Compound Chocolate Market - Forecasts from 2022 to 2027

The global compound chocolate market was evaluated at US$14.576 billion for the year 2020.

Compound chocolates are made with cocoa butter replacement (CBS) or cocoa butter equivalent (CBE) (CBE). Hard fat or semi-solid at room temperatures, such as coconut oil and palm kernel oil, are extensively used vegetable fats. The market for compound chocolate is being driven by its functionality at a reduced price. It means that demand for compound chocolate is increasing as a result of its practical features as a replica of coverture or real chocolate at a lower price than coverture chocolate.

The vast utilization of compound chocolate in the production of several products is fueling the worldwide compound chocolate market's growth. Compound chocolates' versatility in blending with other goods and providing extraordinary taste and flavour is driving up demand for compound chocolate products. Furthermore, sugar-free, organic, and dark chocolate consumption is also increasing due to a growing interest in healthier lifestyles. Compound chocolate's advantages, such as its lower cost compared to pure cocoa-based chocolates and the fact that it hardens without tempering, make it a great choice for food manufacturers in a variety of industries, including bakery, confectionery, ice cream, and frozen desserts.

However, the global compound chocolate market relies on global raw material supply, quality, and cost. Price and supply changes in raw commodities, such as cocoa, can have a detrimental influence on the market due to crop disease, climate change, and labour shortages. Failure to recoup increased prices, as well as shortages in the availability or quality of raw ingredients such as cocoa butter, cocoa powder, sugar, and others, could have a negative influence on the market. Product delivery is further hampered by considerable changes in regulatory directives, legal systems, and customs in the regions.

Because of its diverse taste and texture, milk chocolate is more often consumed and used in numerous chocolate-based confectionery items. Milk chocolate has a creamy texture and flavour since it is produced using milk solids. The use of compound milk chocolate in the formulation of various beverages and confectionery items, such as cakes, shakes, croissants, and hot chocolate, has contributed to the milk chocolate market's expansion. Furthermore, dark chocolate appeals to customers while also providing health, sensory, and textural benefits and captures a substantial market share. Dark chocolates are high in antioxidants, can help lower blood pressure, and have various other health benefits, enticing customers to buy them.

Coatings are the most common type of compound chocolate, and they are expected to lead the market over the projected timeframe. Because different fats are employed, compound coatings can have a variety of textures and can be used in several applications, such as ice cream sticks and baked products. The compound coating does not need to be tempered, making it more versatile in terms of temperature and application. Furthermore, because there are few restrictions on ingredients, compound coatings can be improved or flavoured with anything, providing an almost limitless range of possibilities. Additionally, chocolate chips are increasingly gaining popularity, particularly in the artisanal baking business, where they are used to make cookies. Besides, most chocolate chip recipes use dark chocolate, which gives additional antioxidant benefits.

Producing a deeper chocolate flavour recognizes the demand for chocolate. Compound chocolates are more durable and stable in warmer temperatures. They are ideal for confectionery items developments and production processes as they are without the need for additional tempering effort. These chocolates are also commonly found in bakeries. It allows bakers to be more innovative in their product development and deliver a sensory experience in baked goods, resulting in promising growth opportunities.

Because of its vast cocoa processing base and robust manufacturing industry, Europe is likely to have the largest proportion of the market. According to statistics by European Commission, PRODCOM, the European Union, and the United Kingdom produced approximately 3.9 million tonnes of chocolate items in 2019. Chocolate bars, pralines, and cocoa-based sweets are among these products. Furthermore, due to the high per capita consumption of chocolate-based products, North America has a wide client base and is the second-largest market for compound chocolate. In addition, rising consumer awareness about the advantages of healthy confectioneries has boosted the market growth.

Recent Development

Barry Callebaut released a complete dairy-free chocolate compound line in November 2021, boosting the company's plant-based offerings. These new possibilities are entirely made of plants. For various purposes, the new line includes dairy-free EZ melt compound, compound chip/chunk, compound soft chunk, compound soft-shaped chunks, and bulk liquid.

Cargill India, the maker of Nature Fresh, Gemini, Sweekar, Rath, and Sunflower edible oils, entered the chocolate compounds market in India in June 2020, in conjunction with a local manufacturer in western India.

COVID-19 Impact

The COVID-19 outbreak had a relatively negative effect on the Global Compound Chocolate market. Because most countries went under lockdown in 2020 to prevent the virus from spreading, demand for compound chocolate in the hospitality sector has decreased significantly. According to the Cocoa Association of Asia (CAA), Asia's cocoa grindings decreased by about 10% in the first half of 2020 compared to the same period last year. Cocoa prices declined, and shipping expenses climbed during the early phases of the COVID-19 outbreak. Collecting cocoa from smallholder farmers and supplying it to cocoa exporters and processors for chocolate manufacture was the most challenging task. The issue was made worse by transportation constraints and border closures. As a result, chocolate manufacturers experienced a shortage of raw materials, impacting their sales. For example, due to the pandemic, Barry Callebaut AG, a leading producer of premium chocolate, reported a slowdown in the first half of FY 2020. However, during the COVID-19 pandemic, the quick emergence and expansion of online retail, e-commerce, and other distribution channels have opened up new options for retailers. They are expected to increase the market shortly. Furthermore, the global demand for healthy ingredients has evolved, presenting an opportunity for healthier chocolates at both the retail and application levels.

Segmentation

By Type

• Dark
• Milk
• White

By Form

• Chocolate chips/drops/Chunks
• Chocolate Slab
• Chocolate Coatings
• Other Forms

By Application

• Bakery
• Confectionery
• Frozen Desserts and Ice cream
• Beverages
• Cereals
• Other Applications

By Geography

• North America
• USA
• Canada
• Mexico
• South America
• Brazil
• Argentina
• Europe
• United Kingdom
• Germany
• France
• Italy
• Middle East and Africa
• Saudi Arabia
• Israel
• Asia Pacific
• China
• Japan
• India
• South Korea
• Indonesia
• Thailand
• Taiwan