Hot Chocolate Market Snapshot
“The Hot Chocolate Market to grow from USD 3824.23 Million in 2023 to USD 5824.23 Million by 2030, at a CAGR of 5.2%.”
Hot chocolate, also known as drinking chocolate or hot cocoa, is a heated beverage made with milk, melted or sliced chocolate, cocoa powder, and sugar. It is often topped with marshmallows or whipped cream, and is a thicker and less sweet alternative to hot chocolate produced with melted chocolate.
Around 2,500-3,000 years ago, the Maya invented the first chocolate drink, while the Aztecs made cocoa drinks called xocōlātl by 1400 AD. After being brought to Europe, hot chocolate gained popularity and was used medicinally to treat stomach and liver disorders until the 19th century.
Today, hot chocolate is enjoyed in various ways, including spiced chocolate para mesa from Latin America, thick cioccolata calda from Italy and Spain, and thinner hot chocolate in the US.
Hot chocolate is a popular beverage on e-commerce platforms due to its energy, thirst-quenching properties, and calming effect on the mind. Online shoppers find it calming and enjoy it as it calms the senses. As a result, many retailers incorporate hot chocolate into their product offerings, leading to increased popularity and the search for new drink varieties.
The market for ready-to-drink hot chocolate is experiencing growth due to increasing consumer interest in organic and healthy ingredients and the increasing demand for ready-to-drink products made from milk, hot water, or cream.
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Hot chocolate, also known as drinking chocolate or cocoa, is a global comfort meal enjoyed by people worldwide. European hot chocolate is richer and thicker, while the thinner instant type is more popular in the US. In Nigeria, hot chocolate is called "tea" due to the custom of referring to morning beverages as tea. Regional variations include toppings like cheese, whipped cream, and marshmallows.
COVID-19 Impact on Hot Chocolate Market
The COVID-19 pandemic has negatively impacted the chocolate industry, leading to decreased sales and supply-side issues with certification and quality.
The Fine Cacao and Chocolate Institute (FCCI) found that the lockdown in the Dominican Republic prevented farmers and laborers from visiting plantations for several weeks, resulting in a decline in luxury chocolate consumption and an increase in specialty stores that remain closed due to disruptions in the raw material supply chain and shutdown.
Segment by distribution channel
In 2022, the offline distribution channel accounted for 90% of the hot chocolate market, with high product visibility in supermarkets, hypermarkets, and convenience stores. The growing number of retailers in countries like Brazil, China, and India is expected to positively impact market growth. Walmart operates 21 stores in India and plans to open over 50 more by 2023.
The online distribution channel is expected to grow at a 7.5% CAGR from 2023 to 2030.
Consumers are becoming more health-conscious, seeking natural ingredients like cocoa for better heart health, lower blood pressure, and a lower risk of diabetes. Producers are developing organic, non-GMO, and fair-trade certified hot chocolate products.
Plant-based hot chocolate products, like almond and coconut milk, are also gaining popularity among vegan and dairy-free consumers.
The global demand for tea and coffee is expected to increase due to their natural content and therapeutic properties, leading to the expansion of the hot drink market. This growth is expected to be fueled by increased consumption in households, offices, and cafés.
The drinking chocolate industry is driven by the growing demand for diverse ethnic flavors and tastes, driven by health-conscious consumers, particularly in emerging nations. The shift towards healthier products and the growth of organized retail in these regions have further accelerated the growth of the market.
The pandemic's supply chain disruptions, strict government quality standardization regulations, and easy product replacements may limit the chocolate drinking industry's expansion potential. Rising research and development expenses and unpredictable raw material costs may also hinder market growth. Factors such as rising blood sugar levels, diabetes, and obesity also hinder market expansion.
E-commerce in the drinking chocolate market is gaining popularity due to its convenience and variety of chocolate tastes. The market expansion in Europe is facilitated by the growing use of drinking chocolate in various beverages and confections, such as cakes, drinking shakes, croissants, and hot chocolate.
Competitive Landscape of the Hot Chocolate Market Analysis
New Developments in Hot Chocolate Market
22 March 2023 DSM launches new PARSOL® DHHB UVA filter to broaden portfolio and further enable eco-friendly formulations
Royal DSM, a global purpose-led science-based company, today announces the launch of PARSOL® DHHB (INCI: Diethylamino hydroxybenzoyl hexyl benzoate), an efficient UVA filter that also contributes SPF protection. It is compatible with all UVB filters on the market, and is compatible with zinc oxide and iron oxides, which makes it fit for purpose in hybrid formulations.
UV light exposure is thought to be responsible for 80% of visible signs of facial skin ageing; within UV light, UVA rays can penetrate the skin more deeply than UVB and cause skin cells to age prematurely.
Scientific evidence shows that UVA filters can protect from UVA rays induced skin aging, for example to prevent the formation of fine lines, wrinkles and dark spots (hyperpigmentation); hence there are very convincing arguments for making UVA protection an important part of daily facial care.
On January 3, 2023, Mondelez International launched ‘Spectacularly nice’ promotion across its Cadbury Hot Chocolate range. The promotion is available for three months starting in mid-January on 500g of Cadbury Drinking Chocolate, 400g of Instant Hot Chocolate, and 220g of Highlights Milk Chocolate.
On October 20, 2021, Lindt launched “Hot Chocolate powder”, billed as a “velvety smooth and luxuriously creamy hot chocolate drink”.
On September 15, 2022, Bevzilla launched a premium hot chocolate range sweetened with date palm jaggery. Bevzilla's Hot Chocolate Mix Range combines mild flavors of chocolate, hazelnut, and cinnamon with the sweetness of date palm jaggery so that consumers don't need to add any refined sugar to enjoy the true goodness of chocolate with perfect consistency & the smoothest aroma.
Regional Analysis of Global Hot Chocolate Industry
The Asia-Pacific region dominates the drinking chocolate market due to its significant chocolate consumption, rising consumption of chocolate-covered pita chips and waffles, Western culture adoption, supplanting traditional foods like bread and toast, growing population, and lifestyle changes, which are expected to continue for the forecast period.
North America's chocolate market is projected to grow at a 2.89% CAGR from 2022 to 2030, worth USD 956.5 million. Despite a decline in demand due to rising chronic conditions like diabetes and cardiovascular disease, new research suggests that chocolate consumption can lower cardiovascular risks due to its flavonoids, thereby increasing demand for hot chocolate in the region.
Segments Covered in the Hot Chocolate Market Report
Hot Chocolate Market Segment by Type
Hot Chocolate Market by End User
Hot Chocolate Market by Distribution Channel
Hot Chocolate Market by Region
Frequently Asked Questions
What does Hot Chocolate do?
Studies show that hot chocolate, a sugary beverage, can aid in weight loss by modulating energy expenditure, reducing inflammation and hunger, boosting fat oxidation, and deceiving the stomach into thinking it's full, despite its seemingly paradoxical nature.
What is the expected growth rate of the Hot Chocolate market over the next 7 years?
The Hot Chocolate Market to grow from USD 3824.23 Million in 2023 to USD 5824.23 Million by 2030, at a CAGR of 5.2%.
Who are the major players in the Hot Chocolate market and what is their market share?
Barry Callebaut (Switzerland), The Hershey Company (U.S), Nestle SA (Switzerland), Ingredion (U.S), Mars, Incorporated (U.S), DSM (Netherlands), Kerry Group plc (Ireland), Tate & Lyle (U.K), Godiva (U.S), LUIGI LAVAZZA SPA, (Italy), Starbucks Coffee Company (U.S), PepsiCo (US), Mondelez International (U.S), The Simply Good Foods Company (U.S), are prominent players operating and dominating in the market.
Which geographical areas dominate the worldwide market for Hot Chocolate?
Asia Pacific region are emerging as the top regional markets for Hot Chocolate.