15 Ways on How Profitable is Coconut Business

How Profitable is Coconut Business: Coconut has the potential of generating over N10 billion annually for farmers and agribusiness entrepreneurs.

For example, some state has the potential for the production of more than 10 million coconut trees.

With annual production of over 1 billion husked nuts worth over  45 billion.

Total yield: 25 x 80 = 2,000 nuts per acre. The income from the farm: (total yield x sale price of each nut) = 2,000 x 25 = Rs 50,000. Profit from the farm: (total income – total investment in the 6th year) = Rs 50,000 – Rs 26,400 = Rs 23,600.

How Profitable is Coconut Business:BusinessHAB.com
How Profitable is Coconut Business

How Profitable is Coconut Business:

Coconut grows naturally along coastal terrains and is cultivated in over 90 countries of the world.

Such as Nigeria, India, Indonesia, Philippines, Sri-Lanka etc.

A wide range of coconut products are internationally traded.

There are more than 50 unprocessed, semi processed or processed coconut products.

Entering the international markets in small and big quantities.

For example, coconut water has gained popularity over the last few years—not only as refreshment .

How Profitable is Coconut Business:

But also as a sports drink. Coconut water is by far the leading plant-based water available for sale worldwide.

In the years ahead, coconut water accounted for 96% of the volume share in the global sale of all plant-based water with over 700 million liters sold and with a market value of about $2.2 billion.

Aside from the well-know exports of copra and coconut oil, other exports.

How Profitable is Coconut Business:

Which have a significant volume are desiccated coconut, copra meal, cocochemicals (fatty acids, fatty alcohol, methyl ether), shell charcoal and activated carbon, fibre products, coconut cream, milk, flour and nata de coco.

Currently, the production output of dehusked nuts in the country is about 267,520 metric tonnes.

Which is used in the production of less than 1,500 metric tonnes of coconut oil.

According to the United States Department of Agriculture, coconut oil domestic consumption is about 7,000 metric tonnes thus leaving a supply gap of about 5,500 metric tonnes per annum.

How Profitable is Coconut Business:

There are  key areas that can help drive profitability. These are reducing costs, increasing turnover, increasing productivity, and increasing efficiency.

You can also expand into new market sectors, or develop new products or services.

This guide explains how to assess your business’ profitability, deliver growth for your bottom line, and how to plan and manage change.

How Profitable is Coconut Business:

1. Get the best Product Coconuts

There are about 10 common types of coconuts which are:

  • West Coast Tall Coconut
  • East Coast Tall Coconut
  • Mayan Coconut
  • Tiptur Tall Coconut
  • Orange Dwarf Coconut
  • Green Dwarf Coconut
  • Malayan Yellow Dwarf Coconut
  • Fiji Dwarf Coco King Coconut
  • VHC1 Coconut
  • Macapuno Coconut

How Profitable is Coconut Business:

2. Know the Business Opportunities in Coconut business

a). Cosmetic Production:

Coconuts serve as a moisturizer and is used in the production of both body and hair creams.

b). Production Of Oil:

Coconut produces oil, which serves various uses and is very healthy for cooking meals.

c). First Aid:

Coconut oil serves as first aid for bruises and minor burns

d). Production of Non-Dairy Milk:

Coconut produces a healthier substitute for dairy milk.

How Profitable is Coconut Business:

3. Pricing considerations

Its a good idea to review your pricing regularly.

Changes in your marketplace may mean that you can raise your prices without risking sales.

However, it’s wise to test any price rises before you make them permanent.

4. Find your best customers

It’s not just your price list that affects your profitability – the type of customers youre selling to can also make a big difference.

Focusing on your most profitable customers – even if it means letting the less profitable ones go – could boost your profitability, so long as it is handled carefully.

How Profitable is Coconut Business:

5. Can you sell more to your best customers?

You may also be able to sell more to your most profitable customers. Consider the following opportunities:

  • up-selling – selling them premium products that make a greater contribution to your profit
  • cross selling – analysing what they buy and offering complementary products
  • diversifying – identifying a need and developing new products and services to meet them.

6. Buy more effectively

One of the most obvious routes to increasing your profitability is to buy more effectively.

It makes sense to review your supplier base regularly and see if you can buy the same raw materials more cheaply or efficiently. However, try to ensure that you maintain quality at the same time.

How Profitable is Coconut Business:

7. Get the best deal from your suppliers

Identifying your key areas of expenditure will show where you spend most money.

Once you know where your money is going, shop around. Try bargaining with your suppliers – ask if you can have price reductions or discounts for early payment.

Consider using your status as a valued customer to agree long-term contracts or realistic annual minimum spends with regular suppliers to obtain a better price.

You could also buy as part of a consortium with other similar businesses.

If you cant strike a better deal, consider switching to other suppliers.

Review the number of suppliers you use. Buying from too many can be inefficient.

It takes up more time and dilutes your buying power.

However, avoid placing all your business with one or two suppliers.

It could leave you very vulnerable if things go wrong.

How Profitable is Coconut Business:

8. Cut waste throughout the business

A review of common areas of waste could help you see how to reduce them, for example:

  • Can you cut your power costs, e.g. is all equipment turned off when it’s not being used?
  • Are you getting the best deals from your power suppliers?
  • Are you paying for unused services e.g. unused phone lines or photocopiers?

Consider whether you’re getting the best from your property. Your premises are a large expense , so get the most from your investment or rental agreement:

  • Can you use your space more effectively by rearranging it?
  • Could you sublet unused areas?
  • Could you negotiate a lower rental if you agree to a longer contract?

9. Concentrate your sales efforts

There are two key strategies for boosting profitability through sales.

Selling more to existing profitable customers and finding similar customers to sell to.

How Profitable is Coconut Business:

10. Work with your best customers

You should know who your best customers are, what they buy and when they buy it.

You can usually put your customers and the products or services they buy into one of four categories:

  • high sales and high profit
  • high sales and low profit
  • low sales and high profit
  • low sales and low profit

It makes sense to encourage customers that provide high sales and high profit.

You can also significantly boost your profitability by nurturing customers that provide high profit on low sales.

If customers are providing low profit from high sales, you can maybe revise pricing to generate more revenue from them.

If customers are generating both low sales and low profits.

Consider whether it’s worth your while continuing to do business with them.

11. Find new ‘best’ customers

Make a judgement on expanding your customer base by finding new customers who have a similar profile to your existing profitable customers.

If you are sure you have covered your existing market as much as you can, consider moving into new markets.

How Profitable is Coconut Business:

12. Expand your market

Moving into new market areas can transform a business and, handled correctly, can significantly increase your profitability. However, expanding into new markets can be risky – and mistakes can prove very expensive.

13. Do your research

Before you start, carefully research the potential opportunity. Can you tailor or adapt existing products or services for new markets? This can provide new revenue at minimal cost and is ideal for boosting profit. For example, if you manufacture tools for the garden market, are there any potential applications for the tools in the construction industry?

Do you understand who your potential new customers are, why, when and how they will buy the product or service and how much they will pay for it?

You can also use social media to do research and gain alternative insights, opinions and feedback from your customers.

How Profitable is Coconut Business:

14. Developing new products and services

If youre developing a new product or service for a new market, it’s good to carefully consider its viability. Key questions include:

  • Do you have the skills and expertise in-house or will you have to buy them in?
  • Have you got the commitment and resources available to make the new project work?
  • Can you minimise the risk?
  • Can you be sure theres a demand for the new product or service at a price you can make a profit on?

15. Sack underperforming suppliers, customers and staff as appropriate.

This gets rid of the suppliers, customers and employees who make the working day more stressful.

This will create a better working environment for your team and remove any customers who are losing you money.

How Profitable is Coconut Business:


Improving your business’ profitability can help you to reduce costs.

Increase turnover and productivity, and help you to plan for change and growth.

How you increase your business profitability will depend on a number of factors.

Such as the business sector you work in, the size of your business, or its operating costs.

BusinessHAB helps organizations transform in a fast-changing world of work by sourcing, assessing.

Developing and managing the talent that enables them to win.

We develop innovative solutions for hundreds of thousands of organizations every year.

Providing them with skilled talent while finding meaningful.

Sustainable employment for millions of people across a wide range of industries and skills.

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