COCOA MARKET ANALYSIS

The cocoa Market size is valued at US$ 14 Bn in 2024 and is expected to reach US$ 18.5 Bn by 2031, growing at a compound annual growth rate (CAGR) of 4.1%  from 2024 to 2031.

The cocoa or cocoa bean is the seed of the Theobroma cacao (cacao tree), a tropical plant originally belonging to the equatorial regions of Americas. Cocoa is the dried and fermented seed of cacao tree from which cocoa liquor is produced. From this cocoa liquor, cocoa butter and cocoa powder is produced. Cocoa liquor is the main raw material for manufacturing chocolates. The cocoa products such as cocoa liquor, cocoa butter, and cocoa powder are widely used for making confections, used as flavoring in beverages, used as toppings in different foods, and used as fillings in bakery. The cocoa is also used in cosmetics, healthcare, pharmaceuticals and nutraceuticals industry as flavoring and coloring agents. Cocoa is also used to manufacture toiletries because of its aroma and flavor. The wide and growing application of cocoa in different industries is one of the significant factors responsible for propelling the global cocoa market during the forecast period.  

Global Cocoa Market Regional Insights:

• Europe is expected to be the largest market for the global cocoa market, which is expected to grow at a CAGR of over 43% during the forecast period. The growth of the global cocoa market in Europe is attributed to increasing demand for cocoa in countries such as France, Germany, the Netherlands, and Russia.
• Asia Pacific is expected to be the second-largest market for the global cocoa market, which is expected to grow at a CAGR of over 27% during the forecast period. The growth of the global cocoa market in Asia Pacific is attributed to the rising consumption of chocolates in countries such as India and China, and the increasing emphasis on producing high-quality cocoa beans in the region.
• North America is expected to be the fastest-growing market for the global cocoa market, which is expected to grow at a CAGR of over 15% during the forecast period. The growth of the global cocoa market in North America is attributed to the increasing demand for chocolate in North America, which is a key factor enhancing the growth of the global cocoa market in the region.
• Latin America is expected to be the fastest-growing market for the global cocoa market, which is expected to grow at a CAGR of over 8% during the forecast period. The growth of the global cocoa market in Latin America is attributed to increasing demand for cocoa in countries such as Brazil, Argentina, and Mexico.
• Middle East & Africa is expected to be the fastest-growing market for the global cocoa market, which is expected to grow at a CAGR of over 7% during the forecast period. The growth of the global cocoa market in the Middle East and Africa is attributed to the rising demand for cocoa in countries such as Turkey, Egypt, Saudi Arabia, South Africa, the UAE, Morocco, and Qatar.

Figure 1. Global Cocoa Market Share (%), By Region, 2024

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Analyst’s Views:

Customers and consumers are highly captivated by the stories behind the products they buy and consume. The story behind the product may greatly influence the buying decision of the customer. The manufacturers and processors of chocolate and cocoa products are paying utmost attention to storytelling in their branding strategies. The consumers are interested to know the stories behind a product, and this gives an opportunity to the cocoa manufacturers and traders to highlight the story behind the origin of the cocoa, especially in the case of specialty cocoa. Mostly, the storytelling strategy is used by the chocolate manufacturing companies to show cocoa beans and cacao trees in their advertising. Nestle Kit-Kat and Cadbury Bournville are examples of chocolate brands that use storytelling strategies.

Moreover, the demand for high quality chocolates in Europe is driving the demand for specialty cocoa and fine-flavor cocoa. These two cocoas are available in less quantity and are very popular for their taste and quality. Hence, the demand for specialty cocoa and fine-flavor cocoa is expected to grow at a significant pace in the forthcoming years. Furthermore, the growing application of cocoa in industries such as pharmaceuticals, food & beverages, cosmetics, and confectionery is boosting the growth of the global cocoa market.

Global Cocoa Market Drivers:

The growing demand for dark and premium chocolates around the globe: The global demand for specialty and premium chocolate products has seen a steady rise in recent years. Consumers worldwide are increasingly preferring chocolates with higher cacao content and unique flavor profiles. This rising popularity of dark, single-origin, and artisanal chocolates is driving significant growth in the global cocoa market. Cocoa producers are investing in improving the quality and yield of their crops to meet the standards required for premium chocolate production. According to data from the World Bank, major cocoa producing nations like Cote d'Ivoire and Ghana increased their investments in climate-smart cocoa farming practices and rural development programs by over 35% between 2020 and 2022. This has positively impacted cocoa bean quality. Leading chocolate brands are also collaborating directly with farmer cooperatives and paying higher prices to encourage the shift towards specialty cocoa production.

The premiumization trend is expected to continue well into the future as more consumer’s associate dark and high-cacao chocolates with natural ingredients, artisanal craftsmanship, and health benefits like antioxidants. Younger consumers are especially willing to pay premium prices for unique flavors and sustainable sourcing narratives presented by niche chocolate makers. As a result, volumes of specialty cocoas are likely to see more than proportional gains compared to regular cocoas over the next 5 years.2020, Data from the European Cocoa Association shows specialty cocoas already account for 10% of the overall EU imports, up from 6% in 2018. This rising demand for premium, single-origin and dark chocolates around the world is driving long term growth opportunities for the global cocoa market. Investments in improving the quality and volumes of specialty cocoas will be crucial for producers to tap into this fast-growing segment and maximize value from the cocoa value chain.

Increasing production of cocoa coupled with the rising adoption of advanced technology for processing and manufacturing of cocoa: The global cocoa market is experiencing significant growth due to rising production levels and advancing technologies used in cocoa processing and manufacturing. Cocoa production has been increasing steadily over the past decade across major producing countries in West Africa and South America. According to data from the World Cocoa Foundation, global cocoa bean production rose from over 4 million tons in 2010 to approximately 5 million tons in 2020. Countries like Cote d'Ivoire, Ghana, Indonesia, and Ecuador have substantially expanded their cocoa crop acreage and yield through initiatives that promote sustainable farming practices, soil fertility management, pest and disease control, as well as climate-resilient varieties.

At the same time, cocoa processors and product manufacturers have widely adopted industrial-scale equipment, automated machinery, and digital quality control technologies that have optimized operations and consistently improved productivity. For example, data from the UN Food and Agriculture Organization shows cocoa grinding capacity increased by over 15% between 2015 and 2020 in Europe and North America alone. Innovations like real-time moisture detection, automated sorting, and traceability systems have allowed companies to mass produce cocoa ingredients and products with unprecedented precision and consistency in quality. This technological advancement across the supply chain has bolstered global supply capabilities to meet the rapidly growing demand for cocoa and cocoa-based end products.

Looking ahead, favouable agricultural and economic conditions are expected to spur further gains in cocoa cultivation across major developing or countries. At the same time, ongoing research and development of advanced post-harvest and processing solutions will continue enhancing supply chain efficiencies to support worldwide market expansion. New production technologies involving climate-control greenhouses and vertical planting systems also aim to achieve higher and more reliable cocoa yields per acre, independent of weather variables. Such advancements are anticipated to play a key role in sustainably securing cocoa supplies and driving future market growth well into the next decade.

Global Cocoa Market Opportunities:

Growing demand for cocoa beans from the pharmaceutical industry: The growing demand for cocoa beans from the pharmaceutical industry provides a significant opportunity for the global cocoa market. Cocoa beans contain high levels of flavonoids that have several health benefits. Flavonoids are a class of antioxidants that can improve heart health, lower blood pressure, and reduce inflammation. In recent years, clinical research studies have shown that cocoa beans can help treat Alzheimer's disease, reduce symptoms of asthma and protect against certain types of cancer as well.

As consumers increasingly focus on preventive healthcare and seek natural remedies, the use of cocoa-based pharmaceutical products is on the rise. Major pharmaceutical companies are actively researching the medical uses of cocoa and developing supplements, pills, and therapies derived from cocoa. For instance, in 2021, chocolate supplements that contain high concentrations of cocoa flavones are gaining traction as a way to support brain and heart health. The global chocolate supplements market is projected to grow at over 7% annually until 2025, according to the World Health Organization.

This growing demand from the pharmaceutical sector presents global cocoa farmers and manufacturers with a valuable new market vertical. Cocoa-producing countries like Cote d'Ivoire, Ghana, Indonesia, Brazil, and Cameroon can capture more value by investing in research, production, and processing methods that enhance the disease-fighting properties of their cocoa beans. According to a 2022 study by Food and Agriculture Organization, nations that develop expertise in producing specially treated 'nutraceuticals cocoa' will attract premium prices from health-conscious consumers and pharmaceutical buyers in both developed and increasingly wealthy developing nations. This will boost farmer incomes and support more sustainable cocoa cultivation practices over the long run.

Increasing use of cocoa in the formulation of healthy beverages: The global cocoa market has traditionally relied upon chocolate confectionery as its main source of demand. However, evolving consumer preferences towards healthier beverage and snack options present a major opportunity for cocoa producers to diversify into new categories. Cocoa contains flavonoids that research has linked to potential health benefits such as lower blood pressure and healthier brain function. Beverages provide an attractive delivery system for these properties compared to high sugar chocolates. Major beverage companies have already begun incorporating small amounts of high-quality cocoa powder and extracts into their products. These innovators are seeing growing sales as health-conscious buyers recognize cocoa's reputation as a nutrient dense superfood. Looking ahead, as lifestyle-related diseases continue rising in many developing nations, per the WHO, consumers will increasingly demand beverages with functional benefits rather than empty calories. The cocoanut-milk hybrids and plant-based protein blends now entering the market show how cocoa can feature prominently in next-generation wellness formulations. By carefully crafting diverse and tasty cocoa-infused beverages that also communicate understandable wellness propositions, the global cocoa market has an unprecedented chance to find entirely new demographic segments and expand total volume far outside the current customer base. Success in reaching younger age groups not traditionally associated with chocolate through innovative beverage plays could carry momentum for the raw material for decades to come.

Global Cocoa Market Trends:

• Increasing demand for online distribution channel: Online shopping has indeed become a growing trend globally and is influencing various industries and markets. The global cocoa market is no exception. With more and more people preferring the convenience of online shopping over visiting physical stores, cocoa product companies are taking their businesses online too. Brands and manufacturers dealing with cocoa confectioneries, chocolates and other cocoa-based food products now have prominent web pages and engage in aggressive online marketing. They showcase their diverse product ranges and offer attractive discounts and deals for online purchases. This is helping boost the demand for cocoa products substantially. For instance, according to data from Eurostat, the statistical office of the European Union, the e-commerce sales of food & beverages grew by 25% in 2021 compared to the previous year.
• The trend is steadily driving more cocoa farmers and exporters to focus on meeting the demands of online channels. Countries like Cote d'Ivoire, which produces around 40% of the world's cocoa, have taken initiatives to streamline their supply chain operations to facilitate swift delivery of cocoa beans and intermediary products to online retailers worldwide. As a result, cocoa trading platforms are also enhancing their online infrastructure and serviceability. International non-profit organizations like USAID have projects assisting cocoa growers in Ivory Coast to adopt technological and management skills to better align with the online marketplace. Thus, the burgeoning online shopping culture has undoubtedly opened new avenues for the global cocoa sector to explore. It is compelling participants across the value chain to upgrade and transform as per the rapidly evolving digital commerce space. This will go a long way in ensuring the sustainability and growth of the cocoa market globally.
• Increasing demand for organic and fair trade cocoa: The growing demand for organic and fair trade cocoa is having a significant impact on the global cocoa market. Consumers today are increasingly concerned about the social and environmental sustainability of the products they purchase. They want assurance that cocoa is produced safely, without harmful chemicals, and through ethical supply chains that fair compensate farmers. This shift in consumer preferences has created new opportunities for cocoa farmers but also new challenges for the industry. Farmers are experimenting with organic and fair trade production methods that are kinder to the environment and local communities. However, the transition involves changes to farming practices as well as certification requirements. It can be an expensive process that not all farmers have means to implement. Cocoa companies and trading intermediaries are likewise adapting their sourcing models and investing in programs to promote sustainability standards.

Global Cocoa Market Restraints:

Changing government regulations affects the production and selling policies of cocoa: Changing government regulations around the production and sale of cocoa are posing significant challenges for the industry. Many cocoa producing countries have implemented stricter environmental and labor laws in recent years to curb issues like deforestation and child labor on cocoa farms. While these regulations aim to address important social and environmental problems, they have also made cocoa cultivation more complex and costly for farmers. The additional paperwork, certifications, and monitoring required to comply with new rules have increased operating expenses. Many smallholder farmers now struggle with the administrative burden as well as hiring labour that meets the higher minimum age limits. As a result, cocoa yields in countries like Cote d'Ivoire and Ghana have declined in recent planting seasons, according to export data from 2021-2022, published by the International Cocoa Organization.

The production slowdown has tightened global cocoa supplies and driven prices up over the past two years. Higher costs have also been passed on to manufacturers in cocoa consuming nations. Several multinational chocolate companies have reported shrinking profit margins due to rising cocoa bean prices. As a result, some players have scaled back marketing budgets and put investment plans for new products on hold. Consumer prices have risen too, causing demand to level off in major markets like the U.S. and Western Europe. Consumers in recession-impacted economies are more sensitive to price increases, as inflation squeezes household incomes. The combined impacts of tight supplies and softer demand mean the global cocoa sector is facing more challenging conditions for growth over the medium term.

While regulations aim to remedy social and ecological issues, the cocoa industry underscores the need for implementation methods that do not overly burden farmers. Plans for supporting smallholders' compliance through training, financing, and partnerships could help maintain yields and supplies. With collaboration between producers, buyers, and governments, the necessary changes can be adopted without restraining an industry that supports livelihoods around the world.

Counterbalance: To overcome this restraint, the key market players need to follow all labor laws, which might increase the global cocoa market.

Recent Developments:

• In March 2022, Crunchy Cookie Chocolate Spread was launched by Hershey India Pvt Ltd as an expansion of the existing Hershey's chocolate spread, which is available in flavors such as cocoa with almond and cocoa. Hershey India Pvt Ltd is a subsidiary of The Hershey Company, a well-established and renowned global producer of chocolates and confectionery. The Indian subsidiary, Hershey India Private Limited, was founded in 2013 and is engaged in the manufacturing of flavoring extracts, syrups, and powders. The company's product line includes a variety of chocolate and cocoa-based products, catering to the diverse preferences of consumers.

• In November 2022, Niche Cocoa Industry announced the expansion of its manufacturing facility in Franklin, Wisconsin. The development will also improve the company's direct presence in the U.S. by strengthening its global market presence. Niche Cocoa Industry, the largest privately operated cocoa processing company in Ghana, has announced the establishment of its first North American manufacturing facility in Franklin, Wisconsin. The company plans to lease an existing 44,000-square foot building in Franklin Business Park, where it will import cocoa cake to be pulverized into cocoa powder for nationwide distribution.

Figure 2. Global Cocoa Market Share (%), By Product Type, 2024

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Top Companies in the Global Cocoa Market

• The Barry Callebaut Group
• The Hershey Company
• Nestlé S.A.
• Cargill Incorporated
• Puratos Group
• Cémoi
• Mars, Incorporated
• Blommer Chocolate Company
• Meiji Holdings Company, Ltd.
• Carlyle Cocoa
• Jindal Cocoa
• United Cocoa Processor

Definition: The Cocoa is a powder made from roasted, husked, and ground seeds of the cacao tree, Theobroma cacao, from which much of the fat has been removed. It is used in various food and beverage applications, including hot cocoa, chocolate, and baked goods. Cocoa beans are native to the Amazon rainforest and are the basis of chocolate and Mesoamerican foods. The beans are roasted, cracked, and deshelled, resulting in pieces called nibs, which are further processed into cocoa solids and cocoa butter. The term "cocoa" is sometimes used interchangeably with "cacao," which refers to the raw, unrefined bean. Cocoa is a significant contributor to economies such as Nigeria, and demand for cocoa products continues to grow steadily.