As the opener for The Feminine: Act II Coconuts sets the tone for the rest of the EP: chill and more reflective tan Act I.
In an interview with UNTITLED Magazine, Anna said:

the song is about not caring what other people say about you and about the destruction of the old ways of thinking that have not served us that have actually hurt us all for thousands of years. I’m not just talking about patriarchy. I’m talking about racism and transphobia and homophobia and xenophobia – anything that’s keeping us separate and hateful towards each other. I want those things to be gone.

About the songwriting, Anna shared the process to pressplayok:

Writing “Coconuts” reminded me of when we wrote a Sonnymoon song called “Bungee,” in that it came easy for both of us and we created separately. Dane made the beat really fast and sent it my way via the internet. I wrote the melody and lyrics right away, it all came out perfectly. It’s one of those easy, simple gifts from the other side of the veil. I played it live at my next show, and then every night during my last two tours last year.