Cocoa Butter Alternatives Market Global Research Report by Type [Cocoa Butter Equivalents, Cocoa Butter Replacers, and Cocoa Butter Substitutes], Source (Shea, Sal, Kokum & Mango Kernel and Illipe & Palm Kernel Stearin), Application (Bakery & Confectionery, Dairy & Frozen Desserts, Sweet & Savory Snacks, and Dips, Sauces, & Dressings), and Region (North America, Europe, Asia-Pacific, and Rest of the World) —Forecast till 2028

Cocoa Butter Alternatives Market Overview

The global Cocoa Butter Alternatives market is projected to register a CAGR of 6.91% and reach a value of USD 1,571.25 million by 2028. The CBAs are primarily mixtures of different vegetable fats used as an alternative to cocoa butter (CB) in chocolate. These are alternatives to conventional cocoa butter. These replacer fats are named cocoa butter alternatives (CBA). They can be mixed with the CB without changing the physical properties. They can be segmented into three categories: Cocoa Butter Equivalents (CBE), Cocoa Butter Substitutes (CBS), and Cocoa Butter Replacers (CBR).

COVID-19 Impact Analysis

Cocoa butter alternatives, namely, cocoa replacers, equivalents, and substitutes, are generally made from the combination of fats obtained from shea, palm oil, and soyabean oil. These key ingredients are then processed in the factory settings to obtain cocoa alternatives. The outbreak of the COVID-19 pandemic and subsequent adoption of lockdown strategies in a large number of countries restricted the availability of labor to carry out the production process. Moreover, the lockdowns also affected the transportation industry, hampering the supply of key raw materials. According to the United States Department of Agriculture (USDA), Indonesia and Malaysia collectively account for nearly 85% of palm oil production in the world. Thus, these countries have emerged as key suppliers of palm oil and palm oil derivatives to the world. Palm oil is supplied globally via specialized shipping containers. Similarly, west African countries, such as Nigeria, Burkina Faso, Mali, Ghana, Benin, and Ivory Coast, are leading producers of shea nuts and shea butter. These countries are highly dependent on global shipping networks to transport their produce to the key markets in Asia-Pacific, North America, and Europe. However, the COVID-19-induced lockdown measures led to the disruption of global shipping networks. Cocoa butter is obtained from cocoa beans. The cocoa plant is highly susceptible to pest attacks, and a large proportion of the crop is lost to diseases and pests each year. Over the years, the volatility in global cocoa bean prices has been one of the major factors that led to the greater adoption of cocoa butter substitutes in the chocolate industry. However, a sharp decrease in demand for chocolate products is observed due to the implementation of lockdown strategies. Reduced demand for chocolate products has led to a decline in production and thereby the demand for key raw materials, including cocoa substitute products, driving down their prices.

Market Dynamics

The global cocoa butter alternatives market has witnessed a significant growth rate over the last few years and is projected to register a 6.91% CAGR during the forecast period. The market growth can be attributed to the declining production of cocoa beans in Africa. So, chocolate manufacturers are opting for alternative products, which accelerate the growth of the global cocoa butter alternatives market. However, stringent regulations in several countries are expected to hinder the growth of the global cocoa butter alternatives market during the forecast period.

Drivers:

• Potential Demand Of Chocolate From Various Industries

The global consumption and demand for chocolate are growing steadily. The demand for chocolates for the bakery and confectionery-based applications seems never-ending. Increasing disposable income backed up by developing economies in countries such as India, China, and Brazil are anticipated to add fuel to the demand for chocolates. However, to satiate consumers' needs and overcome the current low availability of cocoa to produce cocoa butter, the cocoa butter alternatives have high demand. Chocolate has high application in a wide range of sectors, including bakery, confectionery, personal care products, desserts, seasoning, and others. Manufacturing of cocoa butter alternatives provides high scope for the product in all these sectors, affirming high CAGR during the forecast period.

Restraint:

• Regulatory Framework

Coconut oil or palm oil, generally used as cocoa butter alternatives, contain lauric fatty acids. Stringent labeling and usage regulations are set by certain countries to set a limit on the consumption of cocoa butter alternatives. For instance, in the US, for products to be categorized like chocolate, the exclusive use of cocoa butter as the fat source is mandatory. Furthermore, if cocoa butter alternatives are used in the products, then the product's name must be changed and cannot be called chocolate. Additionally, regulations set by the European Chocolate Directive 2000/36/EC allow 5% replacement of cocoa butter for the product to be categories as chocolate. These stringent regulations followed by the regions tend to restrain the growth of the cocoa butter alternatives market on a global platform.

Opportunities:

• Increasing Research & Development

Declining cocoa butter production has created immense opportunities for the manufacturers to develop potential cocoa butter alternatives and generate revenue through their product offerings. Oils and fats manufacturers are investing heavily in the R&D sector to develop novel products and introduce their product line in the global market. Extensive research is carried out on plant-based as well as animal-based oils as alternatives to cocoa butter. For instance, Malaysian researchers studied mango seed fat and palm stearin as cocoa butter alternatives which could be used in chocolates for tropical countries as they can withstand high temperatures. The rapid adoption of veganism across the globe results in high demand for plant-based chocolate, which is a key opportunity for players in this market.

R&D investments can also help in bringing efficient and large-scale extraction of cocoa butter alternatives. Additionally, to overcome some of the major restraints of cocoa butter alternatives, including a tendency to bloom and rheological stability, a keen focus on research should be carried out on a global level.

Challenge:

• Rheological Stability

One of the major challenges of using cocoa butter alternatives is the change in rheological property based on their usage. Cocoa butter melts at a temperature of about 34-degree Celsius. The melting point of cocoa butter at this temperature gives a creamy mouthfeel and tends to help in releasing optimal flavor. However, cocoa butter alternatives with varying melting points hinder the actual organoleptic property. Furthermore, in the case of cocoa butter equivalents, careful and proportionate mixing of the fats with cocoa butter is required to attain similar physical property. Also, using lauric fats as cocoa butter alternative has its disadvantages. The fat undergoes fat hydrolysis when exposed to moisture and lipase enzyme and liberated lauric acid. Lauric acid further imparts a distinct soapy flavor to the product, which is undesirable. Also, they have relatively low milk fat tolerance. These risks tend to confine the growth of cocoa butter alternatives in the global market.

Segment Overview

By Type

Based on type, the global Cocoa Butter Alternatives market has been segmented into cocoa butter equivalents, cocoa butter replacers, and cocoa butter substitutes. The cocoa butter equivalents segment accounted for the largest market share in 2020 and it is expected to record the highest CAGR of 7.14% during the forecast period.

By Source

Based on Source, the global Cocoa Butter Alternatives market has been segmented into Shea, Sal, Kokum & Mango Kernel, and Illipe & Palm Kernel Stearin. In terms of value, the Shea segment accounted for the largest market share in 2020 and is projected to register the highest CAGR of 7.30% during the forecast period.

By Application

Based on Application, the global Cocoa Butter Alternatives market has been segmented into Bakery & Confectionery, Dairy & Frozen Desserts, Sweet & Savory Snacks, and Dips, Sauces, & Dressings. The Bakery & Confectionery segment accounted for a larger market share of 65.55% in 2020, whereas the dairy & frozen desserts segment is expected to record the highest CAGR of 7.23% during the forecast period.

Global Cocoa Butter Alternatives Market Share, by Region, 2020 (%)Sources: MRFR Analysis

Regional Analysis

By region, the global Cocoa Butter Alternatives market has been divided into North America, Europe, Asia-Pacific, and the Rest of the World. North America accounted for the largest market share of 40.99% in 2020. Asia-Pacific was the second-largest market in 2020 and is projected to exhibit the highest CAGR of 7.25 % during the review period. The market in Europe is expected to register a CAGR of 6.30% during the forecast period.

North America

North America accounted for the largest market share of 40.99% of the global cocoa butter alternatives market in 2020 and is projected to expand at a 7.00% CAGR during the forecast period. North America dominated the global cocoa butter alternatives market in 2020 and is expected to maintain its dominance throughout the forecast period. The region accounted for a revenue share of 40.99% in 2020 and is expected to garner a revenue of USD 648.70 million by the end of 2028. Growth of application industries such as food & beverages and personal care is a prominent determinant driving the market growth of the North America cocoa butter alternatives market. Surging demand for chocolate and baked products is boosting the sales of cocoa butter alternatives as they are cheaper and abundantly available. Decline in the production of cocoa beans, resulting in the supply decline of cocoa butter, is propelling the market players in North America to opt for various cocoa butter alternatives such as shea butter, palm oil, coconut oil, and others.

Asia-Pacific

The Asia-Pacific accounted for the second-largest market share of 28.82% of the Cocoa Butter Alternatives market in 2020. The regional market is expected to register a CAGR of 7.25% during the forecast period. The APAC market encompasses several developing and developed economies, such as Australia, India, Japan, China, and South Korea. Expansion of numerous food & beverages and personal manufacturers in the region is expected to boost the sales of the regional market. China, Japan, and India are the major country-level markets contributing to the growth of the regional market. In 2020, these countries accounted for a cumulative market share of 76.81% of the Asia-Pacific cocoa butter alternatives market. Surging prices of cocoa butter is favoring the demand of cocoa butter alternatives in Asia-Pacific. Additionally, lenient regulatory framework regarding the use of cocoa butter alternatives in the application industries is also catalyzing the growth of the regional market.   

Competitive Landscape

The market comprises tier-1, tier-2, and local players. The tier-1 and tier-2 players have a global reach and diverse product portfolios. Companies such as Nisshin OilliO Group, Ltd. (Japan), Fuji Oil Holdings, Inc. (Japan), Cargill, Incorporated (US), AAK AB (Sweden), and The Mewah Group (Singapore) dominate the global market due to brand reputation, product differentiation, financial stability, and diversified regional presence.

Prominent players in the global Cocoa Butter Alternatives market include Nisshin OilliO Group, Ltd. (Japan), Fuji Oil Holdings, Inc. (Japan), Cargill, Incorporated (US), Bunge Ltd. (US), Wilmar International Ltd. (Singapore), AAK AB (Sweden), 3F INDUSTRIES LIMITED(India), Felda IFFCO Sdn. Bhd. (Malaysia), Musim Mas (Singapore), and The Mewah Group (Singapore).

Recent Developments

Few developments that occurred in recent times influencing the market growth of Cocoa Butter Alternatives are listed below:

• In December 2020, Bunge Loders Croklaan announced the launch of Karibon, the first shea-only premium Cocoa Butter Equivalent (CBE) exceeding industry standards. This plant-based, nutritionally balanced, and sustainably sourced ingredient is expected to meet consumer demand for more conscious and sustainable food options that do not compromise on the taste and quality.


• In November 2020, AAK AB announced the launch of Illexao, a range of fats suitable for making a "super compound" that can replace up to 100 percent of the free cocoa butter in a chocolate recipe.

Scope of the Report

Global Cocoa Butter Alternatives Market, by Type

• Cocoa butter equivalents


• Cocoa butter replacers


• Cocoa butter substitutes

Global Cocoa Butter Alternatives Market, by Source

• Shea


• Sal, Kokum & Mango Kernel


• Illipe & Palm Kernel Stearin

Global Cocoa Butter Alternatives Market, by Application

• Bakery & Confectionery


• Dairy & Frozen Desserts


• Sweet & Savory Snacks


• Dips, Sauces, & Dressings

Global Cocoa Butter Alternatives Market, by Region

• 
  North America
  
  
  
  • US
  
  
  • Canada
  
  
  • Mexico
  
  
  
  


• 
  Europe
  
  
  
  • UK
  
  
  • Germany
  
  
  • France
  
  
  • Spain
  
  
  • Italy
  
  
  • Russia
  
  
  • Rest of Europe
  
  
  
  


• 
  Asia-Pacific
  
  
  
  • China
  
  
  • India
  
  
  • Japan
  
  
  • Malaysia
  
  
  • Rest of Asia-Pacific
  
  
  
  


• 
  Rest of the World
  
  
  
  • South America
  
  
  • Middle East
  
  
  • Africa
  
  
  
  

Intended Audience

• Food and Beverage


• Cosmetic and Personal Care


• Retailers, Wholesalers, and Distributors


• Investors and Trade Experts