Biting into the Vegan Chocolate Market

Updated: Jan 4

Key Takeaways

  • Demand for vegan chocolate is booming. Europe is the largest market for plant-based chocolate, with Italy and France showing great potential for market growth.

  • Milk chocolate alternatives have substantial room to grow within the vegan chocolate space. Product availability has been outpaced by demand.

  • Brands that label chocolate products as vegan have the opportunity to appeal to conscious consumers. Consumers in Spain and the UK are ready to pay a higher price point for chocolate products that are marked as vegan.

  • Two notable companies in the vegan chocolate space: Aguila and iChoc. Both brands are experiencing tremendous growth, and have strong footholds in Argentina and Spain respectively.

Full Report

Vegan chocolate is a niche market experiencing rapid growth. It comprises 40% market share of the total vegan confectionary market and is currently valued at US$1 billion. With an expected compound annual growth rate (CAGR) of 12% from 2020 to 2027, it is expected to outpace the traditional chocolate market, which has a predicted 4.6% CAGR in the same timeframe. (1, 2) Our analysis of 470K consumer reviews on our platform reveals key insights about the fastest growing vegan chocolate markets and consumer-driven demand for new innovation in this space.

Strong presence of European countries for chocolate reviews and plant-based chocolate demand

Amongst the top markets for vegan chocolate, almost half of them are from Europe. This is consistent with expectations for Europe to dominate the market in the coming decade. The growing awareness of animal welfare, health and sustainability plays a pivotal role in this growth. (3) Argentina, the UK, South Africa, and Spain have high chocolate review counts and chocolate reviews per user. Countries like Italy and France have a smaller presence in the global market, but have remarkable numbers of reviews per user. This indicates potential market opportunities in these countries.

Substantial room for growth and innovation in milk chocolate alternatives

Most dark chocolate products are accidentally vegan as they naturally exclude dairy ingredients. Based off a sample of 1,181 chocolate products on our platform, 8.5% of chocolate products reference milk chocolate on their product label, with the usage of language such as milk, mylk, leche or creamy. Fewer than 1.0% of products specifically market themselves as a "milk chocolate alternative". This stands in stark contrast to the non-vegan chocolate market, which is largely dominated by milk chocolate products. (2)

Nonetheless, there is sizable demand for milk chocolate alternatives. While there are significantly fewer milk chocolate alternative options, 2019-2020 review growth for these products has outpaced that of other vegan chocolate products by more than 50%. This is driven by consumers' growing desires for more vegan-friendly and lactose free options, similar to the findings in our dairy alternatives report. Analysis of written reviews by consumers indicates that the discovery of milk chocolate alternatives is an exciting and welcome change, especially given that the large majority of available products is dominated by dark chocolate.

Despite the substantial rise in demand, however, the availability of various vegan milk chocolate products has struggled to keep up. The growth in number of milk alternative chocolate products (4.0X) between 2019 and 2020 has stayed relatively consistent with that of other vegan chocolate products (4.2X). This suggests that there is viable market opportunity for brands to enter the milk chocolate alternative market to satisfy growing demand from consumers. Established brands are already making strides in this area; Galaxy launched a new line of vegan milk chocolate bars earlier this year and both Cadbury and Lindt have plans to launch a vegan oat milk chocolate bar next year. (4, 5, 6)

Furthermore, analysis of consumer ratings indicate that existing products fall short compared to other vegan chocolate products — particularly in terms of taste. This suggests that there is room for improvement and innovation in this area. According to Mintel, almost all chocolate-eaters consider taste to be the most important factor when it comes to selecting chocolate products. (7) Therefore brands should be optimizing for taste when entering the vegan milk chocolate market.

We saw a huge increase in popularity of vegan chocolates on our app this year. A lot of people don't realize that dark chocolates mostly are already vegan and what's lacking is just awareness about it. Popular brands like Lindt, Hershey's and Ritter already have vegan choices but more and more people are looking for new brands which are committed to making their chocolates more sustainable and healthier by being dairy-free.

- Sweta, Growth Strategist, abillion

Consumers in Spain and the UK ready to pay a higher price point for chocolate products that are marked as vegan

Compared to the traditional chocolate market, chocolate options labelled as vegan are relatively far and few. Between 2015 and 2018, only 5% of global chocolate launches made a vegan claim, with the majority of products being naturally dairy free. (7) However, as interest in the vegan lifestyle moves into the mainstream — driven by health benefits, non-dairy diet restrictions and conscious consumerism — more brands are beginning to explicitly label their products as vegan. In this section, we investigate how consumers have responded in their reviews to products with an explicit vegan label compared to those without.

For this analysis, we applied computer vision techniques on product images from reviews to identify chocolate products that include "vegan" on their product label. We found that 19% of chocolate products reviewed on our platform make a vegan claim. Furthermore, reviews for these images comprise 34% of all chocolate reviews in the sample, indicating a disproportionately higher interest in chocolate products specifically labelled as vegan. Similarly, the observed growth in number of reviews for vegan-labelled chocolate in the past year is markedly higher than that of other products.

Digging deeper into consumer reviews of these products, those with the vegan label are perceived as more expensive across several top markets, particularly in Spain, the UK, the US and Singapore. Given that average overall ratings for vegan-labelled chocolate are notably higher in Spain and the UK, brands launching products with a vegan claim in these markets can reasonably afford to sustain a higher price point. By contrast, in Germany and Singapore, where vegan-labelled products are similarly perceived as more expensive, increased satisfaction is not reflected in their respective ratings. Therefore, brands will need to match competitors on quality and price to avoid falling behind.

Besides quality and price, fair trade practices are increasingly important to consumers. Calls for ethical standards in reviews on the abillion app have increased 8-fold in the past year, consistent with the broader rise in conscious consumerism we've been observing. According to Fairtrade Australia New Zealand, only 10% of the world's cocoa is sold on fair trade terms. (8) Similarly, analysis of product images on our platform indicate that 11% of chocolate products mention fair trade practices on their product label. Significant improvements are needed to improve ethical standards across global supply chains; firms incorporating fair trade into their brand strategy and operations will ultimately benefit from growth opportunities presented by catering to socially responsible consumers.

Global chocolate market remains fragmented; Aguila and iChoc exhibit strong growth potential in Argentina and Spain respectively

Non-vegan powerhouses such as Cadbury, Mars, Hershey's and Nestlé are absent from the vegan chocolate space. A lack of an overlap of top markets amongst popular brands is a sign of a fragmented global chocolate market. This suggests that market share is up for grabs.

We expect a rapid expansion in the vegan chocolate market in the next 5 years. Amongst the fastest growing brands in each country, Aguila and iChoc stand out in particular. Interest in vegan chocolate by Aguila and iChoc has exploded by 10X and 9X from last year. Both brands are also winners of abillion's Top 20 Vegan Chocolate Awards in 2020. Members on our platform favor chocolate products from both brands based on taste, value, and presentation.

Vegan chocolate is a niche territory full of opportunities

Our analysis of 470K reviews suggests a large growth in demand for vegan chocolate. The largest vegan chocolate markets are Argentina, the UK and South Africa. There is also an increasing consumer interest in Italy and France. Amongst vegan chocolates, we found notable interest in milk chocolate alternatives. Reviews for these products are growing at exponential rates despite limited product selection. This suggests a demand for increased innovation and investment in this area.

Not all vegan chocolate products are explicitly labelled vegan. Yet, consumers in Spain, the UK and the US rate vegan-labelled products higher than "accidentally vegan" ones. Despite that, most top markets perceive vegan-labelled products as more expensive. Finally, an analysis underscored the absence of a global leader in the vegan chocolate market. We highlighted Aguila and iChoc as two brands experiencing rapid growth. Within their markets, we expect them to capture more market share in the coming years. As vegan chocolate goes mainstream, firms should invest strategically to capitalize on the growing demand.


Authors:

Emily Dothe, @emdothe77

Lek Hong, @lekhong


References

  1. Grand View Research (2020) Vegan Confectionary Market Size, Share & Trends Analysis Report. Retrieved from https://www.grandviewresearch.com/industry-analysis/vegan-confectionery-market

  2. Grand View Research (2020) Chocolate Market Size, Share & Trends Analysis Report. Retrieved from https://www.grandviewresearch.com/industry-analysis/chocolate-market

  3. Vegconomist (2019) Market Report: Significant Market Growth for Vegan Chocolate by 2027. Retrieved from https://vegconomist.com/market-and-trends/market-report-significant-market-growth-for-vegan-chocolate-by-2027/

  4. CNN Business (2019) Mars is launching a vegan 'milk chocolate' bar. Retreived from https://www.cnn.com/2019/11/13/business/mars-launches-vegan-galaxy-bar-intl-scli-gbr/index.html

  5. VegNews (2020) Cadbury Heir to Launch Vegan Oat Milk Chocolate Bars. Retrieved from https://vegnews.com/2020/9/cadbury-heir-to-launch-vegan-oat-milk-chocolate-bars

  6. Green Queen (2020) Lindt Is Rolling Out Vegan Oat Milk Chocolate Bars In Eco Packaging. Retrieved from https://www.greenqueen.com.hk/lindt-is-rolling-out-vegan-oat-milk-chocolate-bars-in-eco-packaging/

  7. Mintel (2019) Vegan Chocolate Moves from Margins to Mainstream. Retrieved from https://www.mintel.com/blog/food-market-news/vegan-chocolate-moves-from-margins-to-mainstream

  8. Fairtrade Australia New Zealand (2020) Happiness is...A Block of (Fairtrade) Chocolate. Retrieved from https://fairtradeanz.org/for-consumers/products/chocolate

Notes

  1. In May 2020, the Canada Food Inspection Agency issued a warning that 2 iChoc products contain trace amounts of milk. iChoc released a statement to clarify its stance. https://ichoc.de/en/ichoc-statement/

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