Coconut is a socially and economically important commodity in Indonesia, which has the largest coconut-growing areas in the world ahead of the Philippines and India.
The palm is a major source of income for around 6.4 million smallholders in the country and coconut derivatives like oil and sugar are used in various foods, beverages and beauty products. This includes Unilever’s Bango brand of sweet soy sauce, a staple used daily by millions of Indonesian households.
The global coconut derivatives market is expected to grow from US$11.6 billion in 2020 to US$23.32 billion in 2027 at a CAGR of 10.54%, according to figures from Fortune Business Insights. This is supported by growth in areas such as plant-based nutrition, which often incorporates coconut fat, as well as healthy beverages like coconut water and milk.
Coconut productivity, however, is under pressure. Data from Statista shows that between 2012 and 2021, coconut production fell by almost 12%. Forecasts shared by Unilever estimate that – without action to address the structural challenges facing the sector – overall tree productivity in Asia is on track to decline by more than 80% by 2027.
So what’s hitting coconut production?
According to the International Coconut Community, low productivity in Indonesia can be linked to the variety of coconuts grown, a high proportion of older trees in plantations, land conversion, climate change and outdated agronomic practices and the impact of pests and diseases. Farmer livelihoods are also a challenge in a sector marked by price volatility and high logistics costs, especially in remote rural areas.
Unilever has identified another issue it says is negatively impacting the welfare of coconut farmers, most of whom are smallholders. Since coconut palms typically reach a height of around 30 meters, collecting the sap from which coconut sugar is made is “labor intensive” and can be dangerous.
This situation means that “many plantations have been abandoned”, observed Unilever.
Small but Mighty: Introducing the Genjah Kuning Bali
In the search for solutions, Unilever has launched what it describes as an “industry-leading” initiative in partnership with the Indonesian National Coconut Institute, with whom it has worked since 2015.
The company has supported the Institute’s work to create a new coconut variety that it is hoped will help boost the productivity of the Indonesian coconut industry. “The Indonesian Coconut Institute promotes these coconut palms as a commercial variety. We worked with them to organize pilot plantation projects and develop our coconut suppliers, in collaboration with Indonesian farmers,” Clément Jaloux, Unilever Sourcing Manager, South East Asia Supplier Development, explained.
The result is the Genjah Kuning Bali coconut palm variety. Interestingly, Unilever and the Indonesian National Coconut Institute weren’t focusing on developing seeds that produce high-yielding plants – they were looking at a different metric. “We focused on the characteristic height of these trees,”Jealous told us.
By focusing on height, Unilever believes it has developed a plant that will mean it will be faster and safer for small farmers – especially women – to collect sap.
These “mini” coconut palms reach a height of ten meters and allow the sap to be collected without having to climb. “From a safety point of view, short-stemmed coconut trees reduce the risk of farmers falling, make their work easier and encourage young farmers to continue working on their parents’ plantations,” FoodNavigator has been informed.
Although individual Genjah Kuning Bali trees may yield less than other varieties due to their shorter height, overall growing them should have a positive impact on productivity. Farmers will be able to collect more sap per day, increasing their production and income, Unilever predicted. “Although each tree has a lower yield due to the nature of its size, this is compensated by a higher density per hectare”,Jealous added.
Another great advantage is that the smaller variety reaches maturity faster. This removes a barrier to replanting aging and unproductive trees, as farmers will be able to start harvesting Genjah Kuning Bali trees earlier. “Smaller coconut palms mature (begin to bear fruit) after four years, while their larger counterparts mature after seven years,”Jealous elaborated.
In 2017, Unilever established a 100-hectare pilot plantation, and since then the company has gradually expanded the project to three growing regions: Lampung in South Sumatra, and Sukabumi and Pangandaran in West Java.
By June 2022, Unilever had planted the equivalent of 3,300 hectares of Genjah Kuning Bali trees in collaboration with 3,600 smallholder farmers.
Planting is carried out on existing plantations, replacing either existing old coconut trees or other cash crops. The effort is expected to benefit around 5,000 Indonesian households by helping to boost the incomes and resilience of smallholders, Unilever predicted. “It’s about rejuvenating the coconut trees for all types of farmers. This innovation is extra income for a range of farmers, who grow them alongside their other larger trees. Some farmers replace old perennial crops (cocoa) while others intercrop coconut trees with cash crops (banana, groundnut, etc.),”says Jealous.
The initial batch of short-stemmed coconut palms have started producing sap and Unilever is now taking delivery of coconut sugar from these farms at its factory in Bango. Production from these plantations will increase year on year and will peak in 2026, Unilever has revealed. From then on, the company aims to get half of its coconut sugar supply from this new variety of tree.
Technology and training for sustainable coconut sourcing
Alongside its plantation initiative, Unilever is also focusing on providing training and technology to help Indonesia’s coconut sector thrive.
“Crop science like this is crucial to improving biodiversity and helping farmers adapt to climate change and build resilience. But innovations like these need to go hand in hand with training, services (such as access to finance and fertilizer) and community empowerment,”Jealous stressed.
Last month, the group rolled out a new mobile app to support the country’s coconut farmers, SmartFarm Plus.
Developed for Unilever field teams by agritech group Cropin, the platform is updated with plantation information – such as tree maturity and any productivity issues – when field teams make site visits. closed. The app then aggregates the data to provide location-specific advice that Unilever teams pass on to farmers. It also allows Unilever to track coir sugar production forecasts, thereby strengthening the resilience of its own supply chain.
Farmer training in areas such as fertilizer distribution and other agricultural practices is also provided to equip smallholder farmers with essential skills and knowledge. “We developed training for 1,000 small-scale farmers to teach them good agricultural practices, from how to take care of trees to climate resilience methods,”notes Jealous.