• The world drinks more coconut water than ever, but the island nation that grows it in abundance is late to the party

At a supermarket in London, a 10 oz bottle of Harmless Harvest coconut water sells for $ 48 per pack of 12. Across the Atlantic, Vita Coco occupies shelf space at Whole Foods and CVS, backed by a market capitalisation of $ 2.27 billion as of September. 

In 2022, the global coconut water market was worth $ 4.3 billion. By 2032, it is projected to reach $ 22.8 billion, according to The Brainy Insights.

Thailand bottled over 454 million litres of coconut water last year, based on data from the Government of the Netherlands. Sri Lanka managed just 8.7 million litres. Both nations grow coconuts, but only one has built a global beverage brand around them.

Thai products are a regular sight in supermarkets from Berlin to Los Angeles. Sri Lanka, where coconuts are part of daily life, has barely made a dent. The island grows nearly three billion nuts a year, yet exports only a sliver as water. Most of it is consumed fresh or discarded during processing.

Despite the fruit, the climate, and a globally recognised name, Sri Lanka remains stuck in bulk exports. Bottled coconut water is an afterthought. Very little is packaged and even less makes it to foreign shelves. So how did a country so rich in coconuts miss one of the decade’s most lucrative natural beverage trends?

The road not bottled

The problem is not a shortage of coconuts. The Coconut Development Authority (CDA) estimates annual production hovers between 2.5-3 billion nuts, with around 60% used domestically. Coconut is central to Sri Lankan cuisine, culture, and rural economies. But its commercialisation, beyond copra and desiccated coconut, has been slow.

Speaking to The Sunday Morning, CDA Chairman Shantha Ranathunga admitted that exports remained a fraction of what they could be, especially when compared with countries like Thailand and Indonesia.

“When it comes to coconut water exports, we haven’t really tapped into that compared to Thailand and Indonesia,” he said. “We export only a very small quantity compared to the overall coconut consumption of the country.”

He explained that more than half of Sri Lanka’s coconuts – around 60% – were consumed domestically. The remaining 40% goes to factories and industries. Even within that share, coconut water is only now being systematically collected.

Until recently, much of the water from mature nuts used for oil or copra was discarded. Even now, a large portion of coconut water in Sri Lanka is treated as waste during processing. 

In global markets, however, the opposite happened. Beverage brands positioned coconut water as a natural sports drink, rich in electrolytes and low in calories. Marketing helped turn a farm byproduct into a lifestyle beverage.

As the world acquired a taste for it, others moved fast. Thailand, with only a fraction of Sri Lanka’s coconut output, built a sophisticated processing and bottling industry around young coconuts. The Philippines capitalised on scale. Indian exporters, especially from Tamil Nadu and Kerala, found niches in the Middle East. Brazil, home to the green-skinned coco verde, became a dominant player in Latin America and Europe.

Sri Lanka, with few bottling facilities and underdeveloped cold chain infrastructure, failed to scale up. The few companies that do export coconut water operate on limited volumes and face logistical constraints.

High costs, low incentives

Exporting coconut water is not merely a matter of harvesting and bottling. The product is highly perishable. To reach distant markets, it must be pasteurised or flash-frozen and packed in sterile Tetra Paks or PET bottles. This requires cold sterilisation plants, microbiological testing labs, and compliance with food safety regulations in importing countries, none of which come cheap.

CDA Chairman Ranathunga stated that processing coconut water required specialised equipment. 

“Once it is taken out, it should be cooled and kept under minus four degrees. There should be a coconut tank – a cooling tank – in the manufacturing industries. Most factories did not have them earlier, but now many have installed coconut water cooling tanks,” he explained. 

Companies collect the water daily from these tanks, transport it in cooling containers to their facilities, and process it for export.

Ranathunga acknowledged that the investment needed was significant. “A huge amount of investment is needed, but compared to the other coconut products, coconut water is a lucrative business,” he said.

Based on research, processing infrastructure for perishable coconut products remains underdeveloped outside the Western Province. Moreover, freight costs from Sri Lanka remain higher than regional competitors due to limited container traffic and the country’s ongoing macroeconomic troubles.

“We could compete if we had the scale,” said a grower from Kurunegala. “But the investment needed to set up a proper bottling plant is too high for individual exporters, and banks are not lending easily.”

Sri Lanka’s interest rates, which surged past 20% in 2022 during the peak of its financial crisis, came down gradually but still remain elevated for many people. For Small and Medium-sized Enterprises (SMEs) in the agriculture sector, borrowing for capital expenditure remains difficult. 

Meanwhile, foreign investors are wary, given the island’s recent default and debt restructuring complications.

As a result, the few Sri Lankan brands selling coconut water abroad often do so through private label partnerships. “We sell under a foreign label. The brand is theirs, the coconuts are ours,” said one exporter. “It pays the bills, but we’re not building global equity.”

A missed branding opportunity

That equity matters. Coconut water is a branding game. 

Harmless Harvest, for instance, markets its water as ‘pink’ due to natural oxidation, a quirk that became a selling point. Vita Coco built its brand around New York-style cool, then went public in 2021. Zico, once owned by Coca-Cola, is now back in founder hands, tapping into the clean-label wellness trend.

Sri Lanka, which built a powerful narrative around Ceylon Tea, has not replicated that success in coconut products. The ‘Ceylon coconut’ label exists, but it lacks the global recognition or promotion enjoyed by Ceylon Cinnamon or Pure Ceylon Tea.

“There is potential to brand our coconut products as organic, ethical, and single-origin,” said the exporter. “But we haven’t invested enough in telling that story. The market is there. The identity is not.”

This is especially relevant as consumers in the West grow more conscious about provenance, sustainability, and ethical sourcing. Sri Lanka’s smallholder-based coconut economy could tick many of those boxes if properly certified and marketed.

Yet, unlike tea, which has a centralised board and powerful exporters, the coconut sector is more fragmented. Multiple agencies, overlapping mandates, and lack of cohesive policy have hindered sectoral coordination. The CDA, the Ministry of Agriculture, the Export Development Board, and private industry rarely move in sync.

Glimmers of change

Still, some change is underway. A handful of domestic brands are experimenting with premium packaging, targeting niche wellness markets abroad. One such brand, launched a couple of years ago, now exports to Germany and Singapore, focusing on organic certification and carbon-neutral packaging.

“Earlier, there was only one factory that collected coconut water and made coconut water for the export market. Now we have authorised a few more companies. We have registered four companies to collect coconut water and they have begun operations,” Ranathunga said. 

He added: “In the next year, or even this year, coconut water exports may be higher than in previous years.”

As for demand, Ranathunga described it as strong across multiple regions. “There is very good demand in China, Japan, and most other countries, and the US is the best destination. In Europe, also, there is very big demand. But we don’t have sufficient supply.”

North America and Europe are seeing rising demand for natural drinks, with coconut water gaining market share not just as a refreshment but also as a mixer in health-conscious cocktails. The Asia-Pacific remains the largest consumer base, but premium niches in Japan and South Korea are also expanding. 

Sri Lanka’s model, however, differs from Thailand’s. “If you take Thailand, they have a different variety of coconuts, which makes more water. They are not concerned about kernel products – the inner coconut. They focus only on coconut water,” Ranathunga said, adding: “Most of the coconut trees there are cut young for water. They are not concerned about mature coconuts for milk, oil, or husk products. In Sri Lanka, this is very rare; we are not promoting that.”

The next harvest

The global coconut water wave is still rising, but it will not wait forever. Competitors are moving up the value chain, adding flavours, probiotics, and plant-based blends. Innovations like sparkling coconut water and coconut cold brew are entering the shelves.

Sri Lanka’s strength lies in its abundance, its proximity to India, and its potential for clean-label branding. But those advantages mean little without bottling plants, certifications, and brand-building muscle.

According to the statistics published by the Government of the Netherlands, the export of coconut water from Sri Lanka is growing at a slow yet stable rate, rising from 5.5 million litres in 2022 to 8.7 million litres in 2024. 

Ranathunga stressed that Sri Lanka viewed coconuts as a versatile crop. “The coconut is a very valuable nut, from which we can take kernel products, shell products, husk products, etc. There are many varieties of export products that we are making out of coconut,” he said.

Unless policies align, investments materialise, and branding efforts scale up, the country risks being a supplier or a slow grower in a market where value is captured by the brand that tells a better story.