Cocoa & Chocolate Market Still Has Room to Grow with Emerging Players Cargill, Barry Callebaut, Nestle S.A

MARKET OVERVIEW- GLOBAL COCOA AND CHOCOLATE MARKET

Cocoa is a genuine form of chocolate. Chocolate is made with cocoa beans and has undergone the same manufacturing process as cocoa. However, cocoa butter is not removed from the chocolate. Cocoa butter contributes to the softer and richer texture of the chocolate. The increase in sales of chocolate candy to be consumed as comfort food is responsible for creating a regular grocery store in families. Chocolate is a traditional gift on special occasions and at festivals all over the world. The seasonal and festive sales of chocolate products have a strong impact on the market, because a large part of the chocolate products is consumed in this segment. The cocoa and chocolate market, which increases according to the growing demand for cocoa health benefits in chocolate products is one of the most important engines for the chocolate market. In addition, chocolates are consumed as superior and comforting foods, which is an increasing trend among consumers and is further anticipated to provide ample new growth opportunities for the market over the upcoming years.

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MARKET DRIVERS

Chocolate has a long history as a healthy food. In 18th century England, a chocolate drink was used to prevent and treat abdominal pain. Today, ORAC (Oxygen Radical Absorbance Capacity) is used to compare the antioxidant capacity of different foods. Along with apples and blueberries, chocolate is considered one of the foods with the best ORAC rating. Eating chocolate also prevents the release of cortisol, the stress hormone. Instead of trusting drugs, consumers prefer to include ingredients that improve their health in their normal diet. Dark chocolate is becoming increasingly popular among consumers due to the high cocoa content and flavonoids, in particular a subtype known as Flavanooli which is connected to a lower risk of heart conditions. In addition, those who consume dark chocolate or a high cocoa content have a lower possibility of developing insulin resistance and hypertension. The health benefits relating to cocoa and its products are therefore the greatest driving factors for the market.

Chocolate is also rich in calories, and therefore its consumption at a moderate level helps maintain the weight. Consumption of chocolates lowers cholesterol and reduces the risk of cardiovascular problems. In addition, due to its aroma and its taste, chocolate is perceived as a luxury or superior product of antiquity. All these advantages for the health and perception of consumers about chocolate is expected to increase the demand for cocoa and thus encourage growth of the market.

MARKET OPPORTUNITIES

There is a growing preference for organic products in the food industry. Indeed, people are willing to pay higher prices for certified organic food products. Chocolate and cocoa producers are paying attention. They respond by including organic cocoa in their food products. Manufacturers of chocolate and cocoa products find that adding organic cocoa has another benefit as well. It keeps people healthier and allows them (producers) to charge higher prices to the final consumer.

Most of these manufacturers are engaged in intensive research and development. Their ultimate goal is to increase the industry's overall presence by offering innovative and healthy products. They conduct extensive research to understand what products people around the world need and want to buy. They therefore focus their efforts on the production and sale of these products. This is expected to create new opportunities for the market in the upcoming years.

MARKET RESTRAINTS

The main obstacle affecting the market is the high price of raw materials, i.e. cocoa and sugar. Chocolate prices are highly dependent on raw materials. Cocoa and sugar are the most important raw materials in chocolate production and account for more than 80% of raw material costs for chocolate production. Therefore, rising raw material costs will affect the chocolate market. According to the International Cocoa Organization, the world's largest supplier of cocoa is Africa, which accounts for 72% of global cocoa production. Ivory Coast and Ghana are the main cocoa producing countries, but these countries also face some problems such as discrepancies in fair trade, environmental problems, periods of government unrest and reduction of the workforce etc. These factors are also expected to negatively impact the growth of the market.

MARKET GROWTH CHALLENGES

A major challenge to the industry is the evolution of chocolate consumer preferences. Chocolates have been consumed as a confectionery, but now there is a growing demand for healthy chocolate option with a dark chocolate trend, a rich source of polyphenols. According to a survey recently carried out by Barry Callut, 36% of Europeans want chocolates with health benefits, while 38% want chocolates with reduced sugar content. Consumers are even ready to pay up to 10% more for chocolate with health benefits. These consumer trends have forced companies such as Hero Nutritional and Barry Callebaut to start making chocolates with health benefits. Companies need to ensure that their new product launches cater to consumer tastes and preferences.

CUMULATIVE GROWTH ANALYSIS

The report provides an in-depth analysis of the global Cocoa and Chocolate market, market size, and compound annual growth rate (CAGR) for the forecast period of 2023-2029, considering 2022 as the base year. With increasing demand for various cocoa and chocolate products in various applications has led the increasing demand for market and is expected to witness the growth at a specific CAGR from 2023-2029.

COCOA AND CHOCOLATE MARKET SEGMENTAL OVERVIEW

The global Cocoa and Chocolate market comprises of different market segment like type, product, nature, application, distribution channel and geography.

COCOA AND CHOCOLATE MARKET BY TYPE

By type, the Cocoa and Chocolate market includes the key segments of

Cocoa Butter
Cocoa Powder
Cocoa Liquor

The cocoa liquor segment is expected to dominate the market over the forecast period. Cocoa liquor, also called chocolate liquor, is the essential component needed to produce raw chocolate. Cocoa butter and cocoa powder are also produced from the cocoa mass. Therefore, the growing demand for chocolates and the growing use of cocoa liquor in confectionery, food and beverage, bakery, cosmetic and pharmaceutical sectors should increase the demand for cocoa liquor.

On the other side, high cocoa powder is expected to grow at a high rate during the estimated time period. Cocoa powder is a key ingredient in things like chocolate cake, chocolate frosting, and other chocolate-based foods and drinks.

COCOA AND CHOCOLATE MARKET BY PRODUCT

By product, the Cocoa and Chocolate market is segmented into

Traditional
Artificial

Traditional segment is expected to dominate the market over the forecast period. It includes dark chocolate, milk chocolate and white chocolate. This can be attributed to the greater penetration, popularity and ease of availability of cocoa compared to carob, which is the raw material for artificial chocolate. Milk chocolate is the dominant variant among the various traditional chocolates as it enjoys the first-mover advantage on the market.

Artificial chocolate is expected to witness the fastest CAGR over the forecast period. The rapid growth is attributed to the caffeine-free property of carob sweets, making them suitable for caffeine intolerant consumers. In addition, the calcium content in carob is almost three times as high as in cocoa. This makes it particularly popular with women and people with calcium deficiencies.

COCOA AND CHOCOLATE MARKET BY NATURE

By nature, the Cocoa and Chocolate market is segmented into

Organic
Conventional

The organic segment is expected to grow rapidly due to the growing health-conscious population and increasing disposable income. The organic cocoa is free from chemical fertilizers and pesticides. It is also healthy for consumption so consumers are willing to pay a higher price for organic cocoa. Therefore, the organic segment is expected to witness the highest growth in the global Cocoa and Chocolate market.

On the other side, the conventional segment is expected to experience stable growth over the projected time period.

COCOA AND CHOCOLATE MARKET BY APPLICATIONS

The Cocoa and Chocolate market has major applications in

Confectionery
Food and beverages
Bakery
Pharma
Animal Feed
Others

Bakery followed by food and beverage segments are expected to gain increasing demand for cocoa and chocolate products over the estimated time period. Chocolate is rapidly gaining a foothold in the baking industry, with many chocolates being considered a flavor for cookies, cakes, and pastries. In the global flavor industry, several new types of products are being developed, such as energy drinks, yoghurt and milk-based drinks. Additionally, chocolate liquor is generally used for applications in sweet and sour chocolate making and baking applications.

Cocoa is used in the pharmaceutical industry to add chocolate or taste to medicines to make them more tasty or to improve consumer respect for dosage forms consumers. In addition, natural cocoa butter is often used in cosmetics as humidity, a lubricant to maintain humidity and improve the aroma of the products. These cocoa and chocolate applications is expected to stimulate the growth of the market in the coming years.

COCOA AND CHOCOLATE MARKET BY DISTRIBUTION CHANNEL

The Cocoa and Chocolate market has distribution channels like

Supermarket & Hypermarkets
Convenience Stores
Online

The supermarket and hypermarket segment is expected to dominate the market. The high availability of products in supermarkets and hypermarkets is an important factor contributing to the growth of the segment. In addition, manufacturers are opening stores in shopping malls due to increasing consumer demand for chocolate, increasing the sale of chocolate through supermarkets and hypermarkets over the next few years.

The online segment is expected to witness the fastest CAGR over the forecast period. The online sales channel has experienced significant growth in recent years due to the growing Internet penetration in several countries. In addition, online retailers including Amazon and Walmart are adding this product category as their main focus area. The growing reliance of Generation X, Millennials and Generation Z parents on the Internet and e-commerce is a key factor that is expected to drive chocolate sales through the online channel in the coming years. A variety of features, including various value-added services such as discounted prices, cash on delivery and refunds, offered by e-retailers are expected to fuel the growth of the online channel in the coming years.

COCOA AND CHOCOLATE MARKET BY GEOGRAPHY

The global Cocoa and Chocolate market is studied for the following regions

North America
Europe
Asia-Pacific
Rest of the world (RoW)

North America is expected to dominate the market over the forecast period. The rising demand for chocolate in North America is simultaneously driving the growth of cocoa in the region as it is the main raw material used in the production of chocolate. In addition, the increasing demand for chocolate among consumers leads to a demand for cocoa butter, as it gives the chocolate its melt-in-the-mouth texture.

Europe is anticipated to witness increasing demand for Cocoa and Chocolate owing to the presence of well-established market players. Besides, Europe is also a key producer of cocoa. This is expected to drive the growth of the market in the region.

COVID-19 IMPACT ANALYSIS ON GLOBAL COCOA AND CHOCOLATE MARKET

Axiom MRC provides a 360 degree analysis of micro and macro-economic factors on the global Cocoa and Chocolate market. In addition, a complete analysis of changes in global Cocoa and Chocolate market expenditure, economic and international policies on the supply and demand side is provided in this exclusive report. The report also studies the impact of the pandemic on global economies, international trade, business investments, GDP and the marketing strategies of key players present in the market.

The Cocoa and Chocolate market has been impacted by low sales volumes due to the COVID-19 pandemic, as well as supply issues related to quality and certification. Regarding exports, the Fine Cacao and Chocolate Institute (FCCI) conducted a survey on the impact of the COVID-19 pandemic and the results are worrying. According to reports from the Dominican Republic, the strict lockdown prevented growers and farm workers from visiting plantations for several weeks until authorities granted waivers. Due to the disruption of the raw material supply chain and the resulting lockdown, more and more specialty stores are closed for longer periods of time and the volume consumption of high-end chocolate is declining. Further, the restrictions on restaurants negatively affected the demand for the cocoa products. With the end of Government imposed lockdowns, the market is expected to recover and experience reasonable growth over the upcoming years.

COMPETITIVE LANDSCAPE ANALYSIS

The competitive landscape analysis of Cocoa and Chocolate market is majorly focused on expanding the global growth of the cocoa and chocolate industries through new product innovation, business expansion, increasing presence of a range of manufacturers operating in the cocoa and chocolate sector has led to growing demand for the market. Besides, the market offers a range of products in different applications to fulfil the required demand of consumer which is further contributing to healthy growth in the market.

The key players studied in market are

Cargill Incorporated
Nestle S.A.
Mondelez International
Barry Callebaut
Lindt & Sprüngli AG
Mars, Inc.
Mondelez International
The Hershey Company
Ferrero Group
Mars, Incorporated
The Australian Carob Co.
Meiji Holdings Co., Ltd.
Arcor
Barry Callebaut
Cocoa Processing Company
Archer Daniel Midland Company

RECENT DEVELOPMENT:

May 2023: Blommer chocolate partnered with DouxMatok, a food tech company to launch chocolate and confectionery products.

March 2022: Cargill had partnered with Nestlé to extend the Nestlé Cocoa Plan (NCP) to benefit its network of cocoa farmers in Sulawesi, Indonesia. Activities include three key NCP pillars: better farming, better lives, and better cocoa.

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