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Hot Chocolate Products Market Size, Share, & Trends Analysis Report (2023 – 2030)
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Report Overview
The global hot chocolate products market was valued at USD 17.5 billion in 2022 and is projected to expand at a CAGR of 5.2% from 2023 to 2030. Hot chocolate is a popular beverage choice among consumers, especially during the winter season. The growing popularity of hot chocolate products can be attributed to the launch of a variety of flavors, such as mint and caramel, which are added to the traditional chocolate flavor. Furthermore, the rise in the consumption of hot chocolate as a result of the increasing trend of café culture is expected to drive the market growth over the forecast period.
Manufacturers are introducing new and unique flavors to attract customers and increase their market share. For instance, in April 2021, Nestlé launched two new flavors of hot chocolate — mint and caramel — with its Nesquik brand. The company claimed that the new flavors offer a unique taste experience, which is expected to drive the sales of hot chocolate products.
The increasing demand for convenience products is another key factor driving the growth of the hot chocolate products market. Manufacturers are introducing innovative packaging designs, such as single-serve packets, to make the product more convenient and portable. For instance, in May 2021, Swiss Miss launched a new line of hot cocoa mixes with resealable packaging, designed to keep the cocoa mix fresh and flavorful.
The increasing number of health-conscious consumers is also driving the market growth. Manufacturers are introducing organic and natural hot chocolate products fortified with additional health benefits. For instance, in October 2021, Cadbury launched a new organic hot chocolate mix, which is made with natural cocoa and is free from artificial flavors and preservatives.
Furthermore, the rising trend of customization is driving the demand for hot chocolate products. Customers are opting for personalized products that are tailored to their individual preferences. For instance, in August 2021, Swiss Miss launched a new line of customizable hot chocolate mixes, allowing customers to choose from a variety of ingredients, such as marshmallows, sprinkles, and chocolate chips, to customize their own hot chocolate mix.
Product Insights
The hot chocolate mix segment held the largest market share in 2020 due to increasing demand for convenience and the availability of various flavors of hot chocolate mix. According to an article published by The Guardian, in January 2020, sales of hot chocolate mix have increased by 60% over the past five years. This increase can be attributed to the fact that hot chocolate mixes are easy to prepare and can be customized with flavors such as mint and marshmallow. In addition, the growing popularity of hot chocolate mix among children is also driving the growth of the market.
The hot chocolate syrup segment is expected to witness the highest CAGR over the forecast period. Increasing availability of hot chocolate syrup in different flavors such as hazelnut, mocha, and vanilla is driving the demand for hot chocolate syrup. In addition, the growing popularity of hot chocolate syrup among millennials is another factor driving the growth of the market. According to an article published by Fruugo, in January 2020, sales of hot chocolate syrup have been steadily increasing over the past five years, with a significant increase in the year 2020.
Distribution Channel Insights
The supermarkets and hypermarkets segment accounted for the largest share of the hot chocolate products market in 2022. The growth of the segment can be attributed to consumer preference for supermarkets and hypermarkets as the primary source for purchasing food and beverage products. Moreover, the availability of a wide range of hot chocolate products in supermarkets and hypermarkets makes them a preferred choice for shoppers. Furthermore, due to the presence of discount retailers in supermarkets and hypermarkets, shoppers are more likely to buy products at discounted prices.
The online segment is expected to witness the highest CAGR of 11.3% over the forecast period. With the increasing penetration of the internet, consumers are increasingly opting for online shopping for food and beverage products. Moreover, the ease of product comparison and discounted prices offered by online retailers are some of the major factors driving the growth of the online distribution channel segment. Furthermore, the presence of various e-commerce websites and mobile applications such as Amazon, Flipkart, and others are further driving the growth of the segment.
Type Insights
The instant hot chocolate segment accounted for the largest revenue share of 68.2% in the year 2022. This is attributed to the rise in convenience culture and increase in the demand for quick and easy snacks among the working class. Also, the increasing demand for instant hot chocolate powder among the young population due to its availability in numerous flavors has further driven the segment growth. For instance, in June 2022, Nestle launched limited edition Nesquik Bunny-Shaped Hot Chocolate, which added to the segment growth.
The traditional hot chocolate segment is expected to expand at the highest CAGR of 8.2% over the forecast period. This is attributed to the increasing demand for hot chocolate from specialty cafes and restaurants. Increasing consumer spending on specialty drinks, such as hot chocolate drinks, is further driving the segment growth. For instance, in May 2022, Starbucks launched a new hot chocolate drink, the Salted Cream Cold Foam Cold Brew. This new drink includes a salted cream cold foam, made with sweet cream and sea salt, which is poured over Starbucks Cold Brew and topped with a mocha- and cocoa-flavored drizzle.
Regional Insights
Europe accounted for the largest share of the market in 2021, followed by North America and Asia Pacific. The presence of leading market players in countries such as Germany, the UK, and France is driving the market in the region. For instance, in April 2021, the European Council approved an amendment to the European Union (EU) legislation, allowing the import of cocoa beans from the Democratic Republic of Congo (DRC), which is helping the chocolate industry in Europe.
North America is expected to witness the fastest growth in the coming years. Increasing disposable income, coupled with the presence of leading players such as Mars, Nestlé, and Ghirardelli, are the key factors driving the market growth in the region. For instance, in March 2021, Ghirardelli launched a premium hot chocolate mix, which is made with real cocoa and is rich in flavor.
Asia Pacific is expected to witness a steady growth over the forecast period. Growing awareness among consumers and increasing disposable income are the key factors driving the growth of the market. For instance, in April 2021, a company based in India launched a premium hot chocolate powder, which is made with real cocoa and is rich in flavor.
Financial Projections
In this part of the hot chocolate products business plan we will provide a detailed breakdown of all income and expense categories of the business. These forecasts include cash flow projections and capital requirements for your hot chocolate products business. Usually, these projections are drafted for a 5-year period.
Revenue Assumptions
The main source of revenues for a hot chocolate products business comes from direct sales, wholesale distribution, online sales, and retail stores. Here you will find a list with a description of each of them and other possible sources of profit such as fundraising, food & beverage, the sale of merchandise, and licensing.
Projecting Expenses
In this section, all the regular expenses related to keeping the hot chocolate products business running will be described. The list of operating expenses includes equipment and supplies, wages, utilities, insurance policies, advertising, website hosting and maintenance, taxes, and others.
Key companies & market share insights
Some of the key companies operating in the hot chocolate products market are increasingly focusing on product launches and expansion of the distribution channel to gain prominent visibility among consumers. Some of the initiatives are:
– In June 2022, Nestle launched a new hot chocolate drink, the Nestle Hot Chocolatey.
– In July 2022, Hershey launched Hershey’s S’mores Hot Cocoa, which is a combination of marshmallows and hot cocoa.
– In October 2022, Mars Incorporated launched Cocoapro, a hot cocoa mix with real cocoa and natural ingredients.
Some of the prominent players in the hot chocolate products market include:
– Nestle SA
– Hershey
– Mars Incorporated
– Ghirardelli Chocolate Company
– The J.M. Smucker Company
– Mondelez International, Inc.
– Kraft Foods Group, Inc.
– Cargill, Inc.
– Lindt & Sprüngli AG
– The Hershey Company
Global Hot Chocolate Market Segmentation
This report forecasts growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2017 to 2030. For this study, Grand View Research has segmented the global hot chocolate products market based on product, distribution channel, type, and region:
1. Product Outlook (Revenue, USD Million, 2017 – 2030)
– Hot Chocolate Mix
– Chocolate Syrup
– Chocolate Bars
– Chocolate Powders
– Others
2. Distribution Channel Outlook (Revenue, USD Million, 2017 – 2030)
– Supermarkets & Hypermarkets
– Online
– Specialty Stores
– Others
3. Type Outlook (Revenue, USD Million, 2017 – 2030)
– Regular
– Organic
– Flavoured
4. Regional Outlook (Revenue, USD Million, 2017 – 2030)
– North America
– Europe
– Asia Pacific
– Central & South America
– Middle East & Africa
Frequently Asked Questions
[Q]: What are the key drivers of the Global Hot Chocolate Products Market?
[A]: Increasing popularity of hot chocolate-based drinks, rising demand for premium hot chocolate-based products, and innovative product launches are driving the demand for hot chocolate products. Additionally, growing demand for convenience and premiumization, increasing health consciousness among consumers, and rising disposable income are also expected to fuel market growth.
[Q]: What are the key trends in the Global Hot Chocolate Products Market?
[A]: Some of the key trends in the hot chocolate products market include the introduction of new flavors, packaging innovations, and the growing use of social media for marketing. Additionally, manufacturers are also focusing on product customization to meet customer needs and preferences.
[Q]: Who are the major players in the Global Hot Chocolate Products Market?
[A]: Major players in the hot chocolate products market include Nestle SA, Mondelez International, Inc., Unilever Group, The Hershey Company, Mars Inc., Lindt & Sprungli AG, Ghirardelli Chocolate Company, and Ghirardelli Chocolate Company.
[Q]: What are the key opportunities in the Global Hot Chocolate Products Market?
[A]: The hot chocolate products market is expected to benefit from the rising demand for organic and vegan hot chocolate products, expanding e-commerce channels, and the growing popularity of health-based beverages.
[Q]: What are the key challenges in the Global Hot Chocolate Products Market?
[A]: Some of the key challenges in the hot chocolate products market include the high cost of ingredients, fluctuating raw material prices, and supply chain disruptions due to the COVID-19 pandemic. Additionally, the threat of substitutes and the need for product differentiation are also expected to affect market growth.
Research Methodology
Impact Analytix employs a comprehensive and iterative research methodology focused on minimizing deviance in order to provide the most accurate estimates and forecasts possible. The company utilizes a combination of bottom-up and top-down approaches for segmenting and estimating quantitative aspects of the market. In Addition, a recurring theme prevalent across all our research reports is data triangulation which looks market from three different perspectives. Critical elements of the methodology employed for all our studies include:
Preliminary data mining
Raw market data is obtained and collated on a broad front. Data is continuously filtered to ensure that only validated and authenticated sources are considered. In addition, data is also mined from a host of reports in our repository, as well as a number of reputed paid databases. For a comprehensive understanding of the market, it is essential to understand the complete value chain and in order to facilitate this; we collect data from raw material suppliers, distributors as well as buyers.
Technical issues and trends are obtained from surveys, technical symposia, and trade journals. Technical data is also gathered from an intellectual property perspective, focusing on white space and freedom of movement. Industry dynamics with respect to drivers, restraints, and pricing trends are also gathered. As a result, the material developed contains a wide range of original data that is then further cross-validated and authenticated with published sources.
Statistical model
Our market estimates and forecasts are derived through simulation models. A unique model is created and customized for each study. Gathered information for market dynamics, technology landscape, application development, and pricing trends are fed into the model and analyzed simultaneously. These factors are studied on a comparative basis, and their impact over the forecast period is quantified with the help of correlation, regression, and time series analysis. Market forecasting is performed via a combination of economic tools, technological analysis, industry experience, and domain expertise.
Econometric models are generally used for short-term forecasting, while technological market models are used for long-term forecasting. These are based on an amalgamation of the technology landscape, regulatory frameworks, economic outlook, and business principles. A bottom-up approach to market estimation is preferred, with key regional markets analyzed as separate entities and integration of data to obtain global estimates. This is critical for a deep understanding of the industry as well as ensuring minimal errors. Some of the parameters considered for forecasting include:
Market drivers and restraints, along with their current and expected impact
Raw material scenario and supply v/s price trends
Regulatory scenario and expected developments
Current capacity and expected capacity additions up to 2030
We assign weights to these parameters and quantify their market impact using weighted average analysis, to derive an expected market growth rate.
Primary validation
This is the final step in estimating and forecasting our reports. Exhaustive primary interviews are conducted, face to face as well as over the phone to validate our findings and assumptions used to obtain them. Interviewees are approached from leading companies across the value chain including suppliers, technology providers, domain experts, and buyers so as to ensure a holistic and unbiased picture of the market. These interviews are conducted across the globe, with language barriers overcome with the aid of local staff and interpreters. Primary interviews not only help in data validation but also provide critical insights into the market, current business scenario, and future expectations and enhance the quality of our reports. All our estimates and forecast are verified through exhaustive primary research with Key Industry Participants (KIPs) which typically include:
Market-leading companies
Raw material suppliers
Product distributors
Buyers
The key objectives of primary research are as follows:
To validate our data in terms of accuracy and acceptability
To gain an insight into the current market and future expectations
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