Cocoa is fully dried and fermented beans that are further processed to use in food, pharmaceutical, and cosmetics applications. Cocoa powder is mostly used in the production of chocolate confectionaries and cocoa paste. Cocoa butter is widely used in the pharmaceutical and cosmetic industry. Consumption of cocoa-rich products provide various health benefits such as reduce hypertension, lower risk of cardiovascular disease and chronic fatigue syndrome.
Global cocoa market is estimated to account for around US$ 11,499.6 million in terms of value in the year 2019 and it predicted to grow at a CAGR of 3.4% during the forecast period (2020-2027).
Rising demand for cocoa powder from food confectionery and other food application such as desserts is expected to foster the market growth of cocoa. Increasing consumption of bakery and confectioneries around the globe is propelling the market growth of the cocoa. According to The University of British Columbia, in Canada retail sales of baked goods grew from $3.2 billion (USD) in 2013 to $3.5 billion (USD) in 2017. Bread sales accounted for the largest portion of baked goods sales each year. In 2017, bread sales accounted for $3.5 billion (USD).
The growing use of cocoa in the cosmetic industry is expected to bring new market opportunities for the cocoa market in the near future. This cocoa butter is gaining significant demand from the cosmetic industry for producing various cosmetic products. This is also attributed to growth in the cosmetic industry in Europe. According to CBI Europe, the beauty and personal care market in Eastern Europe grew steadily at an average annual growth rate of 5.9% in the 2013–2018 period, reaching approximately € 22 billion in 2017.
The volatile price of cocoa due to uncertain weather condition and political instability is expected to hamper the demand and supply. This in turn is expected to restrict the market growth of cocoa. According to climate scientists at the Colombia-based International Centre for Tropical Agriculture (CIAT), expected increasing temperatures will lead to massive declines in cocoa production by 2030 in Ghana and Cote d'Ivoire, both in West Africa. Ghana produces high-quality cocoa that earns a premium price on the world market.
On the basis of region, Europe region dominated the global cocoa market in 2019 with a 43.8% of market share in terms of value, followed by North America and Asia Pacific respectively.
On the basis of product type, cocoa liquor segment dominated the global cocoa market in 2019 with a 43.7% of market share in terms of value, followed by cocoa powder and cocoa butter segments respectively.
Shifting focus of manufacturers to enhance the processing capacities of cocoa in order to meet the growing demand is expected to be a key trend in the market. For instance, in December 2019, Cargill has invested $113 million to expand its cocoa processing sites in the Ivory Coast and Ghana, in a move to meet growing customer demand. Thus, growing focus on increasing production capacity is expected to augment the market growth of cocoa.
Global Cocoa Market - Impact of Coronavirus (Covid-19) Pandemic
The lockdown measures has led to slowdown in demand of cocoa due to a strong relationship between economic growth and chocolate consumption. As disposable income will fall consumption of luxury items such as chocolates will fall. The reduced demand will lead to weaker prices of cocoa for the short period. According to Coherent Market Insights, cocoa market is expected to grow at a lower CAGR between 2020 and 2021.
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