The European market potential for coconut oil

Europe is a major importer of coconut oil. In the long term, the European coconut oil market is expected to grow 2–4% annually. This positive forecast is thanks to the perceived health benefits of coconut oil. Coconut oil is increasingly being used as a healthy ingredient, but it is also popular in cosmetics. More than half of Europe’s coconut oil supply is imported through the Netherlands. Other promising markets are Germany, Spain, Italy, France and Greece.

1. Product description

Coconut oil is oil obtained from the coconut kernels, or the “meat”, of the Cocos nucifera tree. Crude coconut oil is produced from dried kernels (copra). However, it needs to be refined, bleached and deodorised (RBD) before it is suitable for consumption. When the oil is only pressed using mechanical procedures, it is called “virgin”. When it is produced without heating, it is cold-pressed. RBD coconut oil can also be produced as a solid white fat through a hydrogenation process. It is mostly used in Europe as an ingredient in food and cosmetic products.

Processing coconut oil can involve many steps and a lot of different equipment. Some of the major processing steps are illustrated below.

Crude coconut oil

• Dehulling (cracking the shell) to take out the kernel
• Cutting and drying of kernels
• Oil extraction (usually by pressing in screw presses, or “expellers”)
• Filtering
• Sedimentation
• Solvent extraction can be an additional step to recover the residual oil from the cake

Refined bleached and deodorised coconut oil

• Treatment with acids and antioxidants (to remove phospholipids and extend the shelf life)
• Heating
• Bleaching (with a mixture of bleaching earth and activated carbon)
• Deodorisation (with hot steam under a vacuum)
• The side product is Coconut Fatty Acid Distillate, which is used as an ingredient in soap production

Virgin coconut oil

• De-husking, cracking and removal of brown testa
• Blanching and draining
• Grinding
• Pressing
• Centrifugation/separation
• Filtering

Crude and virgin coconut oil has a pleasant odour and taste, while RBD oil has very little odour. Depending on the production process, 15 to 20 coconuts are usually needed to produce 1 litre of coconut oil.

This study covers general information regarding the coconut oil market in Europe that is of interest to producers in developing countries. When the study refers to “Europe”, this means the 27 Member States of the European Union, plus the United Kingdom, Switzerland, Norway, Iceland and Liechtenstein. Developing countries are defined as countries listed as official development assistance recipients. 

The following combined nomenclature codes are used for statistical analysis.

Table 1: Products in the coconut oil product group

Source: Autentika Global, TARIC, 2024

As a reference for the remainder of this report, 1 kg of coconut oil is equivalent to approximately 1.09 l in volume. 

2. What makes Europe an interesting market for coconut oil?

Europe is the largest importer of coconut oil in the world, accounting for over 40% of global imports. Due to climatic conditions, it is not possible to produce coconuts in Europe. This means demand is met entirely through imports. European edible oil processors do not import copra for the production of coconut oil. However, some import crude coconut oil for further refining. The coconut oil consumption in Europe is expected to increase due to its perceived health benefits. 

Demand for coconut oil in Europe is stable, but imports fluctuate due to variable production in the main supplying countries. The decline in imports in 2023 was the result of lower production in both the Philippines and Indonesia, the leading global producers. Another reason for the lower imports was price inflation and the energy crisis caused by the war in Ukraine. Regular fluctuations in imports will continue due to coconut crop yields and the price situation, rather than changes in demand. In the long term, demand is expected to increase. 

Source: ITC TradeMap and Eurostat, 2024

In 2022, European coconut oil imports reached a historical peak of 745,000 tonnes. However, they decreased to 662,000 tonnes in 2023. In the long term, imports are forecasted to increase at an annual growth rate of 2–4%. In 2019, only one-third of imported coconut oil was processed. However, in 2023, the import share of processed coconut oil increased to 46%. This is the result of the growing cost of the workforce in Europe and the vertical integration of supply chains. 

Value addition in coconut processing countries is a promising trend for coconut processors. The import share of processed and virgin coconut oils is growing, while crude copra oil imports are decreasing. Most crude coconut oils are produced by large companies and exported to European refineries. To avoid high competition and production investments, the best opportunities for SMEs from developing countries can be found in sustainably produced virgin coconut oil. 

Consumption characteristics

The total consumption of coconut oil in Europe is estimated to be around 630,000 tonnes. This means consumption is almost equal to imports from developing countries. Around 60% of coconut oil is consumed as a food ingredient, while the remaining 40% is used by other industries. Using copra cake as animal feed in Europe is insignificant, as most refineries have stopped importing copra. 

Coconut oil is often used for frying in coconut-producing countries; however, it is more commonly used as a food ingredient in Europe. In the retail segment, coconut oils are sold more as solid fats than in liquid form. Currently, more coconut oil is consumed by the food industry than is used in home cooking.

Source: Foreign Agricultural Services EU, 2024

Most coconut oil in Europe is imported from developing countries as crude oil, which is further refined by European refineries. Less than 6% is imported as processed, while the import of retail-packed products is insignificant. Most retail-packed oil is re-packed in Europe after being imported.

Source: Autentika Global and Eurostat, 2024

The Netherlands imports significantly more coconut oil than any other European country. This is because of the large oil refineries in the port of Rotterdam, which are vertically integrated with coconut oil producing countries. The multinational giant Cargill imports most of the crude coconut oil in the Netherlands. Cargill has its own refinery in the port of Rotterdam, which is connected with its processing facilities in the Philippines and Indonesia. 

Source: ITC TradeMap, 2024

3. Which European countries offer the most opportunities for coconut oil?

Coconut oil exporters from developing countries may find opportunities in large European consuming and processing markets, such as Germany and the Netherlands. Opportunities for value added products can also be found in other large markets with high imports from developing countries, such as Spain, Italy and France. Opportunities can also be found in smaller but fast-growing markets such as Greece or the Baltic countries. 

Source: Autentika Global, Eurostat and ITC Trademap, 2024

The graph above shows apparent consumption; the difference between production and imports minus exports. The data includes industrial consumption, which contributes to a significant share of imports. Production volumes vary year on year. This creates the misperception that demand constantly fluctuates.

The Netherlands: A leading processor and trader of coconut oil in Europe

The Netherlands is the second largest importer of coconut oil in the world, after the United States. Dutch imports of coconut oil have fluctuated significantly over the last five years, due to production in leading supplying countries. In 2023, imports reached 355,000 tonnes and a value of €367 million. Nearly 190,000 tonnes were re-exported to other destinations, primarily to Germany, Belgium and Poland. A significant share of imports is refined before exporting. 

In 2023, crude coconut oil for food use accounted for almost 90% of all imported coconut oil in the Netherlands. This oil is mostly imported in bulk, usually in shipping tankers. Most crude coconut oil is refined after import in the port of Rotterdam. The port of Rotterdam is the home of several edible oil handling and storage companies and seven refineries, with Cargill being the largest crude coconut oil processor. 

In 2023, the Netherlands imported 70% of its coconut oil from the Philippines, followed by Indonesia (25%), Germany (2%) and Belgium (2%). Relatively smaller suppliers include Sri Lanka, Malaysia, Vietnam, India and Ghana. Most coconut oil in the Netherlands is used by the food industry, but retail sales are growing. As the temperature in the supermarkets is usually below 25°C, coconut oils are mostly sold as a solid fat. 

Demand for sustainable, organic and virgin coconut oil is growing. Many Dutch processors and buyers are members of sustainability initiatives, such as the Sustainable Coconut Partnership. Processors and traders of organic and sustainably-produced coconut oil in the Netherlands include Tradin Organic and Spack. Another trend is the demand for Medium-Chain Triglycerides (MCT) coconut oil due to its perceived health benefits.

Most coconut oil in the Dutch retail segment is sold as a solid fat and often as organic. Important brands include Biofan (by FZ Organic Food), Biotoday (by de Smaakspecialist) and Valle del sole (by Unidex). Significant quantities are sold by the leading retail chains under private labels, such as Albert Heijn (AH label), Aldi (Mama Nature label), Jumbo (Jumbo label) and Lidl (Vita D’Or label).

Figure 6: Private label of coconut oil in the Netherlands (Jumbo)

Source: Photo by kiliweb with additional modifications by bertusdendroef per Open Food Facts, Creative Commons Attribution-Share Alike 3.0 Unported license

Germany: The leading European consumer of coconut oil

Total imports of coconut oil to Germany have increased at an average rate of 1% every year since 2019. In 2023, Germany imported 215,000 tonnes of coconut oil worth €283 million. Unlike the Netherlands, most imported coconut oil is crude oil for industrial use (42%), followed by refined and processed oil (25%) and crude coconut oil for food use (23%). A lot of coconut oil in Germany is mixed with other oils to produce biodiesel.

Indonesia is the leading supplier of coconut oil to Germany (35% share, mostly crude oil), followed by the Netherlands (31%, mostly refined oil) and the Philippines (25%, mostly crude oil). Of the leading suppliers, Belgium has grown the fastest, increasing its exports from 2,300 tonnes in 2019 to 6,500 tonnes in 2023. India, with 211 tonnes in 2023, and Ghana, with 51 tonnes, are two notable emerging suppliers with increasing yet still modest imports.

As the largest market in Europe for organic products, Germany provides opportunities for suppliers of organic coconut oil. The food and cosmetics industries both use large quantities of organic coconut oil. Specialised importers of organic coconut oil in Germany include All Organic Treasure, Delphi Organic, Ölmühle Moog (BIO PLANÈTE brand) and CARE Naturkost. They often pack coconut oils and sell to specialised organic retailers, such as Bio Markt, Alnatura, tegut, ebl-Naturkost, dm and Super Biomarkt. 

In the retail segment, most coconut oil in Germany is sold under private labels of leading retail chains REWE (mainstream supermarket chain), Edeka (mainstream supermarket chain), Lidl (discounter), Aldi Süd and Aldi Nord (discounters) and Metro (specialised in food service supply). Independent brands are mostly organic. The most notable are BIOASIA (by Kreyenhop & Kluge), Bio-Zentrale, Dr Goerg and Rapunzel.

Figure 7: dm Bio organic coconut oil (private label of the German retail chain dm)

Source: Autentika Global

Spain: Rising importer, trader and consumer

Spain is one of only a few countries in Europe where imports of coconut oil grew in 2023 despite inflation. Since 2018, imports of coconut oil in Spain have increased at a high annual rate of 14%, reaching over 90,000 tonnes in 2023, at a value of €105 million. More than 90% of coconut oil in Spain is imported as crude, then processed and traded by large refining companies. The Louis Dreyfus Company is one of the largest traders of crude coconut oil in Spain.

The Spanish coconut oil market overall is quite concentrated and mainly dependent on imports from the Philippines. In 2023, Spain imported 80% of its coconut oil from the Philippines, followed by Italy (10%), the Netherlands (4%) and Belgium (2%). Aside from the Philippines, direct sourcing from coconut processing countries is very rare and mostly represented by Indonesia (1.2% share) and Sri Lanka (0.7% share). 

One particularly interesting development in Spain is the change of the media’s attitude towards coconut oil. Several years ago, online media published articles about how coconut oil was inferior to olive oil. The goal of this negative media campaign was probably to protect Spain’s status as the largest producer of olive oil from the increasing popularity of coconut oil. However, over time, some olive oil companies have recognised the market potential of coconut oil and even included it in their own product range, such as Acesur.

Aside from large crude coconut oil processing and trading companies like Louis Dreyfus and Cargill, retail-packed and organic oils are growing in popularity. Laboratorios Almond is the largest packager of coconut oil in Spain and it supplies most retail chains. The largest share of retail sales of coconut oil consists of private label brands of Spanish retailers, such as Mercadona, Carrefour, Lidl and Eroski. 

Italy: A small direct-sourcing importer

Italian coconut oil imports have been growing at an annual rate of 2%. They reached 89,000 tonnes and were valued at €123 million in 2023. Almost half of its imports are sourced from European traders and refineries. The only significant supplier to Italy is the Philippines (with mostly crude coconut oil). The share of other coconut oil processing countries is small and consists mostly of Sri Lanka (a 0.5% share in 2023), the Dominican Republic (0.1%) and India (0.02%). 

Indonesia, although the second-largest producer of coconut oil globally, has no direct exports to Italy. This is because most of Italy’s coconut oil is sourced from large European companies and refineries. Imports from Spanish traders amounted to 25% in 2023, followed by the Netherlands (13%) and Germany (4%). The largest coconut oil processors and traders in Italy are Unigra and Joe & Co.

Organic virgin coconut oil sales are growing in Italy and are represented by several brands. Several Italian olive oil bottling companies have also started to pack and sell coconut oil. Pietro Coricelli (Ethnos brand) and Compagnia Alimentare Italiana (Fratelli Mantova brand) are two olive oil brands that sell coconut oil. Coconut oil is packed and sold by specialised organic food companies, such as Probios and Bordoni. It is also sold under the private labels of leading Italian retail chains, such as Conad, Selex, Coop and Esselunga. 

France: Opportunities for emerging suppliers

French imports of coconut oil reached 49,000 tonnes in 2023, valued at €74 million. Although the French market is not as large as the market of the leading importing countries, it provides more opportunities for smaller suppliers. The French market is not very concentrated, nor is it dominated by a single supply country. In 2023, the Philippines was the main supplier of coconut oil to France with a 23% share, followed by the Netherlands (22%), Indonesia (22%) and Spain (14%).

France imports coconut oil from a range of coconut processing countries other than the leading global producers (the Philippines and Indonesia). These countries include French Polynesia, Sri Lanka, Singapore, India, Malaysia, Colombia and Thailand. The position of French Polynesia is notable because almost all of its exports are to France. It has an insignificant presence in other markets (aside from in Belgium). This close relationship is the result of French Polynesia having been a French overseas territory. 

The leading type of coconut oil imported to France is processed and refined bulk oil, which made up a 30% share of imports in 2023. This is followed by crude coconut oil for non-food industry processing (28%), crude coconut oil for food use (24%) and refined coconut oil for non-food use (13%). Coconut oil traders in France can be general edible oil suppliers and processors (e.g. Olvea group), organic food traders (e.g. Actibio), Asian supermarkets (e.g. Tang Freres), specialised retailers (Cauvin) and cosmetic companies (Natessance). 

Coconut oil is becoming increasingly popular in France, and different types of traders import it. Sustainable sourcing has become very important. Many French coconut oil traders have strong connections with coconut oil sourcing communities and sustainable production practices. One notable example is La Maison du coco, which sources coconut products from organic and Fairtrade-certified suppliers. 

In the retail market segment, the most popular product is organic virgin coconut oil. Large volumes of organic virgin coconut oils are sold under the private labels of retail chains, such as Carrefour (Carrefour Bio label), Leclerc (Bio Village label) and Auchan (Auchan Bio). Suppliers of private labels also pack organic virgin coconut oil under their own brands, such as Jardin Bio (by Lea Nature), La Tourangelle and Abel (by Huilerie Lapalisse). All the main French retail chains use nutritional labelling (Nutri-Score) for food products.

Belgium: An importer of processed and refined coconut oils

Over the past five years, Belgian imports of coconut oil have slightly decreased due to price inflation and the unstable supply from the main production countries. However, imports in 2023 were still significant, reaching 41,000 tonnes, valued at €70 million. Even though Belgium’s import quantity was much lower than France’s, the import value was almost the same. This is because Belgium imports relatively small quantities of crude coconut oil; most of its imported coconut oil is processed or refined. 

Coconut oil imported to Belgium comes from several emerging supplying origins but most of the oil is still sourced from other European traders and processors. In 2023, Belgium imported 62% of its coconut oil from the Netherlands, followed by France (17%), Germany (7%), Spain (6%) and the Philippines (5%). Although  95% of the imports are from European countries, there are several smaller supplying countries whose supply to Belgium is growing. These include São Tomé and Príncipe, Sri Lanka, Ghana, French Polynesia and Ivory Coast.

In the retail market segment, most coconut oil is sold under the private labels of leading supermarket chains, such as Colruyt, Delhaize, Carrefour, Aldi and Lidl. Similar to France, most retail-packed coconut oil is virgin and organic. Belgian retailers also use Nutri-Score nutritional labelling. Aside from private labels, there are several established brands of coconut oil retail suppliers, including Terra Sana, Kazidomi and de Notenshop. 

4. Which trends offer opportunities or pose threats in the European coconut oil market?

The growing consumer interest in coconut oil in Europe is shaping the market through three main driving forces: the increasing demand for sustainably-produced coconut oil, increased demand for organic certification of virgin coconut oil and the promotion of coconut oil’s health benefits.

Social and environmental sustainability has become very important in coconut oil sourcing

Several factors pose a threat to the sustainability of coconut oil production, particularly low farmer incomes. Danida Green Business Partnerships has reported that around 1.75 million farmers in the Philippines live below the poverty line (<$2.15 per day). Consumer organisations are becoming aware of social issues in developing countries and are increasingly demanding ethical practices behind the products they consume. This puts pressure on producers and suppliers to address the sustainability issues in their value chains.

To address sustainability challenges in coconut production, several industry leaders working in collaboration with development aid organisations created the Sustainable Coconut Partnership in 2023. This association was based on a previous initiative from 2019: the Sustainable Coconut Charter. The Sustainable Coconut Partnership unites the industry’s stakeholders to positively affect farmers’ livelihoods by establishing industry-wide best practices and impact programmes.

To encourage companies to take better care of human rights and pay more attention to the environmental impact in their supply chains, the European legislation on due diligence entered into force in July 2024. To comply with this objective, several European and international companies have launched their own support projects in coconut-producing countries. One notable example is Cargill, the leading coconut oil processor in the Philippines.

More coconut processing companies are now making efforts to produce more sustainable coconut oil. One example is Sweden-based AAK, which sources coconut oil from the Philippines and Indonesia. AAK worked with Proforest to carry out a risk assessment and increase smallholder farmers’ income and livelihoods, enhance supply chain traceability and prevent deforestation. Following its action plan, AAK disseminated almost 8,000 seedlings and reached 100% traceability through direct sourcing. 

AAK’s work with suppliers is a good example for coconut processing companies. AAK motivated suppliers to follow social audit schemes and successfully convinced 48% of its suppliers to enrol in the SEDEX platform to ensure that managers of coconut processing factories follow labour standards on health and safety and ethics. 

Aside from international players in the coconut supply chain, there is also an increasing number of local companies that follow sustainability principles. One example is the Sri Lankan company Cocotana. Cocotana is a Fairtrade-certified company that pays premium prices to communities that grow coconuts. They also support coconut-farming communities by providing agricultural materials and machinery, by donating coconut seedlings, giving to local schools and supporting better healthcare facilities. 

Kentaste, East Africa’s leading producer of coconut products, has been sourcing coconuts from organic-certified smallholder farmers to supply buyers in Europe, the United States, Africa and the Middle East. The company’s product range has grown considerably and includes coconut oil and several other products. The company sources its coconuts from more than 3,200 smallholder farmers in over 63 rural villages across the Kenyan coast. Moreover, 50% of these farmers are organic and Fairtrade certified.

The health benefits of coconut oil are becoming better understood

Several years ago, the internet was overflowing with claims about coconut oil health benefits that were not based on scientific evidence. At the same time, there was an online campaign against the consumption of coconut oil, which was also based on unreliable sources. Many promoters of olive oil consumption published articles online to prevent the consumption of coconut oil in Europe and to protect the olive oil sector. The current trend in the promotion of coconut oil is based more on clinical research, although even more research is needed to understand its effects. 

The Nutri-Score system, which is used for retail packed-food to inform consumers about the nutritional value of food, underwent significant changes in 2023. Some of the strongest requests for change came from the olive oil producing countries, especially Italy, as olive oil was given a “C” by the Nutri-Score algorithm. Now, olive oil and rapeseed oils have been given “Bs”. This is because of their high content of “good fat” – a blend of omega-6 and omega-3 fatty acids. 

Similarly, sunflower oil’s Nutri-Score improved, it went from a D to a C. However, coconut oil still has a score of E, as it contains high levels of saturated fat. Higher scores for oils produced in Europe may be connected to the strong lobbying from the oil producer associations in Europe. Meanwhile, coconut oil, which is not produced in Europe, had insufficient influence to impact the Nutri-Score creators. 

Most coconut oil (65%) is made up of medium-chain triglycerides (MCTs). These are triglycerides and fatty acids with chains of between six and ten carbon atoms. Several studies suggest replacing calories with MCTs without exceeding the daily caloric requirements, which can result in a small but a significant increase in the rate of fat loss over time. This effect appears to be slightly stronger in overweight people.

Coconut oil may also temporarily increase the metabolic rate and the speed at which fats are broken down to release fatty acids. This process known as lipolysis. Lipolysis occurs when coconut oil is first added to the diet and disappears after two weeks. Coconut oil also creates more ketone bodies than longer chain fatty acids when broken down. One study has provided evidence that this mechanism causes coconut oil to provide obese people with muscle-preserving effects during caloric restriction.

Several brands in Europe have now recognised the importance of MCT in the human diet and have started to specifically label coconut oil with the MCT mark. MCT coconut oil contains more MCT than regular coconut oil due to its production process. It is produced by being gently heated to separate the fatty acids based on their melting points. MCT has a lower melting point and can be separated from the solid fat as a liquid.

Examples of brands that pack MCT coconut are Hunter & Gather (the United Kingdom), Nature’s Aid (the United Kingdom), Ancient + Brave (the United Kingdom), Bio Today (the Netherlands), Naturitas (Spain), Zdravy Svet (Slovakia) and Health Link (the Czech Republic). Several brands of MCT coconut oil also promote its use in the Ketogenic diet. The Ketogenic diet is a high-fat, adequate-protein and low-carbohydrate diet. The brands include specific KETO diet brands Go Keto (the Netherlands) and Drasanvi (Spain). 

Figure 8: Example of the MCT coconut oil brand in the Netherlands (Matisson)

Source: Photo by kiliweb per Open Food Facts under the Creative Commons Attribution-Share Alike 3.0 Unported

Organic virgin coconut oil has become a retail mainstream

According to Innova Market Insights, around 15% of all new product launches in Europe in 2022 and 2023 were certified as organic. On the global level, almost 60% of organic product launches were recorded in Western Europe, followed by North America with a share of 16%. It is forecasted that the consumption of organic products will continue to increase. The European Commission aims to dedicate 25% of all its farmland to organic agriculture by 2030.

Many European producers and traders of coconut oil are following this trend by launching new brands. As most of the coconut oil imported in Europe is crude and intended for refining, most imports are not organic. According to industry insights, around 2% of all imported quantities are organic. However, this share is much higher in the segment of virgin coconut oil. It is already above 10% and increasing further. Currently, Sri Lanka is the dominant supplier of certified organic virgin coconut oil to Europe.

The production of virgin coconut oil does not require any expensive processing equipment compared to the equipment needed to refine crude oils. This provides an opportunity for many small producers in developing countries, especially when the oil is certified as organic and when production follows social and ethical principles. Most leading coconut oil producing countries have already established national standards and specifications for virgin coconut oil.

The current trend in the retail sales of virgin coconut oil is to promote naturalness and quality through labels such as “raw virgin”, “extra virgin”, “cold pressed”, “raw extra virgin”, “natural” and “100% pure”. These labels can confuse consumers as there is no official European standard for grading virgin coconut oil. National standards of coconut oil producing countries are not harmonised, and labelling is not regulated. In line with label launches, coconut oil producers are increasing their efforts to better inform clients about virgin coconut oil quality. 

Although the basic definition of virgin coconut oil is the absence of chemical refining, bleaching or deodorising, there is still insufficient clarity about quality grading. Basic grading from the lowest to the highest quality is not simple, and there are several factors that affect quality. Even with the same production method, agricultural practices, moment of harvest, coconut cultivar and quality of copra, oil quality can vary. Basic production factors used when promoting virgin coconut oil’s nutritional quality are:

• Superiority of oil obtained from the fresh kernels compared to oil obtained from dried copra.
• Superiority of “cold-pressed” oil compared to oil produced with the application of heat.
• Superiority of centrifuged virgin oil compared to “cold-pressed” oil.

These three factors can increase the selling price of virgin coconut oil but decrease productivity. For example, the centrifugation process results in a milder taste and more nutrients, but the yield is lower compared to using presses and heating. 

Autentika Global carried out this study on behalf of CBI.

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