Real and Compound Chocolate Market Size, Share & Industry Analysis, By Product Category (Real Chocolate and Compound Chocolate), By Type (Milk Chocolate, Dark Chocolate, and White Chocolate), By Form (Chips, Slabs, Coatings, and Others), By Application (Confectionery, Bakery, Dairy and Frozen Desserts, Beverages, and Others), and Regional Forecast, 2024 - 2032

The global real and compound chocolate market size was valued at USD 33.84 billion in 2023. The market is projected to grow from USD 35.98 billion in 2024 to USD 57.60 billion by 2032, exhibiting a CAGR of 6.06% during the forecast period. Europe dominated the real and compound chocolate market with a market share of 45.18% in 2023.

Real and compound chocolates are made of cocoa mass and cocoa butter, and compound chocolate refers to those products where cocoa butter and cocoa powder are replaced with vegetable oil. While manufacturing the real and compound chocolate, nutritious seeds are roasted, which brings out the flavors. They have high heat resistance, bloom resistance, and several other technical properties, which make them appropriate for consumption in warmer and colder countries alike and support wide application in different food products with ease.

The market’s growth is associated with the increasing number of shoppers leaning towards indulgent confectionery products. The demand for creative products and ingredients and their use in premium product manufacturing globally has increased in recent years. This tremendous growth is attributed to the increasing disposable income of the population, particularly in developing nations, which supports their ability to purchase indulgent chocolate confectioneries. This led to increased sales of real and compound chocolate globally.

The COVID-19 pandemic profoundly affected the usage of this product in the food & beverage processing industry. The application of such products in the food service sector declined during the pandemic as countries placed lockdown to reduce disease spread. As per the Cocoa Association of Asia (CAA), cocoa grindings in the Asian market fell by almost 10% in the first half of 2020 compared to 2019. Moreover, the prices of cocoa fell in the early days of the pandemic due to supply chain bottlenecks and an increase in transportation costs. The collection of cocoa from smallholder farmers and the supply of these products to the exporters and cocoa processors declined during the period. This raw material supply shortage affected the production of chocolates, leading to lower production. For instance, Barry Callebaut AG, a foremost manufacturer of premium chocolate, reported a slowdown in chocolate production for the first six months of FY 2020 due to the pandemic.

The rapid establishment and speedy expansion of online retail, e-commerce, and other distribution channels amidst the COVID-19 pandemic have unlocked new opportunities for manufacturers in the retail sector. They are anticipated to boost the market in forthcoming years.

Real and Compound Chocolate Market Trends

Evolving Plant-based and Low-Sugar Chocolate Consumption to Promote Growth

The chocolate confectionery category is traditionally driven by indulgence, and the sector has experienced a surge in demand for chocolates with better-for-you options over the past few years. The rise in flexitarianism is another factor contributing to the fueling demand for plant-based chocolates. Consumer expectations are changing, and they are seeking products beyond dairy allergies and lactose intolerance. At the same time, millennials look for tasty yet "ethical" plant chocolates that are harmless to the planet and animals.

Evolving consumers' concern for fitness and health strongly impacts the chocolate confectionery industry. This factor will create a broader spectrum of shifts in the industry by evoking companies and artisanal confectionery manufacturers to come up with vegan, low-sugar products. According to the Barry Callebaut global proprietary research report 2023, nearly 66% of consumers are showing interest in “less sugar” or “no-sugar” chocolate confectioneries globally.   Moreover, vegan chocolate variants manufactured by traditional iconic brands, boutiques, and independent producers appear on shelves, creating a positive product image among consumers. Retailers are highly aware of the potential of this label, which has nudged them to develop innovative products. For instance, in December 2023, Lindt, a global chocolate confectionery manufacturer, recently signed a strategic partnership agreement with ChoViva, a vegan chocolate brand, to launch a limited edition vegan chocolate named “Soft & Creamy Hazelnut”.

Real and Compound Chocolate Market Growth Factors

Increased Demand for Premium and Innovative Confectioneries to Boost Compound and Real Chocolate Sales

Although premium chocolate market has matured, the demand steady globally. In the U.S., artisan and gourmet products are popular, and consumers are focusing on the cocoa content and its use as additional ingredients to improve the flavor of the products. Although concern regarding health benefits of consuming chocolate is on rise among consumers, demand for innovative and flavorful chocolate based confectioneries remains strong. Major factors which influence the chocolate confectionery purchasing decisions include the taste and texture of the products. Manufacturers continue to innovate and launch new variations of sweet and savory flavors in the market.

Technical Advantage and Cost-Effectiveness of Compound Chocolate to Drive Global Market

Compound chocolates are made of hard vegetable fats namely coconut oil and palm kernel oil and is a low-cost alternative to original chocolate which are made of cocoa butter. Moreover, cocoa butter has to be tempered to retain its coating and gloss effect. As vegetable oil used in compound type chocolate tempering is not required which makes it cost effective and easier to work with. Use of innovative technologies such as Internet of Things (IoT) and AI also support the growth of manufacturing and the use of such novel technology will help to reduce the production overheads.

RESTRAINING FACTORS

Fluctuations in Raw Material Price to Restraint Market Growth

The compound and real chocolate market relies on the supply, quality, and cost of raw materials worldwide. The fluctuations in the price and supply of raw materials, such as cocoa, due to crop disease, climate, and labor unavailability can negatively impact the market. According to the United Nations Conference on Trade and Development data, in April 2024, the price of cocoa beans, a key raw material in chocolates, reached its highest record of USD 12,000 per ton. Several factors, such as El Niño, climate change, bean disease, and low income of cocoa farmers, are the primary reasons behind the price rise. Failure to recover higher or shortfalls in the availability or quality of raw materials, such as cocoa butter, cocoa powder, sugar, and others, could adversely impact the market. The significant change in regulatory controls, legal systems, and customs in the regions also affects product supply and hampers the real and compound chocolate market growth.

Real and Compound Chocolate Market Segmentation Analysis

By Product Category Analysis

Real Chocolate to Emerge as Dominant Category Due to its High-Quality and Taste

Based on product category, the market for real and compound chocolate is segmented into real chocolate and compound chocolate, with real chocolate remaining the leading type due to the growth prospects of specialty chocolate products and high-quality products. The presence of cocoa butter gives real chocolate a creamy, mellow flavor and delicate taste. Cocoa extract is becoming the ingredient of choice for various applications, including ice cream, candy, non-alcoholic beverages, delicious baked goods, and nutritious beverages.

Palm oil, shea butter, salted nut oil, and others are the primary substitutes for cocoa butter used in the production of compound-type chocolate. The reasonable prices of these substitutes have prompted compound chocolate manufacturers to expand their production capacity. The use of cocoa butter alternatives to expand chocolate production is expected to support the growth of the compound chocolate market.

By Type Analysis

Milk Chocolate Holds Major Share Due to its Wide Consumption and Utilization in Confectionery

On the basis of type, the market for real and compound chocolate is segmented into milk chocolate, dark chocolate, and white chocolate. Milk chocolate segment is dominating the global market and has wider consumption and incorporation in various chocolate-based confectionery items due to its versatile taste and texture. Milk chocolate is made with milk solids and usually contains only cocoa butter, which has a creamy texture and mouthfeel. Real and compound milk chocolate is increasingly used in the formulation of various beverages and confectionery products, such as cakes, shakes, croissants, and hot chocolate, which has contributed to the growth of the milk chocolate market.

Dark chocolate segment is projected to grow at the highest CAGR during the forecast period. Dark chocolate provides consumers with premium appeal along with health, sensory, and texture benefits. They are rich in antioxidants, can balance blood pressure levels, and provide many other benefits, thereby enticing consumers to purchase them.

By Form Analysis

Adaptability in Various Application Areas Makes Coatings a Leading Segment

By form, the market is segmented into chips, slabs, coatings, and others.

Coatings are the most widely used form of real and compound chocolate and are likely to lead during the forecast period. Using different fats means that compound coatings can have many different textures and be used in various applications, such as coatings in ice cream sticks and baked goods. The compound coating does not require tempering, which is more suitable for different temperatures and applications. In addition, since there are not so many guidelines on ingredients, compound coatings can be enhanced or flavored with anything and can offer unlimited options.

Chocolate chips are also experiencing significant growth, especially in the artisanal baking industry, used for cookie development. In addition, most chocolate chip recipes are made with dark chocolate, which provides added value in terms of solid antioxidant potential.

By Application Analysis

Confectionery Segment to Dominate Market with High Inclusion of Real and Compound Chocolate in Production

Based on application, the market is categorized into confectionary, bakery, dairy and frozen desserts, beverages, and others.

Confectionary segment holds the largest market share in the application category of real and compound chocolate. Chocolate confectionaries are popular among young and mature consumers owing to their unique taste and texture. Such products have rich flavor and often associated with  happiness which contributes to their global appeal.

Bakery segment is anticipated to grow at the highest CAGR during the foreseeing period. Compound and real chocolates are traditionally used in the bakery industry for coating, filling, and enhance color & texture of bakery products. It enables bakers to get more creative in product innovation and provide a sensory experience in baked goods, thereby offering promising growth opportunities.

REGIONAL INSIGHTS

Based on geography, the market for real and compound chocolates is studied across North America, Europe, Asia Pacific, South America, and the Middle East & Africa.

Europe to Exhibit Highest Growth Supported by Large Cocoa Processing Base

The European real and compound chocolate market stood at USD 15.59 billion in 2023. Europe is expected to hold the largest real and compound chocolate market share, owing to the large cocoa processing base and strong manufacturing industry present in the region. According to the International Cocoa Organization, the German industry processed 445,000 tons of cocoa beans in 2020/21. Although the demand is high, European chocolate manufacturers often process cocoa beans themselves or buy semi-finished products from European processors, making the competition fierce. Multinational companies, such as Barry Callebaut AG, Cargill Inc., Cémoi Group, and Olam International, are based in Europe and supply a full range of semi-finished cocoa products for the European food, beverages, and confectionery industry.

North America consists of a huge customer base and the second-largest market for real and compound chocolate, owing to the high per capita consumption of chocolate-based products. Coupled with this, the growing awareness regarding the benefits of healthy confectioneries among consumers has augmented the market growth. The shift to at-home consumption is reshaping and accelerating change in consumer behavior. Chocolate remains a leading flavor in several treats, so manufacturers and brands are bringing cocoa into new formats and varieties, including compounds and cocoa nibs, to satisfy consumers’ demands. The need for "better-for-me" alternative products is anticipated to accelerate as health and well-being have become a top priority in the region. Furthermore, the demand for premium and seasonal confectioneries on various festivals and celebratory occasions also drives the region's market growth.

Asia Pacific holds the third-largest market share due to the growing millennial population in the region and their rising inclination toward high-quality chocolate confectioneries in emerging economies, such as India and China. Furthermore, cocoa processing at the origin for flavor cocoa is also a key factor for regions' growth. According to the Cocoa Association of Asia, cocoa processing in Southeast Asia has increased by 4.09% from 213,313 tons in Q1-2022 to 222,028 tons in Q1-2023. Indonesia is one of the vital countries holding a higher share of Southeast Asian cocoa grinding. The three multinational giants Cargill Inc., Olam International, and Barry Callebaut AG are behind Indonesia's strong position in cocoa grinding.  

These companies dominate the cocoa processing at their place of origin, making the semi-finished cocoa products market more competitive. Therefore, it is becoming increasingly important for Small and Medium-Sized Enterprises (SMEs) to provide value-added cocoa products made from specialty cocoa in the market, contributing to the growth of compound and real chocolate in the region.

South America and the Middle East & Africa hold the least market share; however, the evolving taste preferences and the rising demand of consumers for chocolate confectioneries have boosted the market in the region. Consumers are increasingly interested in the artisanal elements that make up the taste and the product's origin. As a result, consumers have started to look for exclusive chocolate and sugar confectionery products that are less mainstream. Compared to traditional sweets, UAE consumers prefer to give away high-quality boxed chocolates, which come in different shapes and sizes and have exquisite packaging. This factor has further increased the influx of global premium chocolate brands, such as Mars Inc., into the country and positively aided in the region's market growth.

KEY INDUSTRY PLAYERS

Focus on Geographical Expansion and New Product Launches to Effectively Penetrate the Market

The global real and compound chocolate industry is highly developed, with several multinational companies occupying the majority. Barry Callebaut AG, Puratos Group, and Mondelez International dominate the market. The primary strategy adopted by the major market players is to focus on new product innovations that focus on health, taste, and packaging. For instance, in 2021, Mondelez International acquired Hu Master Holdings, a leader in premium chocolate in the U.S., to expand vegan and paleo-friendly chocolate bars, which follow a strict set of Ultrasimple™ ingredient guardrails and sourcing practices.

List of Top Real and Compound Chocolate Companies:

• Barry Callebaut AG (Switzerland)


• Puratos Group (Belgium)


• Mondelez International (U.S.)


• Cargill Incorporated (U.S.)


• Nestlé S.A. (Switzerland)


• Fuji Oil Company Limited (Japan)


• The Hershey Company (U.S.)


• Mars Incorporated (U.S.)


• Olam International (Singapore)


• CEMOI Group (France)

KEY INDUSTRY DEVELOPMENTS:

• March 2024 - Cargill India, a subsidiary of Cargill Inc., expanded its product portfolio by unveiling block chocolates, chocolate chips, and cocoa powder products under its NatureFresh Professional brand. The company developed these products for manufacturers from the food & bakery industry across India.


• June 2023 - Barry Callebaut expanded its dairy-free chocolate portfolio to the Mexican market by unveiling the Callebaut NXT and SICAO Zero brands. Under these brands, the company is targeting consumers with specialty claims such as dairy-free, low-sugar, and environmentally-friendly chocolate.


• November 2022 - Barry Callebaut, a global leader in chocolate and confectionery ingredients manufacturing, invested nearly USD 52.36 million to build a new production facility in India at Neemrana, Delhi. Its new facility will cover about 20,000 sq. meter area, which includes state-of-the-art assembly lines for producing chocolate & compounds and an R&D laboratory.


• October 2022 - Barry Callebaut, a Swiss-based chocolate company, introduced a new next-generation chocolate bar. The new bar contains 60-80% cocoa and uses nearly 50% less sugar than traditional chocolate. The company has taken more than 20 years of research to develop this new product.


• June 2021 - Puratos U.K., a multinational organization that offers innovative products, launched two new chocolate products in its Belcolade range that aim to maintain the taste of real Belgian chocolate despite containing 40% less sugar. Belcolade Selection Noir, made from 55% cocoa, is a 'balanced' dark chocolate with 'fruity notes and a smooth roasted cacao flavor,' while Belcolade Selection Lait, containing 34% cocoa, is milk chocolate with 'sweet caramel notes and cacao flavor.'

REPORT COVERAGE

The real and compound chocolate market research report offers qualitative and quantitative insights into the chocolate and chocolate confectionery industry. It focuses on significant aspects such as competitive landscape, product type, and product application areas. Besides this, it offers insights into the various market trends and highlights vital industry developments. In addition to these mentioned factors, it encompasses several other factors that have contributed to the market growth in recent years.

Report Scope & Segmentation