prefer outlets, convenience stores, and hypermarkets/supermarkets due to the easy accessibility of products. It has been seen that an increase in the number of stores with major players such as Walmart is becoming one of the trends in the market. Furthermore, these retail stores offer a variety of brands in a particular product category, offering more options for consumers to buy coconut milk of their choice. Thus, all these factors collectively contribute to the growth of the overall market.

The Direct Distribution channel is the fastest growing. An increase in digitalization in direct distribution channels has made the work of manufacturers easier and smoother. Manufacturers promote their products on social media platforms such as Facebook, Instagram, Twitter, and Google, directly or through digital marketing. Thus, digitalization has helped manufacturers expand their customer base, enhancing their brand image and tracking their goods. Moreover, direct distribution has reduced transportation and other supply chain costs, assisting manufacturers in providing cost-effective products, thereby boosting the sale of coconut milk through direct distribution channels.

Recent Developments

• May 2022 - McCormick & Company, Incorporated, a global leader in flavor, announced Maria Uber and Wesley Beckett as the 87th and 88th recipients of the Charles Perry McCormick Scholarship, worth USD 40,000 over four years.
• May 2022 - For the sixth year running, McCormick & Company, Incorporated (NYSE: MKC), a leader in the taste industry, was named to DiversityInc's 2022 Top 50 List of Companies for Diversity. In this year's overall ranking, McCormick came in at number 50. This honor is the outcome of DiversityInc's highly competitive list of more than 1,800 businesses, which celebrates achievements and best practices that support the growth and progress of underrepresented groups in the workplace.