Cocoa Powder Market Outlook, 2029

As the scent of chocolate goes around kitchens around the world, this is where the demand to indulge and for health converges as with every wonderful bite, consumers indulge in a sweet savoring of the moment. Cocoa powder is a highly concentrated powdered product that is produced from a paste that is derived from the seeds of the cacao tree. It is used in beverages and also as a flavoring. It is fermented and dried. Cocoa adds flavour, texture and color to products. The International Cocoa Powder Market would boom as the demand for sugarless products like obese and diabetic sweets would increase apart from the factors of industrialization and a better purchasing power per capita.

Consumer awareness of the nutritional benefits of the cocoa flavoring constituents because of the presence of flavonoids is a significant driver of the industry. Also, an antioxidant present in chocolate and green tea, epicatechin, prevents the formation of a sticky protein called amyloid plaques or plaques, common with Alzheimer's disease. Intake of chocolate might also lessen the intake of low-density lipoprotein, or LDL, cholesterol, according to the Journal of Nutrition. In 2020, The Netherlands purchased about 91 per cent of its cocoa beans from West Africa, although much of these were bought in bulk. High-quality chocolate has increased, over the years, and so has the number of bean-to-bar manufacturers in the Netherlands.

The International Cocoa Organization is a worldwide organization whose membership consists of cocoa-producing and cocoa-consuming countries. The ICCO is essentially a forum where stakeholders in international cocoa trade meet to deliberate on matters of interest to the global industry. This is the world leader in cocoa statistics dating back to around 70 years of history.

According to the research report, “Global Cocoa Powder Market Outlook 2029” the market is anticipated to cross USD 9 Billion by 2029, increasing from USD 7.60 Billion in 2023. The market is expected to grow with a 3.64% CAGR from 2024 to 2029.The increased demand for cocoa-based products across different industries and a higher level of consumer awareness concerning the health benefits of cocoa. When consumers, increasingly desirous of being healthy, look for cocoa due to its antioxidants or cardiovascular benefits, demand increases. Besides, flexibility of cocoa powder in various culinary, beverages, cosmetics, pharmaceutical, and other industrial uses supports the growth of its market.

Furthermore, innovation in new cocoa-based products that are in accordance with the changing trends and lifestyles of consumers contributes greatly to this growth trend. Powdered Cocoa is the main raw material for most chocolate manufacturing industries that spread across different regions which primarily constitute the end-user industry of the market. So, suppliers of cocoa powder are embracing advanced grinding technologies and micronization techniques for better texture and dispersion. Increasing food service sector that accommodates chocolate drinks, from bakeries to café chains, restaurants, etc., these days is growing rapidly.

According to this trend, increases in the artisanal and high-class chocolate beverages have enhanced premium chocolate powder. Compliance with the local and international food safety standards. These comprise FDA regulations of the USA and EFSA guidelines in Europe. Cocoa production is fairly sensitive to climate conditions. Increasing temperatures coupled with erratic rainfall patterns negatively influence the quality as well as yield of cocoa. Cocoa trees are susceptible to a variety of pests-cocoa moths, for instance-and diseases-black pod disease is one example-and their devastating effects on crop yields. Cocoa farming generally requires very large quantities of hand labor-an implication sustained over time for child labor and worker rights in cocoa-producing countries.

Market Drivers

• Increased Investment in Cocoa Research and Development:The cocoa industry is witnessing heightened investment in research and development to improve yield, quality, and sustainability. Innovations in breeding techniques, pest management, and soil health are enhancing cocoa production capabilities. Research initiatives aimed at developing disease-resistant cocoa varieties help mitigate the risks associated with climate change and environmental challenges. This progress not only ensures a stable supply of cocoa beans for processing into powder but also promotes higher quality products that can meet consumer demands.
• Expansion of the E-commerce Market: The growth of e-commerce platforms has significantly impacted the cocoa powder market. Online shopping offers consumers convenient access to a wider variety of cocoa powder products, including specialty and premium brands. The rise of health-focused e-commerce sites and subscription services has also facilitated the discovery and purchase of cocoa powder, allowing consumers to explore different brands and products. This trend is particularly relevant as consumers increasingly turn to online shopping for convenience and product variety.

Market Challenges

• Volatility in Cocoa Prices and Supply Chain Disruptions: Cocoa powder production is highly dependent on cocoa bean supply, primarily sourced from African countries such as Côte d'Ivoire and Ghana. Fluctuations in the prices of cocoa beans due to unpredictable weather conditions, pests, and political instability in these regions pose a significant challenge to the market. Furthermore, supply chain disruptions, including transportation issues, tariffs, and trade restrictions, affect the availability and pricing of cocoa powder, impacting manufacturers' profit margins.
• Health Concerns over Sugar and Fat Content in Cocoa Products: While cocoa powder itself is rich in beneficial compounds, many cocoa-based products, particularly chocolates and confectioneries, contain high levels of sugar and fat. With increasing consumer awareness of the negative health impacts of excessive sugar and fat intake, there has been a shift away from traditional chocolate products. Manufacturers need to reformulate their offerings to produce healthier, low-sugar alternatives to align with consumer preferences, which can be challenging in maintaining product quality and taste.

Market Trends

• Integration of Cocoa in Functional Beverages: The trend toward health-oriented beverages has led to an increased use of cocoa powder in functional drinks. Brands are innovating by creating cocoa-infused beverages, such as smoothies, protein shakes, and even wellness shots that promote energy, relaxation, or recovery. This diversification not only expands the market for cocoa powder but also positions it as a versatile ingredient in the health beverage segment.
• Emergence of Gourmet and Artisan Cocoa Products:The growing interest in gourmet and artisanal food products has led to a rise in premium cocoa powder offerings. Consumers are willing to pay higher prices for high-quality, ethically sourced, and craft-produced cocoa powder. This trend aligns with the overall growth of the artisanal food market, where consumers seek unique flavor profiles and experiences. Manufacturers can capitalize on this trend by offering limited-edition or specialty cocoa powders that highlight unique sourcing stories or production methods.

Natural cocoa powder is the largest market driver for cocoa powders, mostly because it is gaining popularity among health-conscious consumers looking for minimally processed and organic food options.

Demand for natural cocoa powder is revealed by several associated factors that reflect consumers' broader aspirations toward health, sustainability, and culinary versatility. Since consumers became more aware of health benefits attributed to cocoa-its richness in antioxidants, as well as potential cardiovascular advantages-the appeal of natural cocoa powder skyrocketed. Natural cocoa powder follows its natural flavor profile and nutritional contents, making it more in favor of baking and cooking without having to use Dutch-processed. In Dutch-processed, the processing procedure involves neutralization using alkali to remove excess acidity that affects the nutritional and flavor profile negatively.

This unprocessed nature aligns well with the trend of clean eating, where consumers are actively searching for foods that are less refined and free from additives. The organic movement, therefore, is storming the globe whereby most consumers gravitate towards being supplied with ingredients from sustainable, eco-friendly productions. Natural cocoa powder fits well into this story as it often originates from organic cocoa beans, appealing to environmentally conscious individuals and those who are sensitive to their food sources.

Another attribute that has helped natural cocoa powder dominate the marketplace is its ubiquity of usage as it is present in everything from baked goods and beverages to gourmet chocolates, so it's omnipresent in both home and commercial food preparation. With online shopping venues that add expanded customer reachability for specialty food products, high-grade natural cocoa powder also could not be very far behind to make a difference.

The largest consumer segment is chocolate & confectionery in the global cocoa powder market, owing to the growing demand for chocolate-based products and the use of cocoa powder as an indispensable ingredient for various confectionery products.

The use of cocoa powder is also important in preparing a number of confectionery products and chocolate bars, truffles, pralines, among other such chocolate-coated products. It is therefore crucial in meeting the requirements on flavor and color profile for these products. Today, with the shifting consumer preferences and need for more premiums and gourmet chocolate products, the demand for quality cocoa powder is extremely high. With the growing world population, increasing disposable incomes, and changing lifestyles, the overall consumption of chocolate and confectionery products worldwide was highly increased.

Ease and indulgence in the products led to their popularity as snacks and desserts that eventually necessitated the demand for cocoa powder in different regions. This versatility allowed innovative diversity in chocolate and confectionery products that manufacturers could design in accordance with the ever-changing choices of consumers. This increased demand for artisan and premium chocolate products have also increased demand for cocoa powder. Consumers want unique flavor profiles and premium ingredients, which makes the company use high-quality cocoa powder in its products.

This trend is particularly prominent in developed regions like North America and Europe, where consumers are willing to pay a premium for gourmet chocolate experiences. This will further emphasize the dominance of the chocolate and confectionery segment in the cocoa powder market, too, due to growing demands from hot chocolate and chocolate milk. The ease of solubility of cocoa powder, coupled with its flavor profile, makes it an excellent ingredient for such beverage trends across the globe.

Offline retail dominates the cocoa powder market because these give the shopper a tangible experience while shopping, which increases trust and customer satisfaction with product quality.

The market for cocoa powder is dominated by offline retail channels, especially supermarkets and specialty stores. This is mainly because of several compelling advantages. Among these are first, physical stores where consumers can directly interact with products, hence evaluating the quality through visual inspection as well as through the touch of the products. For food products such as cocoa powder, its texture and freshness would have to play a significant influence on purchasing decisions.

More importantly, offline retailing ensures the convenience of availability without additional shipping wait, which is what draws consumers to make bulk purchases without any shipping wait, a convenience factor that works well for businesses like cafés and bakeries that must continually replenish their stocks. The consumption of artisanal and premium chocolate drinks has also increased in response to consumer demand for good-quality ingredients that can be verified directly before purchase. Online channels offer easy return and exchange facilities, thus improving the confidence and satisfaction level among customers.

The online platform has other benefits, like no sale or promotional activity done in the physical premises is likely to attract more customers that would have visited the online store. While shopping in a store, the social benefits of shopping remain where, apart from acquiring knowledge, you end up having talks with the salespersons or other shoppers about the product, thereby improving the experience. This enhances the decision to purchase and loyalty towards the brand. This performance is further supported by the increasing demand for gourmet and organic cocoa products around the world, most notably among the developing economies where consumers would pay a premium in exchange for high-quality food choices.

Europe leads in the global market for cocoa powder simply because there is an established chocolate and confectionery industry that insists on superior cocoa powder.

History and tradition in chocolate production in the west have ensured the existence of leaders in chocolate production like Switzerland, Belgium, and Germany. It is an industry which is well entrenched and coming out with steady and heavy demand for cocoa powder-an ingredient in chocolate products and quite several confectionery ones. There is leadership in Europe by the region in terms of cocoa powder. This is together with the big players in cocoa processing companies like Barry Callebaut and Cargill. They have large operations in Europe. These companies lead the market through their strong processing capabilities, new product offerings, and robust distribution networks.

They serve the different needs of the European food and beverage industry by providing cocoa powder for applications ranging from chocolate bars and bakery items to ice cream and beverages. On the other hand, with an affluent European consumer base and an equally impressive appreciation for premium and artisanal chocolate products, there is a good demand for high-grade cocoa powder. Consumers in the region seek a product that tastes much better, feels better, and is sustainable, thus driving the fine and flavorful cocoa powders market. The trend would encourage manufacturers to invest in sourcing top-quality cocoa beans and to develop better processing techniques to meet the evolving preferences of consumers.

European safety and quality standards for food products have also been significant determinants in the cocoa powder market. Overall regulatory conditions in the region ensure that cocoa powder products attain high purity standards, hygiene, and traceability. Focus on quality and safety measures further lends credibility to the position of Europe as one of the major players in the world cocoa powder market and strengthens its competitive advantage.

• In February 2019, Olam invested USD$ 90 million for an 85 percent stake in YTS Holdings Pte Limited, wholly owning PT of Indonesia's largest cocoa processor, BT Cocoa, to seize the opportunity of Asia's trend as the world's largest consumer of cocoa powder. The acquisition meets increasing customer demand for full supply chain integration in the cocoa sector.
• In January 2019, a very well-known Russian B2B maker of chocolate, fillings, and compound coatings, Inforum, was acquired by Barry Callebaut. Barry Callebaut is one of the world's leading manufacturers of high-quality cocoa products.

Considered in this report

• Historic year: 2018
• Base year: 2023
• Estimated year: 2024
• Forecast year: 2029

Aspects covered in this report

• Cocoa Powder market Outlook with its value and forecast along with its segments
• Various drivers and challenges
• On-going trends and developments
• Top profiled companies
• Strategic recommendation

By Type

• Natural Cocoa Powder
• Dutch Process Cocoa Powder
• Others

By Application

• Chocolate & Confectionery
• Bakery
• Beverage
• Functional Food
• Pharmaceutical
• Cosmetics

By Distribution Channel

• Offline
• Online

The approach of the report:

This report consists of a combined approach of primary and secondary research. Initially, secondary research was used to get an understanding of the market and list the companies that are present in it. The secondary research consists of third-party sources such as press releases, annual reports of companies, and government-generated reports and databases.

After gathering the data from secondary sources, primary research was conducted by conducting telephone interviews with the leading players about how the market is functioning and then conducting trade calls with dealers and distributors of the market. Post this; we have started making primary calls to consumers by equally segmenting them in regional aspects, tier aspects, age group, and gender. Once we have primary data with us, we can start verifying the details obtained from secondary sources.

Intended audience

This report can be useful to industry consultants, manufacturers, suppliers, associations, and organizations related to the Cocoa Powder industry, government bodies, and other stakeholders to align their market-centric strategies. In addition to marketing and presentations, it will also increase competitive knowledge about the industry.