This is an English adaptation of a FoodBud historical article originally published on August 16, 2022.
BBB Research Institute, in an article by Li Xiaowai published on August 16, 2022, argued that coconut had moved from a supporting ingredient in coffee, juice, and milk tea toward a possible standalone category in China’s new-style beverage market.
Around 2020, plant-based drinks such as oat milk and soy milk were gaining attention. Oatly had become a star company in oat milk, and specialty dairy ingredients were also finding their place in coffee. Coconut, by contrast, was still moving between juice, coffee, and milk tea without a clear role.
That began to change when Heytea launched its “fresh-blended coconut” series in August 2020, bringing coconut into the mass market through more scaled and varied menu formats.
The bigger turning point was Luckin Coffee’s “raw coconut latte.” After Luckin’s 2020 accounting scandal, the company needed a breakout product to rebuild consumer confidence. Coconut, still relatively niche at the time and not yet affected by inflated supply-chain pricing, offered a cost-effective ingredient option.
Despite the name, the drink did not use clear coconut water. It used a thicker coconut milk made from coconut meat juice, coconut water, water, and white sugar, with emulsifiers or thickeners such as sodium caseinate to create a richer, sweeter texture.
Luckin’s bet worked. In April 2022, the company promoted that single-item sales of the raw coconut latte had exceeded 100 million cups. Its marketing joke that executives had gone to Hainan to pick coconuts because the product was about to sell out also spread widely online.
Even so, coconut was still largely a supporting ingredient. The question was whether coconut, and especially coconut water, could become the main character.
The article’s answer was yes.
For a fruit to become a permanent category on modern tea-drink menus, two conditions matter most: stable supply and a flavor profile with mass appeal.
Stable supply includes cross-season availability, storage tolerance, and transportability. Perfume lemon became the basis for standalone lemon-tea shops partly because lemons can fruit multiple times a year. Watermelon, apples, pears, and oranges have stayed strong for years because they travel and store more easily than delicate fruits such as lychee or strawberry.
Flavor adaptability also matters. Niche fruits such as phyllanthus emblica and wampee had been popularized by leading tea chains, but their strong flavors made them harder to pair broadly. They remained more concentrated in Guangdong and Guangxi rather than becoming national staples.
Coconut was different. Before being rediscovered by beverage chains, consumers already knew coconut through packaged coconut milk and coconut water. Coconut Palm brand coconut juice had been distributed across China since the 1990s, giving the flavor a broad base of consumer acceptance.
The article also noted a pattern in China’s consumer market: trends that start in higher-tier cities often spread into lower-tier cities. Once raw coconut drinks became established in coffee and milk-tea occasions in first- and second-tier cities, third- and fourth-tier cities were expected to follow.
At the same time, packaged coconut water was becoming easier to find across offline retail channels. Its price was higher than soft drinks and sparkling water, but not dramatically higher than NFC-style fresh juices. The article described coconut water as entering a favorable window: supply was relatively mature, pricing was relatively acceptable, and consumers were paying more attention to health.
A sign of this shift was the rise of stores built around coconut as the core ingredient. The article compared this to the rise of lemon-tea specialty shops in 2020 and 2021: a single fruit moved out of mixed fruit-tea menus and became the basis for multiple product lines.
Warm-climate, tea-loving cities appeared especially receptive. Perfume lemon tea first developed around Guangzhou and Changsha, and coconut specialty stores followed a similar geographic pattern.
In Guangdong, coconut was not new. Coconut jelly dessert shops had long been part of afternoon-tea routines. But from the second half of 2021 through the first half of 2022, the momentum changed: coconut-water and coconut-meat specialty stores expanded quickly.
In Guangzhou, nearly 10 brands were selling coconut desserts or fresh coconut water, including Guojia Haoye Coconut Innovation Lab, Yeyeye, Mingye, Zhengyeye, Ning 85C, and Cocoye. Guojia Haoye and Mingye focused on coconut-themed desserts. Mingye’s gift box of six coconut-milk jelly flavors drew attention on social media, and one coconut-water product marketed as containing four coconuts was also well received.
Zhengyeye, with stores in Changsha and Guangzhou, created a “whole coconut” format. Its coconut egg used a whole shelled coconut meat product made with Thai Dole young coconuts. Its young coconut water came from Hainan coconuts, while its coconut milk came from Indonesia. The highest-priced single item was around RMB 28, while most drinks were priced between RMB 18 and RMB 23, making them competitive with milk tea and coffee.
Changsha, already a major base for new consumer brands, also saw a wave of coconut-drink specialists. The city had produced beverage and bakery brands such as Ningji, Guoyaya, Momo Dim Sum Bureau, and Hutou Standard Chartered Bakery, while Wenheyou and Chayan Yuese had also built strong local visibility there.
One Changsha brand, Daike Super Coconut Water, had become a major local player. According to Dianping data cited in the article, it opened eight stores in the first six months of 2022, covering key locations such as Wuyi Square and outlets.
Before Daike, another coconut-drink specialist, Yebengbeng, opened a small store near Changsha’s Nanmenkou in September 2021. A user quoted in the article said the brand used fresh, solid ingredients and fair pricing, and that surviving in Changsha’s highly competitive milk-tea market was not easy.
Competition was intense. Although Yebengbeng started earlier than Daike, it had only secured four locations at the time, including Wharf, InCity, and Beichen Delta. Core commercial sites were still dominated by leading brands such as Chayan Yuese and Nayuki. More local players then entered the coconut-drink category, including Duodianye and Yelaiye, while chestnut retailer Jinlimen also launched coconut-water drinks.
The trend extended north to Nanjing. X-YES! Xunye opened coconut-drink stores inside and outside the city, while brands such as Coconut Head and Koukouye were also visible. Even hotpot restaurants launched coconut water to draw traffic.
Former lemon-tea stores also joined the trend. Ning 8C opened new stores, with fresh coconut lemon becoming a key item. On Weibo and Xiaohongshu, searches surfaced many posts recommending its signature raw coconut lemon drink.
The article emphasized that the key operational issue was the base item: coconut water.
Historically, stores used two approaches. They either poured packaged coconut water by volume, or opened fresh coconuts on site.
Both had drawbacks. Packaged coconut water was less fresh and could vary in flavor. Even when a store bought the same brand, sweetness could change by origin and batch, making final drinks less stable. The article noted that this was one reason leading coconut-water brand Vita Coco added ingredients to standardize flavor across batches.
Freshly opened coconuts gave a stronger freshness cue, but manual extraction was inefficient. During demand spikes, staff could struggle to keep up with juice extraction, slowing production. Opening coconuts manually also created safety concerns.
Cocoye, a coconut-water brand from Shenzhen, tried to combine a made-to-order experience with pre-processed supply. Its stores did not show staff opening coconuts. Instead, the supply chain used a fresh-extraction process before the product reached the store, and customers filled bottles from a dispenser. This gave a sense of freshness and added an interactive experience.
The core issue remained taste. Preserving coconut water flavor when exposed to heat, acid, and oxygen was described as a major supply-chain challenge.
As of the article’s publication, the industry had not yet seen a breakthrough in preserving fresh coconut water. That was why mass-produced, stable packaged coconut water still occupied the market across restaurants, beverage shops, and daily consumer occasions.
The author argued that the rise of offline coconut specialty stores could push the packaged coconut-water industry forward. Production-side challenges included improving protein content in flavored products and removing sour or astringent notes.
The final question was whether coconut specialty stores would be built around experience and interaction, or around volume. Even with Cocoye showing encouraging data at the time, the article concluded that coconut water had not yet fully proven it could be the lead category. After years of health and sugar-free claims across beverages, coconut was still one fortunate ingredient on a long list of products trying to connect themselves with a “green” positioning.