Consumers May See Price Hikes in Coconut-Based, Dairy-Free Products

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Coconut Milk - Ice Cream - Dairy-FreeAlisa Fleming ~ While almond milk-based products seem to be on a competitive race to the bottom for consumer pricing, companies focused on coconut milk are suffering a serious price squeeze.

Coconut milk is in short supply worldwide due to an increase in demand coupled with production issues. The boom in consumer requests for coconut milk-based products has helped coconut beverages, ice creams, yogurts, and creamers gain significant shelf-space. While this could in theory be excellent news for manufacturers, last year’s drought in Asia has left the coconut milk needed to produce all of these products in short supply.

According to Marc Donofrio , marketing director at Luna & Larry’s Coconut Bliss, the drought “created an environment where suppliers of coconut milk could really jack up their prices.” And jack them up they have.  The price of coconut milk has reportedly more than doubled in the past couple of years.

Consumers have directly seen this cost surge on plain canned coconut milk, but companies who purchase coconut milk for production are doing their best to mitigate retail prices. Chris Turek, the marketing director at Turtle Mountain, stated, “We do everything we can to absorb the costs and operate efficiently so we don’t pass additional costs on to consumers.”

Nonetheless, at least some of the steep price hikes in coconut milk are being passed onto the consumer in coconut milk-based products. Yet, higher prices still haven’t stymied demand, leaving Turtle Mountain and Coconut Bliss, two of the biggest coconut milk-based product manufacturers, in an even bigger pickle. They are having trouble sourcing enough coconut milk to fill product orders. Consequently, while the non-dairy industry is booming, company growth in the coconut biz has come to a screeching halt.

According to Donofrio, “We could have sold another $2 million in product this year if we had had it.” In this unforeseen downturn, Coconut Bliss has been forced to cut operating costs and implement temporary layoffs in what was already a small company.

Fortunately, both companies seem to be optimistic about securing more coconut milk supply in the future, so the damage may be short-lived.

Source: The Register Guard

  

Article by Alisa Fleming, founder of GoDairyFree.org and author of Go Dairy Free: The Guide and Cookbook for Milk Allergies, Lactose Intolerance, and Casein-Free Living. Alisa is also a freelance writer for several publications, with an emphasis on creating recipes for various types of special diets.

About Author

Alisa is the founder of GoDairyFree.org, Senior Editor for Allergic Living magazine, and author of the best-selling dairy-free book, Go Dairy Free: The Guide and Cookbook for Milk Allergies, Lactose Intolerance, and Casein-Free Living. Alisa is also a professional recipe creator and product ambassador for the natural food industry.

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