Business Leader recently sat down with Al Shariat, the founder of Coconut Merchant, an online retailer that uses ethically-sourced coconuts for all of its products.
Al started the business in 2014, and has since grown the business to achieve sales in excess of £4m. He achieved this growth by selling his products on Amazon. Within the first month of launching on Amazon, daily sales reached 100, and since 2015 the business has doubled in size each year.
2019 is set to be a record year for the business as they work with Amazon to reach new markets including the USA, Scandinavia and Ireland.
As well as forging commercial success, Coconut Merchant is committed to ethical sourcing, very much inspired by Al’s former career in the UN.
Al spoke to Business Leader about how his career inspired him to create the company, the rise of coconut products within the retail sector, and how ‘ethical’ business processes are key to a company’s success.
Before joining Coconut Merchant, you worked for the UN – what was your role and how did it lead to your current career?
That’s right, I was a Monitoring and Evaluation Consultant for the UN, which involved visits to various projects within the United Nations Development Programme (UNDP). I would prepare reports on their progress and in some cases provide recommendations for their improvement. I had always wanted to work for the UN, so I loved the work.
One specific project planted a seed in my head that later led to Coconut Merchant. I was reporting on a microfinance project where the UNDP was supporting villagers to develop small businesses that tied into broader UN goals around gender equality, alleviation of poverty and environmental protection. I recognised that the villagers needed to broaden their market, because they could only trade with neighbouring villages and the surrounding area. If the villagers organised into co-operatives and maximised their individual skills, the co-operative could buy and sell collectively while accessing a bigger marketplace. By bringing external capital and organisational support together with their local skills, I saw how we could help the area to jumpstart its own manufacturing revolution.
Cut to a year later, I was in London studying for my Masters degree and working as a project manager in Canary Wharf when I met Shan Vignes – a pivotal moment in my career! Shan is Sri Lankan and had already founded Coconut Merchant as a business, but he was desperate for somebody to help him run the company on a day-to-day business. I saw a chance to put my observations, ideas and ambitions into practice, whereby we could assist farmers and organise them into co-operatives (or by partnering with existing co-operatives). This approach meant we could pay farmers fairly, provide their communities with a regular income and share the fruits of our success.
Shan and I both share a vision to use business as a force for good, offering both quality products to customers and setting up an innovative supply chain that benefits everybody.
Can you give us an overview of Coconut Merchant?
At Coconut Merchant we specialise in providing high-quality coconut products. We have the largest range of coconut products in the EU, with listings in high street retailers, health stores and online retailers such as Amazon, plus a growing international distribution network.
Our products range from staples like coconut water and coconut oil, through to innovative products like coconut jam, coconut vinegar, coconut savoury sauce (an alternative to soy sauce) and coconut nectar (a vegan alternative to honey).
We’re very proud that the quality of our products has been recognised by numerous industry awards, and demand from customers continues to grow exponentially. Our mission is to share high-quality, ethically sourced products which are produced, packed and delivered with love. We even send personalised notes to all our customers – love letters to thank them for their continued support.
How would you describe the rise of the coconut product market over the last few years?
Coconut products have been used for centuries throughout Asia, the Caribbean and Africa, so I would describe it as a rediscovery of coconut products. Particularly in the West, we’ve seen customers become more aware of international products, they’re more health conscious, they’re also more taste conscious, and they care about the providence of the ingredients they purchase.
For Western markets, I think the growing appeal of coconut products is as much about flavour and experimentation as it is about healthy, environmentally-conscious alternatives. This, coupled with the growth in gluten-free and vegan diets, has helped to push interest in coconut products. All of those factors go hand-in-hand.
How have you set Coconut Merchant apart from the competition?
We have three key areas that make us unique. Firstly, our products are ethically sourced – we work hard to buy directly from farmers, or as close to farmers as possible. We also provide organisational support and we will invest in the tools they need to support the growth of the supply chain. This has been so successful that the UNDP is now assessing our business to see how our model can be replicated further afield.
Secondly, we have the world’s largest range of coconut products. While we have competitors offering a fraction of our range, nobody has the breadth of our range or our expertise. If customers are looking for coconut products, we’re the first port of call.
Finally, our products and the wider company all have a focus on personal care and love. This comes into every aspect of our business. With any order, customers receive a personalised and signed note from us, and this is something we’ve practiced since day one. Our company hashtag is #PackedWithLove!
Thanks to all of these elements, our customers are responding really positively, and our sales have skyrocketed. In less than four years our revenue has already topped £4m.
How are you an ‘ethical’ business?
Working in a fair and collaborative way with our sourcing partners is crucial to everything we do.
Here’s a simple example from our supply chain: when producing coconut oil, our top seller, we buy the coconuts directly from farmers co-operatives in Sri Lanka. We pay above market rates, so they are paid fairly, which in turn gives the famers a secure income. It’s then processed at a mill which we work in partnership with to increase their production capacity as our demand grows. We also helped them to build an entirely new facility, to get international certification, and in some cases we even help to get new technology. It’s also packed in a local facility, which again helps to create and sustain jobs within the community.
Does being an ‘ethical’ business mean more in today’s world compared to a few years ago?
In the past, simply saying a token amount of profit is donated to a given charity meant you were ‘ethical’. However, today, a truly ethical business needs to do so much more. You need to be conscious of the full nature of the business, your environmental policy, the way your products are sourced and your general business practices.
For example, our customers even care about how our coconuts are harvested and whether monkeys are used. We’re proud to say that monkeys are not used in harvesting our coconuts!
How has Amazon helped your business?
Amazon gave us a chance to access national and international markets, connecting us with a huge consumer base. Starting out, we needed build a brand following so that bricks and mortar Category Buyers would list our products in their stores – and Amazon helped us to do that rapidly.
Amazon gave us a chance to start demonstrating the quality of our products through customer reviews, which are more important than ever for growing a start-up. They also allowed us to challenge larger brands directly, and in most cases, beating them by really showing our worth as a brand. It also meant that we could supply customers in remote parts of the UK, delivering them products the next day through Prime Delivery.
Ultimately, it gave us a chance to access the market, win business, prove our quality and grow. To this day, Amazon remains a key partner for us in our sales and growth plans. We’re now one of the top selling products in the Grocery Category in the UK, France, Spain and Italy. That is a category shared with chocolate, coffee, and alcohol – and we’re still kicking butt.
What does the future hold for the company?
We’re really excited about the next stages of our growth. First up, we’re looking forward to expanding internationally. We have trialled demand through Amazon in various European markets, using it to get feedback on our products and pivoting towards our customer needs. This is made easy with the European Fulfilment Network, and it can all be managed from the UK. With the information we’ve collated from Amazon sales, we’re also partnering with local distributors to sell into more bricks and mortar stores.
The US will be our next major market, where coconut products are often in the top grocery selling products and the market is ten times bigger than the UK. We’re also partnering with a major distributor to fast track our growth further! We’re also developing a host of new innovative products that are really going to shake up the categories they are in – watch this space!