Cocoa Nibs Market

The global cocoa nibs market is expected to register a notable growth rate during the forecast period. The rising consumption of cocoa nibs in various applications and the health benefits associated with cocoa are the major factors driving market growth. The increasing demand for cocoa nibs in emerging economies is expected to create new opportunities for the vendors active in the global market. However, the fluctuating raw material prices are restricting the growth of the market. Moreover, stringent regulations, especially in Europe, pose challenges for the market players.

The increasing spending capacity of consumers in developing countries in Asia-Pacific and Africa has led to a rise in demand for convenience, ready-to-eat, bakery, and dairy food products. Globalization and urbanization have contributed to changing food preferences. The growing demand for bakery and dairy products in emerging economies is expected to result in a demand for toppings and food decoration such as cocoa nibs in the coming years. Asia-Pacific is an attractive market for any industry owing to the rapid economic growth and population size. Urbanization and increasing per capita disposable incomes are driving the growth of the cocoa nibs market in developing countries in the region. Owing to the large population base and increasing adoption of Western trends, emerging economies in Asia-Pacific represent a potential market for cocoa nibs. The demand for cocoa nibs in different variants is rising among the youth, who also frequent the increasing number of cafés and beverage outlets. Thus, market players can avail of the opportunities in emerging economies by expanding their presence through product launches and marketing campaigns.

Cocoa is the key raw material required for the production of cocoa nibs. Cocoa beans are one of the most highly traded commodities in the world and the prices of the same are volatile. The consumption of cocoa is rising rapidly in cocoa-producing and non-producing countries. However, there are growing concerns regarding the lack of supply for the increasing demand. The price of cocoa affects the production cost and retail price of cocoa nibs. The price of cocoa beans has been fluctuating over the past five years. Average cocoa prices have increased for two consecutive years from USD 2.44 per kg in 2013 to USD 3.14 per kg in 2015. However, since 2015, the prices have declined with a sharp reduction of 30% in 2017 over 2016. The price of cocoa beans is volatile as production is greatly affected by weather conditions and most growers are concentrated in certain regions of the world. Moreover, there are numerous cocoa suppliers in the market, which adds to the volatility and affects the production of cocoa products, including cocoa nibs. The fluctuating raw material prices have led to the increased cost of production, thereby affecting profit margins and creating an environment of uncertainty for the manufacturers of cocoa nibs. This is expected to restrain the growth of the market to an extent during the forecast period.

Cocoa is a widely traded commodity globally with trade and quality highly regulated, especially in Europe. The Regulation (EC) No. 2006/1881, which came into effect on 1 January 2019, lays down the maximum permissible levels of cadmium in certain foods. The regulation is applicable to cocoa beans growers and cocoa product manufacturers.

Cadmium enters cocoa beans through the soil, pesticides, and chemical fertilizers. Growers in Latin America are most affected by this regulation as the soil in the region is high in cadmium due to volcanic activity. This restricts the trade of cocoa from Latin America to Europe, thereby creating hurdles in the supply of raw materials to cocoa nibs producers.