Cocoa is the raw material used in making chocolate and cocoa powder. It is derived from cocoa beans that grow on cocoa tree plantations in tropical countries. Cocoa offers various health benefits such as contains antioxidants, improves blood flow etc. It is a key ingredient in many confectionery products and desserts. Growing health awareness has boosted the consumption of dark chocolate due its high cocoa content. Moreover, changing lifestyle and rising disposable income have increased the demand for premium chocolates and cocoa based products.
The global cocoa Market is estimated to be valued at US$ 11,499.6 Mn in 2023 and is expected to exhibit a CAGR of 3.4% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market Opportunity:
The growing demand for confectioneries is driving the cocoa market. Rapid urbanization, changing food habits and increasing spending on snacking has increased the sale of chocolates and other cocoa based products globally. According to a report, the global confectionery market is projected to reach US$ 238 billion by 2025 growing at a CAGR of 3-4%. Major players in chocolate and cocoa confectionery market are expanding their portfolio by introducing innovative products to cater diverse consumer tastes. Furthermore, the demand for chocolate fillings and coatings from bakery and dairy industries is also rising sharply. As confectionery continues to be a popular snack globally, the demand for cocoa is expected to rise significantly thereby opening huge growth opportunities for cocoa market over the forecast period.
Porter’s Analysis
Threat of new entrants: The cocoa market has high set up and production costs which discourage new entrants. Established players dominate global sourcing and marketing channels.
Bargaining power of buyers: Large buyers like candy manufacturers have significant bargaining power to negotiate lower prices from suppliers due to their high purchase volumes.
Bargaining power of suppliers: Cocoa farmers have low bargaining power as cocoa beans are perishable and prices are set by commodity exchanges and speculators. Suppliers are highly dependent on a few multinational companies for sale of their crops.
Threat of new substitutes: Alternatives to cocoa like carob have limited potential to replace cocoa due to strong consumer preferences and dependence on cocoa flavor and texture in chocolates and confectionery products.
Competitive rivalry: The cocoa market has a few large multinational players leading to high competition in pricing, product quality, sourcing and market share.
SWOT Analysis
Strengths: Growing global demand for chocolate and cocoa-based products. Established supply chains and large-scale production capabilities of key players.
Weaknesses: Vulnerability to weather conditions and pests impacting cocoa crop yields. Heavy dependence on a few producing countries in West Africa.
Opportunities: Increasing health-conscious consumers driving demand for natural, less sweetened and organic cocoa products. Emerging markets in Asia Pacific and Latin America offer new opportunities for growth.
Threats: Rising operating costs and commodity price volatility. Concerns around ethical sourcing and sustainability may impact brand image.
Key Takeaways
The global cocoa market is expected to witness high growth due to increasing consumption of chocolate confectionery and cocoa-based products. The global cocoa Market is estimated to be valued at US$ 11,499.6 Mn in 2023 and is expected to exhibit a CAGR of 3.4% over the forecast period 2023 to 2030.
The Asia Pacific region is emerging as the fastest growing regional market with China, India and Japan among the major contributors to growth. West Africa led by Ivory Coast and Ghana dominates global cocoa production with approximately 70% share due to favorable climatic conditions. Indonesia and Brazil are other major producing countries in Asia Pacific and Latin America respectively. Key players are focusing on sustainable cocoa sourcing from farmers and addressing environmental and social concerns around crop cultivation.
Key players operating in the cocoa market are 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, and United Cocoa Processor.
