Rockville, MD -- (SBWIRE) -- 03/29/2018 -- The coconut tree is known for its incredible versatility and many uses - that range from food all the way to cosmetics. Coconuts are a large part of the diets of people in tropical and subtropical countries and coconut oil is a key product for such a vast consumer base. While the demand for coconut oil has gone up considerably in the last decade, global coconut cultivation has been unable to keep up with this spike. The coconut supply has slowly gone down which has driven up the prices of coconut oil. The demand for coconut sugar and coconut water has left less raw material to turn into coconut oil, pointing to potentially challenging times ahead in the global coconut oil market.
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Dwindling Supply a Major Challenge in the Coconut Oil Market
The demand for the coconut fruit has grown exponentially in the last decade primarily because of its versatility. Coconut is a common ingredient in many natural foods today and some coconut-derived products are coconut water, coconut sugar, and coconut oil. Unfortunately, producers have not been able to keep up with this spike in demand and the coconut supply has gone down, inevitably leading to a price rise. The demand has been particularly strong for products such as coconut water and coconut sugar which has left less raw material that can be converted into coconut oil. Different parts of the coconut are used for different products. Thus, coconut oil is in competition with other coconut products and this can pose a huge challenge to the coconut oil market. The supply has reduced because the industry itself is quite old and most trees are grown in tropical nations such as Indonesia, India, and the Philippines. These trees were planted half a century ago and are more than two decades past their prime. The coconut oil market is anticipated to grow to more than US$ 3 billion by 2022.
Foodservice and Food Processor Key in the Coconut Oil Market
Together, the foodservice and food process segment have a revenue share exceeding 2/3rd in the coconut oil market by end user segment and key stakeholders are advised to look at both extremely carefully. A revenue share of more than US$ 1.2 billion in 2022 makes foodservice particularly enticing and Europe alone contributes around 1/3rd revenue. The food processor segment is not predicted to cross a billion dollars by the end of the forecast period and companies could seek to target APEJ along with Europe as they are the largest regions by a considerable margin in the coconut oil market.
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Large Opportunity in Retail Segment of the Coconut Oil Market
The retail segment accounts for slightly over a third revenue share of the coconut oil market by end user segment which is poised to be an opportunity of more than US$ 1.1. Billion in 2022. A CAGR of 4.8% makes Europe the most attractive region and companies are recommended to take this into account while devising their long-term strategies in the coconut oil market. Along with Europe, the under-penetrated Latin America market should be well worth their time as it is also on track to record a high CAGR.
Modern Trade Twice the Size of Franchise Outlets in Coconut Oil Market
The modern trade segment is twice the size of franchise outlets in the coconut oil market and it is not estimated to lose this commanding lead anytime soon. Europe is the only region that is projected to record a CAGR of 4.7% from 2017 to 2022 which should help it strengthen its lead even more in the coconut oil market. Franchise outlets are much smaller in comparison and are only going to cross half a billion dollars by the end of 2022.
The main competitors in the coconut oil market are Adani Wilmar, Ruchi Soya, Associated British Foods, Cargill, and Archer Daniels Midlands Company.
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