The cocoa market between 2020 and 2025 is best defined by dramatic price surges and extreme volatility, driven by supply shocks and adverse weather, pests, and diseases. Such unprecedented changes have pushed some parts of the industry to turn to other ingredients.
A recent Vesper cocoa analysis noted that the market has “effectively transformed into one where weather updates carry more price impact than quarterly earnings reports.”
The same analysis described a “critical inflection point where weak demand has been fully priced in, but supply disruptions have not,” leading to a “dangerous asymmetry” that explains why futures can increase 10% in a single session on weather reports from West Africa.
With weather unpredictability in the main cocoa growing regions - Ivory Coast and Ghana - buyers are exploring alternatives such as carob powder as part of supply chain and procurement strategy alterations to avoid too much dependency on cocoa. Carob powder can be used as a cocoa substitute in desserts and baked goods.
Other cocoa alternatives
Other alternatives being explored include cereal and pulse ingredients, like oats, barley, fava beans, and sunflower seeds, which can be transformed through fermentation. Meanwhile, CBEs (Cocoa Butter Equivalents) like shea butter or palm-based fats can replace a limited, legally capped share of cocoa butter in chocolate recipes, with the view to managing costs and supply constraints.
Similarly, natural colors and extracts like apple juice concentrate, beetroot, or black carrot concentrate can provide a cocoa-like brown color, while malt extracts can add malty flavors. Together, these ingredients can stand in for part of the cocoa a recipe would otherwise use.
The cocoa alternatives market is becoming big business.
Bustling with new innovations, with technology playing a huge role, start-ups like Voyage Foods are starting to gain traction. They offer “cocoa-free chocolate” for companies and buyers to add to their portfolios, capitalizing on the volatility of the cocoa market and also paving the way for more sustainable options.
Meanwhile, other start-ups like Nukoko and Planet A Foods are using various roasting and microbial fermentation techniques to imitate the flavor of chocolate.
Legacy food-industry players
It’s not just the small players moving into this space. Voyage Foods teamed up with ingredients giant Cargill in 2024 to scale up alternatives to cocoa-based products, showing that established food-industry players are also adapting to the evolving market. In a statement at the time, the food heavyweight’s Managing Director of bakery, ice cream and chocolate confectionery Europe, Inge Demeyere, described it as “one of the many ways that we are future-proofing our portfolio and meeting consumer demands…”
Impact for buyers
Other ways buyers are mitigating the risky cocoa market is through supply diversification and sourcing cocoa from alternative locations like Latin America and Indonesia. More sustainable-minded brands are also committed to implementing agroforestry practices in cocoa-producing regions to enhance carbon sequestration, biodiversity, and climate mitigation while supporting farmers.
Procurement professionals are attempting to secure supply through strategic partnerships with suppliers and hedging techniques like buying futures contracts, as another way of fending off volatility consequences.
What could the future hold?
Although growing steadily, the market for cocoa alternatives is still relatively embryonic and dominated by small businesses, although larger players are starting to take note, as highlighted by involvement from the likes of Cargill.
The cocoa-free market has some way to go before it might be considered mainstream, but interest in the sector is unlikely to slow down as long-term pressures on the cocoa sector, such as commodity prices, the push for sustainable supply chains, and constrained supply, force procurement professionals and suppliers to rethink their approach.
