The compound chocolate market is expected to register a CAGR of 6.42% during the forecast period (2022-2027).



The COVID-19 outbreak and supply-side issues linked to quality and certification impacted the chocolate market’s sales. With the impact of COVID-19, mainstream consumption of compound chocolate at the retail and industrial levels seemed stable. However, the craft chocolate segment is facing difficulties. The market is observing demand for healthy ingredients, which opens an opportunity for better-for-you chocolates at the retail and application levels.



A primary factor driving the market for compound chocolate is its functionality at a lower price, which is boosting its demand. Its functional attributes allow it to be converted as a replica of coverture or real chocolate at a lower price than coverture chocolate.



Moreover, compound chocolate contains hard fat, making it suitable for products such as granola bars and trail mixes, where baking at higher temperatures is required. The composition of compound chocolate also helps increase the product’s shelf life. Companies are coming up with sustainable solutions for sourcing and the usage of cocoa butter substitutes or cocoa butter equivalents in products.



Compound Chocolate Market Trends



Increasing Demand for Single-origin and Certified Chocolate



The demand for fine flavor cocoa in Europe and North America is experiencing substantial growth. Ultra and high-end beans are being used for gourmet chocolates. Regular, low fine beans are being used for regular premium chocolates, especially in countries like the United Kingdom, the United States, China, India, the Netherlands, Germany, and Switzerland. This development is driven by the health trend and the need for more exclusive products. The premium cocoa market with sustainability and single-origin certification is boosting the market’s overall growth. Manufacturers are introducing single-origin and premium chocolate line-ups in response to the propelling demand. They are also supporting the local economies. These strategies are helping brands gain more profit margins and grow with a more positive brand image. For instance, Nestle set up a new chocolate molding and packing line in Ecuador, which helped the company incorporate the single-origin specific variety "Arriba cocoa" beans to manufacture value-added chocolates for export and domestic consumption.



North America Holds the Largest Market Share



The demand for compound chocolate in North America is expected to grow, supported by the increasing demand for premium chocolate and confectionery items. Greater interest in healthy lifestyles continues to drive the consumption of sugar-free, organic, and dark chocolate. Properties of compound chocolate, such as its attractive price compared to pure cocoa-based chocolates and the ability to harden without tempering, make it an ideal choice for food manufacturers in various segments, such as bakery, confectionery, ice creams, and frozen desserts. Milk chocolate holds a major share in the North American compound chocolate market and continues to register demand, along with other flavors. Companies are coming up with sustainable solutions for sourcing and the usage of cocoa butter substitutes or cocoa butter equivalents for confectionery products.



Compound Chocolate Market Competitor Analysis



The compound chocolate market is fragmented with the presence of various players. Manufacturers are coming up with several innovations in health aspects, with better cocoa butter substitutes (CBS) and cocoa butter equivalent (CBE). Major players in the compound chocolate market are Cargill Incorporated, AAK, Barry Callebaut, and Clasen Quality Chocolate Inc. As the manufacturing methods and flavors of compound chocolates improve, the cost differential in comparison to chocolate is likely to make chocolate compounds a more desirable choice. These companies have set their focus on R&D, aiming to retain their positions in the market or gain a competitive advantage. Furthermore, manufacturers in the market are focusing on special occasions such as Valentine’s Day, Easter, and Christmas in different colors and shapes, matching the theme of the celebration.



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