Is Coconut Water Too Good to Be True?

‘Parks and Recreation’ is joking about it, Rihanna is selling it, and you’re probably buying it—but is this beverage boom good for farmers?

The beverage in its natural packaging. (Photo: Kohei Hara/Getty Images)

May 8, 2013· 4 MIN READ
Twilight Greenaway is the managing editor of Civil Eats. She has worked as a writer and editor on the web since 2000.

Coconut water can seem almost too good to be true. Offering less sugar (and a heftier price tag) than soda, ultra-hydrating electrolytes, and a whole array of other health promises, this relatively new beverage manages to come across as an intelligent choice that is also just a little self-indulgent.

Coconut water’s image is best summed up by a recent scene from the popular television show Parks and Recreation, in which the character Anne Perkins (played by Rashida Jones) reveals she’s more into the amenities in her current boyfriend’s deluxe apartment than she is into him.

The apartment, described as “Girl Heaven,” has “fresh flowers and gossip magazines on every table,” is heated to a consistent 80 degrees, and includes an “an entire shelf in the fridge just for coconut water.”

Indeed, this tropical beverage has been labeled the “next big thing” in the industry for several years running, and it appears to be living up to its name. Thanks to endorsements from celebrities like Rihanna, U.S. sales for the “new category” of non-alcoholic drinks have doubled since 2005—and could reach $1 billion in a few short years. As the website Beverage Industry reports:

The top three coconut water brands—Vita Coco [distributed by the Dr. Pepper Snapple Group], Zico [owned by Coca-Cola], and O.N.E. Coconut Water [owned by PepsiCo]—doubled their sales between 2011 and 2012, while 100% juice sales declined 3% in the same time period…However, launches have remained stable, with 60 coconut water products entering the market in 2011, and 58 in 2012.

And yet, as the recent coverage of the economic and environmental havoc caused by the sudden popularity of crops like quinoa and palm oil illustrate, such spikes in demand for products made and grown in the developing world are bound to raise big questions about the people and ecosystems on the other end of the supply chain.

But unlike other developing-world crops, the high demand for coconut water probably won’t result in a huge agricultural shift. And that’s because—for years—the coconut water in the biggest coconut-producing nations has largely gone to waste.

“Indonesia has one of the largest concentrations of coconut farms in the world; there are areas where all you see is coconut trees for miles and miles,” said Frederick Schilling, an original founder of Dagoba Chocolate and the current owner of Big Tree farms, a business and product line focused on making tropical food supply chains more environmentally and socially sustainable. “The vast majority of the coconuts are used for copra (coconut meat), that goes to shredded coconut and coconut oil. Coconut water is still a relatively small piece of the picture.”

Or, as one farmer in the Philippines told Business Insider earlier this year, “We just throw the water away when we extract the copra.”

Unlike coconut milk, which is made by blending and straining the meaty white coconut flesh, coconut water is the same liquid that you’d find in a young, green coconut. Until a few decades ago, this water was a delicacy you had to enjoy locally (or ship inside a bulky coconut hull). Then came the addition of the tetra pack—the lined, laminated cardboard packaging that gives the product a moderate shelf life without sugar and preservatives—and new research that allowed scientists to preserve the nearly clear quality of the fresh product. (In nature an enzyme starts to change the color shortly after the coconut is cracked open.)

With changes like these, the market was ripe for cracking open as well. But just because developments have turned what was otherwise waste into a new product doesn’t mean that the coconut water industry is without its flaws. For one, the coconut water boom promises little in the way of improved livelihoods for the farmers, many of whom grow and harvest their own coconuts on small and medium smallholder plantations. Although coconuts cover millions of acres around the world, and medium and large plantations aren’t unheard of, the vast majority of the farms in countries like Indonesia, the Philippines, and India, are still no larger than five to 10 acres.

As Ewout van den Blink, director of global operations for Fairfood International, sees it, the product follows a familiar pattern. “Coconut does not immediately deviate from other products grown in developing countries. There does (especially in Asia) seem to be a problem with the supply chain, as the growers are only receiving a small portion of the revenues from selling coconut water.”

A 2012 article in TIME about the larger coconut industry, called “Why the Coconut Craze Isn’t Helping Farmers,” echoes this sentiment. So does Frederick Schilling.

“Coconut farmers are really the lowest of the low in the world of commodity farming,” he told TakePart recently.

“On average,” Schilling continued, “a farmer will sell his coconut to the general market for $0.15 to $0.25 per coconut. A tree will produce anywhere from 30 to 70 coconuts per year. So, in one year, a tree will give a farmer a maximum income of around $17.50. Think about how many trees a farmer must have in order to make a decent living.”

Meanwhile, on the retail end, one single-serving of ZICO—roughly the quantity of water in one coconut (depending on the size of coconut)—sells for around $1.50.

Schilling’s Big Tree Farms works with around 6,000 organic coconut farmers in Indonesia, where he says they pay a higher than average rate for the nuts. The company also buys the nectar from the coconut flowers to convert into several sweeteners, and employees conduct audits on farms to help farmers maximize the land. Since coconut palms grow to be very tall, there is ample opportunity for the farmers to produce other crops under the canopy, such as cacao and moringa, a shrub-like tree that can be used for medicinal and nutritional purposes.

Harmless Harvest, the makers of an alternative, raw coconut water product sold at Whole Foods and elsewhere, uses what they call an ecosystem-based approach. They work with organic farms in Thailand engaged in agroforestry —or practices that incorporate a diverse array of species into the coconut orchards. They’re outfits that cofounder Justin Guilbert describes as, “traditional, rural operations that produce for the domestic market a product meant for fresh consumption—not further processing or aggregation for international commodity.” The yield and logistics, he adds, “put the price at levels that are unappealing to conventional coconut water businesses.”

While important, improved livelihoods for small farmers is only one piece of the puzzle. The other downside to this burgeoning market, as Schilling sees it, is the tremendous amount of resources used in shipping coconut water from the tropics to places like the U.S., Japan, and Europe. It’s an argument that echoes the reasoning many top restaurants are now using to explain their switch from foreign bottled water to in-house sparkling water. Namely: It doesn’t make good environmental sense to use fossil fuel, or create unnecessary carbon emissions, shipping water halfway around the world.

With this concern in mind, Big Tree Farms developed a product called Coco Hydro, which is essentially dehydrated coconut water that can be mixed into an ordinary glass of water to add flavor, electrolytes, and other useful minerals.

“Coconut water is, on average, 97 percent water and only 3 percent nutrients,” says Schiling. “The coconut water industry is shipping millions upon millions of bottles (glass, cans, and tetra packs, which you can’t recycle) around the world. It’s water with 3 percent nutrients.”