Hidden Business Prospects of Coconut Products: VCO & Coconut Sugar

Coconut is a plant that is most often known and found in Indonesian society. The spread of coconut plants in almost all regions of the archipelago. Indonesian people will never be able to live without coconuts. Do you know that Indonesia is the largest coconut producer in the world?

Unfortunately, with this superior volume of coconut production, many do not realize that Indonesia has business strength from this coconut. Moreover, many also do not know that all parts of the coconut tree can be processed.

Actually there are several coconut products that have high prospects in business. However, we will only discuss processed coconut products which have the potential to be worked on by small industries, which do not require high volumes of machinery and technology but are highly appreciated by the export market. These products are Virgin Coconut Oil (VCO) and Coconut Sugar.

Prospects of Pure Coconut Oil
Copra or coconut oil products are coconut products whose potential should be further optimized. One of the high-value coconut oil products on the market is VCO, whose market demand has increased rapidly in recent years. VCO is not a commodity product like conventional coconut oil because it is sold at a much higher premium price, although it still follows conventional coconut oil prices. In various supermarkets in the United States and Europe, VCO is marketed under the tag “cold-pressed” and is a popular premium product. Compare with the situation in Indonesia, that VCO is still not highly appreciated by the market.

VCO itself has a strong image in the global market, especially the United States and Europe, as a healthy oil. This is due to its high lauric acid content (about 50%) and no trans fatty acids. Plus, its PFA (polyunsaturated fatty acid) content is lower than other vegetable oils. Thus, VCO is proven to reduce cholesterol levels and obesity. The proven efficacy of VCO can also increase the body’s resistance to disease and overcome viral diseases such as HIV. This is what causes the huge and increasing demand in the global market. Even though this market is specific for health conscious people, it has good prospects in the future especially in developed countries. VCO can be consumed directly or as cooking oil and food ingredients. In addition, VCO can also be used as a cosmetic ingredient.

However, not just any VCO product has the potential to enter the global market, especially in developed countries. There are quality standards that must be met. VCO oil must be obtained purely from fresh coconut. The process could be mechanical, but without any chemical changes. High quality VCO should smell and smell like coconut, not rancid, and runny easily. Then, visually it must be clear, translucent, and without color. There are two important content standards that will be checked by prospective buyers/importers: 1) The moisture content does not exceed 0.5%; 2) Lauric acid content is around 40-50%.

Based on ITC data, the most potential market currently for exporting Indonesian VCO products is the United States. This is because the United States is the largest importer in 2018, which reached 487 million USD. Moreover, the United States has such a large market potential for Indonesia’s VCO demand, which is estimated at 218 million USD. There is also 58% of the market potential that has not been realized worth 127 million USD (equivalent to 1.8 trillion Rupiah). Unfortunately, currently Indonesian VCO products are not ready (in terms of standards and certification) to be exported to the European market which actually also has great potential for VCO products.

Coconut Sugar Prospects
Apart from VCO, another coconut product that has received very high appreciation in the export market is coconut sugar. The appeal of sugar sugar is increasing rapidly in developed countries as a good alternative sweetener for diabetics. Almost everyone in the world believes that the low Glycemic Index content of coconut sugar (35) can slow the increase in sugar levels, which will reduce diabetes. Moreover, coconut sugar can be consumed globally such as in cake making and as a sweetener for coffee and tea. Coconut sugar also has a strong image as a more naturally processed sugar than conventional sugar.

Many are confused between coconut sugar and palm sugar. Even though they are both red in color, they are both produced from different plants. Sugar produced from palm trees does not have a strong potential for export because it has a strong smell and aroma. So that the consumption level of palm sugar is very high in the country because it is often used for cooking and making traditional cakes. This coconut sugar has the potential to be exported because the aroma and smell are more flexible