Thechocolate industry is primarily made up of a small number ofcocoa processors andchocolate manufacturers.
WorthUS$105 billion in 2012, the chocolate industry makes up a slight majority of the globalconfectionery market, despite serving fewer, wealthier markets. Brands are segregated by territory, and evoke strong consumer loyalties. Chocolate is primarily purchasedon impulse, but also as a gift, and, in the case ofdark chocolate, sometimes for perceived health benefits.
The chocolate industry emerged in the 19th century, as technological developments allowed production to industrialize. It spread across the world in the 20th century.
As of the start of the 19th century, chocolate making was the domain of small producers.[1] As chocolate making technology advanced, chocolate was able to be produced at scale,[2] and in the 1850s, Western chocolate makers gained prominence for the first time.[1] Across the 19th century, further developments in technology created chocolate as it is eaten today. In 1875, the first milk chocolate bar was sold in Switzerland, and Cadbury followed with a coarse-textured milk chocolate bar 20 years later.[2]
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At the beginning of the 20th century, a chocolate market began to develop in the UK, US, and former Britishdominions as several products still eaten today were created, includingCadbury Dairy Milk in the UK in 1905 andHershey's Kisses in America in 1907.[2] Manufacturers in the US at this time and for decades after struggled with the lack of air conditioning technology. In the summers of 1920s Connecticut,one manufacturer only made their chocolate confectionery at night, and sold the rest door-to-door in the early morning.[3] Chocolate was introduced to new populations inWorld War II, through the activity of the British and US armies.[2]
In the post-war period, consumption in developed countries grew as incomes rose and a larger range of foods were eaten. Chocolate was increasingly exported across the globe.[2] Over 20 years at the end of the 20th century, cocoa processors consolidated through corporate acquisitions, shrinking from most processing being undertaken by 40 companies to three:Barry Callebaut,Cargill andOlam.[4] As of 1994, an estimated 15–20% of chocolate was eaten by itself. The rest was eaten in other products: coating ice creams, biscuits and interiors such as nuts.[5] Since the creation ofGreen & Black's that year,Fair trade cocoa has grown among a broader trend of promoting better working conditions for cocoa producers.[6] When the European dispute ended over including fats in chocolate,Robert Linxe wrote that industrial chocolate manufacturers already included fats, but concealed the fact.[7]
As of 2015, about 60% of cocoa processing was undertaken by Barry Callebaut, Cargill and Olam. During the 2000s, these firms moved processing to cocoa producing countries, citing motives of reducing poverty in these areas. Global studies scholar Kristy Leissle has argued that instead this is done to reduce tax obligations.[8]
Although the chocolate industry is made up of companies in a range of sizes, including small, artisan businesses, most of the world's chocolate market is dominated by a few, large companies.[10] In 2015, five firms:Mars Inc.,Mondelēz International (owners ofCadbury),Ferrero,Nestlé andThe Hershey Company held 61.8% of the chocolate market share. Other chocolate companies with the largest revenue includedMeiji Co.,Lindt,Arcor,Glico andStorck.[9][a] Chocolate is more concentrated than the broader confectionery industry, as the latter markets a broad range of products, and in poorer markets sells through informal means (such as street markets in India). Concentration has increased in the 21st century, as firms attempt to reduce the buying power of food retailers and to establish markets in new countries.[11]
Beyond production, these firms allocate large funds toresearch and development.[11] The chocolate industry uses sugar, milk and cocoa products as inputs, as well as large amounts of inclusions, such as nuts, dried fruits and coconut to add variety in texture and taste.[6]
The US is the biggest producer of chocolate. Other large producers include Brazil, Germany, Russia and the UK.[12]
As of 2012, the global chocolate market was valued at around US$105 billion, making up a little over half of the overall confectionery market.[6] During the 2010s, growth was most pronounced in developing countries, but consumption remains low in poor regions where sugar confectionery is more affordable, and in warmer climes where chocolate melts at ambient temperatures.[10] As of 2012, the US consumed the most chocolate, followed by Russia. In South America, Brazil consumed the most chocolate by a large margin, while in Western Europe, which consumes the most chocolate per capita, Germany and the UK had the largest consumer markets.[13]
In Europe, the main chocolate brands are around 95 years old, unusually old for the food and drink industry.[14] The long history of several major chocolate brands, such asKit Kat, created in the 1930s, and Cadbury Dairy Milk, created in the early 20th century, has generated strong brand loyalty, and a small market forprivate label chocolates. As such, manufacturers generally introduce new products as additions to existing lines.[15]
What firm's chocolate is eaten depends on the region: as of 2009, Cadbury had a strong presence in the UK, Australia, Ireland and New Zealand, andKraft was particularly present in Brazil, and, through itsMilka brand, continental Europe.[11]
By 2018, the American consumer market for chocolate, and snacks more generally, had split into two market segments: those primarily motivated by the experience of consumption (e.g. taste, texture), and those who looked for non-consumption attributes such ascraft production and ethics such aslocalism andenvironmentalism.[16]
Worldwide, chocolate's strong market penetration can be credited to its reputation as an affordable indulgence. It is primarily purchased on impulse, as a snack. This popularity is illustrated in a 2014Nielsen market research survey of 30,000 consumers worldwide, which found chocolate the most popular snack (higher than fresh fruit). The study found chocolate as a snack marginally more popular among women.[17]
More intentionally, chocolate is purchased as a gift to convey love, remorse among a range of other emotions. This is concentrated around seasons, particularly Easter, but also Christmas, Valentine's Day and Halloween, which can account for large portions of the total chocolate consumed per year. For instance, in Brazil, Easter eggs account for 20% of yearly chocolate intake, and in the UK, almost 70% of boxed chocolate is consumed during theChristmas and holiday season.[18]
Perceptions of health benefits around dark chocolate consumption have driven an increase in consumption, albeit at the expense of milk chocolate consumption.[19]
The chocolate industry has been criticized bypublic health advocates, for the role of sugar on obesity rates. This criticism has been most pronounced in markets like the US and UK.[10]
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