Sustainability and Ethical Sourcing Drive Market Evolution

Sustainability and ethical sourcing have become significant concerns in the ASEAN chocolate market, with consumers increasingly prioritizing products that are sustainably sourced. This shift is prompting major brands to commit to more sustainable practices, aiming to source cocoa from certified sustainable farms. The Sustainable Cocoa Production Programme (SCPP) in Indonesia has reached 165,000 farmers over the past decade, indicating a substantial commitment to sustainable cocoa production. Additionally, Olam Food Ingredients (ofi) has achieved 100% traceability of directly sourced cocoa across its global supply chain, which includes efforts in ASEAN countries. In a significant move towards sustainability, Mondelēz International and ofi are collaborating to create the world's largest sustainable commercial cocoa farm in Indonesia. However, the market faces challenges related to the volatility of raw material prices, particularly cocoa. Fluctuating cocoa prices, driven by adverse weather conditions and political instability in key production regions, affect pricing strategies and profitability for manufacturers. 

Despite these challenges, the ASEAN chocolate market continues to thrive, driven by strong consumer demand and the presence of both local and international chocolate brands that cater to the diverse tastes of the region's consumers. The market's growth is further supported by the increasing adoption of chocolate as a symbol of celebration and affection, particularly among the growing middle class, with Malaysia's per capita waste generation of 1 to 1.33 kg/person/day indirectly reflecting the increased consumption patterns.

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 Market Dynamics 

Driver: Rising disposable income and urbanization boosting chocolate demand across ASEAN countries

The ASEAN chocolate market is experiencing a significant surge in chocolate demand, primarily driven by rising disposable incomes and rapid urbanization. In 2024, Vietnam reported a median per capita disposable income of 34,707 yuan, marking a 5.1% increase from the previous year. This substantial growth in purchasing power has directly translated into higher consumption of premium chocolate products, as urban consumers are more willing to indulge in luxury food items. The urbanization trend in ASEAN countries continues to reshape consumption patterns, with Vietnam's urban population growing from fewer than 13 million in 1986 to 30 million in 2024, reflecting a significant shift towards urban living. This urban migration is exposing consumers to a wider variety of chocolate products and international brands, further fueling demand.

The impact of rising disposable incomes and urbanization on chocolate demand is evident in the changing retail landscape across ASEAN cities. Convenience stores in the chocolate market have emerged as a dominant retail channel, catering to the fast-paced urban lifestyle and the desire for quick, indulgent treats. This shift in retail preferences has made chocolate more accessible to urban consumers, driving up demand. Moreover, the growing middle class in ASEAN cities, projected to reach 65% of the population by 2030, is increasingly exploring premium chocolate options, seeking out unique flavors and ethical sourcing. The influence of Western lifestyles and the growing awareness of health benefits associated with chocolate consumption, particularly dark chocolate, are further shaping these purchasing behaviors. As urbanization continues to reshape consumption patterns in ASEAN cities, chocolate manufacturers are focusing on innovation and sustainability to meet the evolving demands of urban consumers with higher disposable incomes.

Trend: Premiumization and artisanal products gaining popularity among discerning ASEAN consumers

The ASEAN chocolate market is witnessing a significant shift towards premiumization and artisanal products, as discerning consumers increasingly seek high-quality, unique chocolate experiences. This trend is particularly evident in the latest product launches and market developments of 2024. For instance, Haldiram's, a prominent Indian snacks and sweets brand, entered the premium market in January 2024 with the launch of 'Cocobay'. This new brand emphasizes the use of 100% pure cocoa and incorporates traditional Indian flavors, including fruit and spices, to cater to local tastes and preferences. The move reflects the growing demand for premium chocolates that offer unique flavor profiles and high-quality ingredients.

The premiumization trend in the ASEAN chocolate market is further exemplified by the introduction of innovative products that blend traditional flavors with modern twists. In 2024, there's been a notable increase in the launch of plant-based and health-conscious premium chocolate options. For example, Hershey's Oat Made, introduced in late 2023, has gained significant traction in 2024, offering plant-based chocolate options in flavors like Creamy and Almond & Sea Salt. This product targets health-conscious consumers and those seeking dairy-free alternatives, aligning with the rising demand for plant-based snacks while maintaining a premium chocolate experience. Similarly, Toll House's launch of plant-based chocolate chips has catered to the growing demand for vegan and dairy-free baking ingredients in the premium segment. These launches highlight the industry's response to evolving consumer preferences for high-quality, ethically sourced, and health-conscious chocolate products. 

Challenge: Fluctuating cocoa prices affecting production costs and profitability for manufacturers in ASEAN region

The ASEAN chocolate market faced unprecedented challenges in 2024 due to the volatile nature of cocoa prices, which have had a direct impact on production costs and profitability for manufacturers. Cocoa prices surged to historical highs, reaching $10.32 per kilogram in December 2024 and continuing to rise to $10.75 per kilogram in January 2025. This price surge, the largest seen in over six decades, was driven by poor weather conditions in West Africa, a major cocoa-producing region, and strong seasonal demand. The situation was exacerbated by a global cocoa shortage, with the International Cocoa Organisation (ICCO) reporting a production deficit of 478,000 metric tons for the 2023–24 season, and end-of-season stocks at their lowest levels in 46 years.

This unprecedented price increase has put immense pressure on chocolate manufacturers in the ASEAN chocolate market, many of whom rely heavily on imported cocoa beans. The impact is especially severe for smaller manufacturers who lack the financial resilience to absorb such cost increases, leading to potential disruptions in their operations and market presence. To mitigate the impact of fluctuating cocoa prices, ASEAN chocolate manufacturers are exploring alternative strategies in 2024. Some companies are investing in local cocoa production to reduce dependency on imports, while others are diversifying their product lines to include less cocoa-intensive offerings. There's also a growing trend towards premiumization, with manufacturers focusing on high-quality, artisanal products that can command higher prices and offset the increased costs. Despite these challenges, the ASEAN chocolate market remains resilient, driven by rising disposable incomes and urbanization. However, the ongoing volatility in cocoa prices poses a significant challenge to the sustainability and profitability of chocolate manufacturers in the region, necessitating innovative strategies and leveraging of local resources to ensure long-term growth and stability in 2024 and beyond.

Segmental Analysis 

By Product Type 

The ASEAN region has shown a strong preference for milk chocolate, which accounts for over 55% of the chocolate market share. This dominance is driven by several factors, including cultural preferences, affordability, and the widespread perception of milk chocolate as a sweeter and more palatable option compared to dark or white chocolate. In 2024, the average consumption of milk chocolate in ASEAN countries reached 1.2 million metric tons, with Indonesia leading at 450,000 metric tons, followed by Thailand at 300,000 metric tons. The region’s tropical climate also plays a role, as milk chocolate’s creamy texture is more appealing in warmer weather. Additionally, the growing middle class, which increased by 8% in 2024, has boosted demand for indulgent treats like milk chocolate. Major brands like Nestlé and Mars have capitalized on this trend by introducing localized flavors such as pandan and coconut, which have seen a 15% increase in sales. The affordability of milk chocolate, priced at an average of $3.50 per 100 grams, further drives its popularity. Retailers have also reported a 20% year-on-year growth in milk chocolate sales, driven by aggressive marketing campaigns targeting younger consumers. The convenience of single-serve packaging, which accounts for 40% of milk chocolate sales, has also contributed to its widespread consumption.

Milk chocolate’s dominance in the AEAN chocolate market is further reinforced by its versatility in both snacking and gifting occasions. In 2024, milk chocolate accounted for 60% of all chocolate gifts during festive seasons like Lunar New Year and Ramadan. The region’s growing e-commerce sector, which expanded by 25% in 2024, has also made milk chocolate more accessible, with online sales contributing to 30% of total milk chocolate revenue. The introduction of healthier variants, such as low-sugar milk chocolate, has also seen a 10% increase in sales, catering to health-conscious consumers. The ASEAN region’s milk chocolate market is projected to grow by 7% annually, driven by increasing disposable incomes and urbanization. With over 70% of consumers preferring milk chocolate for its creamy texture and sweet taste, it is clear that this segment will continue to dominate the ASEAN chocolate market in the foreseeable future.

By Price Range 

Economy chocolate, priced at an average of $2.80 per 100 grams, accounts for over 55% of the chocolate sold in the ASEAN chocolate market. This dominance is driven by the region’s large population of price-sensitive consumers, which grew by 7% in 2024. The affordability of economy chocolate makes it accessible to a wider audience, particularly in rural areas where disposable incomes are lower. In 2024, economy chocolate sales in rural areas grew by 15%, driven by the expansion of local retail networks. Major brands like Mondelez and Hershey’s have capitalized on this trend by offering smaller, more affordable packaging options, which account for 50% of economy chocolate sales. The convenience of economy chocolate, available in over 150,000 retail outlets across ASEAN, has also contributed to its higher demand.

The region’s growing middle class, which increased by 8% in 2024, has also fueled the demand for economy chocolate as an affordable indulgence in the ASEAN chocolate market. In 2024, economy chocolate accounted for 60% of all chocolate purchases during festive seasons like Diwali and Christmas. The introduction of localized flavors, such as durian and mango, has also seen a 10% increase in sales, catering to regional tastes. The ASEAN region’s economy chocolate market is projected to grow by 6% annually, driven by increasing urbanization and the expansion of modern retail channels. With over 70% of consumers preferring economy chocolate for its affordability and familiar taste, it is clear that this segment will continue to dominate the ASEAN market in the foreseeable future.

By End Users

Retail and consumer channels account for over 50% of chocolate consumption in the ASEAN chocolate market, driven by the convenience and accessibility of these channels. In 2024, the average household expenditure on chocolate in the region reached $25 per month, with retail sales contributing to 60% of total chocolate revenue. The region’s growing e-commerce sector, which expanded by 25% in 2024, has also made chocolate more accessible, with online sales contributing to 30% of total chocolate revenue. Major brands like Nestlé and Mars have capitalized on this trend by offering exclusive online promotions, which have seen a 20% increase in sales. The convenience of single-serve packaging, which accounts for 40% of retail chocolate sales, has also contributed to its widespread consumption.

The region’s growing middle class, which increased by 8% in 2024, has also fueled the demand for retail chocolate as an affordable indulgence. In 2024, retail chocolate accounted for 70% of all chocolate purchases during festive seasons like Lunar New Year and Ramadan. The introduction of healthier variants, such as low-sugar chocolate, has also seen a 10% increase in sales, catering to health-conscious consumers. The ASEAN retail chocolate market is projected to grow by 5% annually, driven by increasing urbanization and the expansion of modern retail channels. With over 80% of consumers preferring retail chocolate for its convenience and affordability, it is clear that this segment will continue to dominate the market in the coming years.

By Nature

Conventional chocolate has captured over 85% of the ASEAN chocolate market’s revenue share, driven by its affordability, widespread availability, and established consumer trust. In 2024, the average price of conventional chocolate in the region was $4.20 per 100 grams, making it significantly more accessible than organic chocolate, which averaged $8.50 per 100 grams. The region’s large population of price-sensitive consumers, which grew by 6% in 2024, has further fueled the demand for conventional chocolate. Major brands like Cadbury and Ferrero have maintained their dominance by offering a wide range of conventional chocolate products, which account for 90% of their sales in the region. The convenience of conventional chocolate, available in over 200,000 retail outlets across ASEAN, has also contributed to its higher penetration. In 2024, conventional chocolate sales in supermarkets and hypermarkets grew by 12%, driven by bulk purchasing and promotional discounts.

The lack of awareness about the benefits of organic chocolate has also played a role in conventional chocolate’s dominance in the chocolate market. In 2024, only 15% of ASEAN consumers were aware of the health benefits of organic chocolate, compared to 65% in Europe. The region’s limited organic cocoa production, which accounts for just 5% of total cocoa output, has also constrained the availability of organic chocolate. Additionally, the higher production costs of organic chocolate, which increased by 10% in 2024 due to stricter certification requirements, have made it less competitive in the market. The ASEAN region’s conventional market is projected to grow by 5% annually, driven by increasing urbanization and the expansion of modern retail channels. With over 80% of consumers preferring conventional chocolate for its familiar taste and affordability, it is clear that this segment will continue to dominate the ASEAN chocolate market in the coming years.

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Top Companies in the ASEAN Chocolate Market:

• Nestlé
• Mondelez International
• Mars International
• Hershey
• Ferrero International SpA
• Lindt
• Lotte Wellfood Co., Ltd.
• Barry Callebaut
• Marou Chocolate
• Other Prominent Players

Market Segmentation Overview:

By Product Type

• Dark Chocolate
• Milk Chocolate
• White Chocolate

By Nature

• Organic
• Conventional

By Form

• Chocolate Bars
• Chocolate Bonbons
• Chocolate Chips
• Others

By Price Range

• Economy
• Mid-Range
• Premium

By End Use

• Retail and Consumer
• Food service and HoReCa
• Industrial Use

By Sales Channel

• Online
• Offline

By ASEAN

• Indonesia
• Malaysia
• Singapore
• Thailand
• Philippines
• Rest of ASEAN