Here are ten compelling reasons to own the mighty, versatile, and massively popular coconut. And at the end, we show you the perfect way to own this amazing cashflow-producing asset.
We can drink its water, eat its meat, and bang two empty halves of its shell together to make horse hoof sounds.
Hailed as a “superfood,” the mighty coconut is associated with hundreds of potential applications and benefits (though of its many uses, clip-clop horsey sound effects simulation is definitely the coolest). Coconuts generate a diverse variety of products, including milk, cream, toothpaste, beauty solutions, charcoal, and—of course—the massively popular, pro athlete and celebrity-endorsed, four-dollars-a-bottle coconut water. Soon, there could be a new use for coconuts: biofuel to run diesel engines.
As longtime fans of the versatile coconut palm, we wanted to share ten reasons why you should consider owning organic coconut farmland:
Driven by a growing preference for products that are natural, healthy, and hip, a strong market has emerged for high-end items like organic coconut water, coconut milk, coconut flour, and coconut beauty products—particularly ones that are organic and sustainable. In the past decade, the global demand for coconuts has risen by a staggering 500 percent. Much of this is due to the increased popularity of packaged coconut water in the U.S., Europe, and Australia. By 2025, the global coconut water industry is expected to grow at a compound annual growth rate (CAGR) of 26 percent to reach $15 billion by 2025.
However, a coconut crisis looms on the horizon. As demand surges and present-day palms decline in productivity as they age, the world is facing a serious coconut shortage. Demand that outstrips the pace of coconut production has translated to soaring prices. Some experts estimate that nearly one billion coconut trees will need to be planted to keep space with market demands.
Like other agricultural investments, coconuts generate a steady stream of cash flow. With the excellent growing conditions found in countries like Colombia, coconut palms may yield their first fruit in as little as four years and reach peak production within six years. Once a coconut tree meets peak production, it can produce as many as 150 coconuts per year for 50-60 years straight. Mature coconut trees can generate an annual yield in the double digits—around 10-15 percent of your initial investment—for decades.
The list of products made from coconuts is a long one. There’s coconut water, coconut “meat,” and coconut oil. Coconut oil is used in hair and skincare products, while husks may be used in everything from mattress stuffing to biofuel. That means an investment in coconuts is naturally diversified because if the demand for one type of coconut product drops, there are hundreds of other types of products to generate returns. For example, let’s say Rihanna swears off coconut water for good and becomes a die-hard Tab drinker. Even if consumers follow her lead and coconut sales plummet, the industry can continue to draw in revenue from sales from coconut lip balm, Almond Joys, coconut shell bikinis, etc.
Coconut farmland, like other agricultural assets, negatively correlates with stocks and bonds. That means that even as these traditional assets drop in value, coconut farmland prices tend to increase. Furthermore, coconuts are a hard asset class that cannot be manipulated by Wall Street in the way that stocks can be. The only things that can manipulate coconut farmland yields are demand and weather (one aspect unlikely, the other solvable in climates like Colombia).
In many tropical countries where coconuts grow—including Colombia—land prices are exceptionally low by U.S. standards. As an extra perk, Colombia is a fast-growing market, meaning a strategic move now could translate into a big profits in the long run. In addition, while property prices in Colombia have skyrocketed over the last decade, the U.S. dollar has strengthened against the Colombian Peso (COP)—meaning prices for U.S. buyers remain constant.
In Real Estate circles, we have the concept of 'all Real Estate evolves to it's maximum best-use over time.' This means that bare land will be planted with farm produce over time. Or someone will build a single family home on bare land. And then someone will knock it down because they can build a bigger and better home. And then many homes get demolished so someone can replace 3-4 homes with 10-12 townhouses. And then townhouses get demolished to make way for a multifamily apartment building or a hotel in the right locations. You get the point. Real Estate always evolves to its maximum best use....
Farmland, in the right location can produce income for decades and eventually, as cities and towns sprawl outwards due to population growth, be developed into housing estates or malls or industrial storage space etc. Invest in Farmland near growing towns and cities and you'd be surprised how much money you can make on land prices by flipping it later on.
The moisture-loving coconut palms flourish in tropical climates that offer 47 to 94 inches of annual rainfall. Arid and cold air prematurely dry out the coconut palm's fronds, and moisture is needed during summer for the production of fruit. As luck would have it, countries with low land prices like Colombia also boast ideal climates for growing coconuts. Colombia has long counted water as an abundant resource, enjoying around three times the global average of rainfall per country.
In a tropical coconut-growing country like Colombia, there are minimal restrictions on foreign land and property ownership and more importantly, strong ownership protections for foreign investors. You can invest in as little or as much land as you like while enjoying the same property rights as Colombian locals.
One of the keys to investing in Farmland is to find a turnkey product, meaning you don’t have to become a farmer to get into this asset class.
Lucky for you, we've already done the hard work.
It is OUR great pleasure to announce the sale of 1-hectare (2.47 acre) Farm LOTs at our Organic Coconut Plantation in Colombia. This project started 4 years ago with the planting of 230 hectares of Malayan Dwarf Coconut palm trees, a unique, disease-resistant hybrid variety that thrives in Colombia's coastal lowlands.
Our first major harvest is next year and we are selling 30 hectares of the El Principio sub-division to prepare for harvest and to construct a packing facility. With this series of LOTs, you can own Organic Coconuts, one of the world's most high-value permanent crops. With rising demand and a wide variety of uses, coconut is a highly attractive crop, and Colombia is one of the world's rising producers.
Each $65,000 LOT represents a 1-hectare portion of the farm, with 3.5-year-old coconut trees within a year of full maturity. LOTs feature strong income potential, with year-2 projected returns at 10% and 15% returns every year in perpetuity beginning in year 5.
For those of you looking to diversify outside of the stock market into hard assets with a less volatile performance path, we’d love to chat! We have the perfect turnkey system for no-hassle farmland ownership; these Land Ownership Titles (LOTs) are available for purchase today. But be quick as there are only 7 left as we are publishing this...
If you want to learn more about coconut farmland investing and other agricultural opportunities, let’s talk: schedule a chat with Karen and I today.