Exclusive: Vegan markets for confectionery show no signs of dimming
pic: KitKat
With more than 700,000 people around the world taking up the Veganuary challenge last January to try out health-conscious diets, it’s a segment that continues to rise considerably. Andreia Nogueira, Heba Hashem, Poorna Rodrigo and Keith Nuthall report
With consumers becoming increasingly health conscious worldwide, demand for vegan chocolate, replacing dairy ingredients with plant-based materials, is growing fast. According to US-based Grand View Research, the global vegan confectionery market – dominated by chocolate – is anticipated to generate $2.62 billion in annual revenues by 2030, expanding at a compound annual growth rate (CAGR) of 9.9 per cent from 2023’s $1.23 billion.
It said: “Increasing adoption of veganism among millennials and the working population is one of the key factors driving demand worldwide. Growing awareness regarding animal cruelty and the rise in campaigns targeted at environmental protection and sustainability are also expected to contribute to the growth of the market.” Another market researcher, India-based SNS Insider, assessed the global vegan confectionery market size as $1.22 billion in 2022, projecting it will expand to $3.02 billion by 2030, at a CAGR of 12 per cent.
Similar growth is projected for the vegan chocolate segment, with Grand View Research concluding global sales were $467.2 million in 2020, forecasting 14.8 per cent CAGR expansion to 2028. India-based Fortune Business Insights thinks that this chocolate segment worldwide could be worth $2.8 billion by 2030. The reason is increased awareness of the impact of animal agriculture on the environment, said the market researcher, and a growing number of lactose intolerant consumers. Notably, the topic was addressed during our Q&A session at the 2023 World Confectionery Conference, at which Plamil’s Adrian Ling noted that despite challenges to present business trading conditions, there remains high demand for vegan offerings.
Consequently, this led him to recently set up a new World Vegan Chocolate day. Significantly, increasing consumer awareness of nutrition and sustainable consumption is another factor driving growth of plant-based milk chocolate offerings, said a spokesperson from London-based market intelligence company Euromonitor International.
Cadbury Dairy Milk
A case in point is plant-based alternative to Cadbury Dairy Milk, the ‘Cadbury Plant Bar’, launched in October 2021. Susan Nash, trade communications manager at brand owner United Statesbased Mondelēz International, told Confectionery Production that it took over two years for Mondelēz International’s Global Centre of Excellence for Chocolate Research and Development in Birmingham, England, to develop this bar: “It retains the creamy taste you expect from Cadbury by replacing the milk with almond paste,” said Nash, adding: “Almond paste provides a similar taste and texture to milk ingredients while offering a hint of nuttiness.”
The bar is available in two flavours: Chocolateley Smooth and Salted Caramel. Besides well-established brands such as Cadbury, emerging brands are also profiting on vegan chocolate. For instance, emerging London-based brand HiP, which makes oat milk vegan chocolate, has been expanding its availability across key UK retailers such as Tesco since 2022, the Euromonitor spokesperson said. In February 2023, it unveiled new oat milk chocolate formats with the launch of three offerings in chocolate pouches and bags; caramel crunch peanuts, peanut butter truffle bites, and creamy and smooth buttons. The UK is also a key market for Nestlé, which launched its KitKat vegan chocolate KitKat V, made with rice syrup powder, in June 2021.
A spokesperson for Nestlé said. “KitKat V came as an answer to a strong trend in food with more people looking for plantbased options, including for treats. Using a test-and-learn approach and collaborating closely with retailers, we rapidly developed pilot novel concepts before committing to a full-scale launch.” Since then, the company launched a few additional products in this segment.
In April 2022, Nestlé Vegan, a new range of vegan chocolate bars made with almond flour, was made available in Spain, and a year later, Nestlé launched vegan chocolate chips under its brand Toll House, Plant Based Dark Chocolate Morsels and Plant Based Semi-Sweet Chocolate Morsels, in the US.
“While the growth rate remains strong, the segment still remains niche. With that said, we believe the category will evolve in time through improved texture and taste which will broaden appeal,” said the spokesperson, adding that such products also contribute to the brands’ sustainability goals. Building on Switzerland’s reputation for innovative chocolates, another brand Lindt & Sprüngli has also developed vegan lines, such as in the UK, for example, its Lindt Classic Recipe Vegan Smooth, Vegan Caramel Sea Salt and Vegan Hazelnut chocolate bars: “We see that in recent years, a vegan diet has become increasingly popular,” said the spokesperson. “To align with this conscious lifestyle, we offer a selection of chocolates with vegan recipes.
Due to varying demand and local taste preferences, the vegan assortment differs from market to market,” a Lindt & Sprüngli spokesperson commented to Confectionery Production. The same source stressed that for all innovations, the company uses “high-quality ingredients and does not compromise on taste.”
Another major Swiss chocolatier, Barry Callebaut, launched in February 2022, NXT, a 100 per cent plant-based and dairy-free chocolate, designed to match the characteristic taste and creaminess of fine Belgian chocolates, according to a company note. For its NXT dairy-free M_lk chocolate, milk is replaced with chufa (Cyperus esculentus or tiger nut) that grows in the Mediterranean region and Africa. The company said chufa tubers are dried and ground, replacing milk’s creamy mouthfeel, while also being sustainable and fibre-rich. A Barry Callebaut note sent to Confectionery Production said that vegan chocolate products are a “growing market with a lot of space to explore and grow”. “We still see some room for improvement in the collaboration and communication to a wider audience of chefs, who can still be inspired to embark on their journey in a vegan and dairy free environment, from inspirational recipes to knowledge on possible replacement of ingredients,” it added.
pic: Barry Callebaut chocolate production
Financial gains
As studies have noted, in the 2022/23 financial year, Western Europe continued to be the largest chocolate confectionery market with a global sales share of 33 per cent, according to the German global data and business intelligence platform, Statista’s findings. In North America, the plant-based chocolate market is also booming as mainstream brands catch on to the growing appetite for dairy-free products. Here too, the entry of the world’s largest chocolate manufacturers into the market is now fuelling interest in this segment. US-basedHershey’s release of dairyfree alternatives for two of its most iconic brands this spring (2023) made headlines. After introducing Reese’s plant based oat chocolate confection plant based peanut butter cups and Hershey’s oat-made vegan chocolate, and its plant based oat chocolate (extra creamy, almond and sea salt) to the US market, the brand replicated its success with the launch of Hershey’s oat made chocolate bar in Canada recently.
Hershey’s dairy-free range is made with oats, one of the ingredients which gives the chocolates their smooth and creamy texture, Teal Liu, brand manager, Better for You, at The Hershey Company, told our publication. “The Hershey’s and Reese’s plant based offerings make these household favourites available to new consumers avoiding dairy or following plant-based or vegan diets,” said Liu, adding that the company was planning to expand its plant-based range into new forms and pack types.
Meanwhile, the California-based Guittard Chocolate Company has also debuted three retail dairy-free baking chocolate chips in the US. Available since June (2023), this range includes semisweet chocolate chips, extra dark chocolate chips, and Akoma organic extra semisweet Chocolate Chips, all certified on Vegan.org, run by the Vegan Awareness Foundation, and produced on the company’s new dairyfree, kosher-pareve (non-animal ingredients) processing line. Guittard has also launched dairy-free options within its industrial ingredient lines, targeting vegan bakeries, dairy-free ice-cream makers, and other food manufacturers: “Our dairy-free baking chips are currently on retail shelves; we’ve been getting great feedback from consumers and have had a lot of interest from our wholesale customers who have been integrating these products into their baking and confectionery programmes,” said chief marketing officer, Amy Guittard.
Market research suggests this is a potentially profitable track in the USA, with analysis by California-based trade body Plant-Based Food Association indicating that 70 per cent of all US consumers ate plant-based alternative foods in 2022, up from 66 per cent in 2021.
US vegan growth
The US vegan chocolate market is set to surpass $294 million in annual sales over the next five years, witnessing a compound annual growth rate of 17.8 per cent through 2027, according to a report from Ireland-based market intelligence company Research and Markets. It reported that the US vegan chocolate market generated $110 million in sales during 2021 and $133.78mn in 2022. Market activity has grown as a result. Lindt and Sprüngli launched two vegan chocolate bars in the US in 2022, in original and salted caramel flavours, with these oat milk powder and almond paste lines launched months after a similar release in Canada, in original, hazelnut and salted caramel flavours. Furthermore, Mondelēz recently introduced two flavours of the Cadbury’s Plant Bar in Canada. Despite the increasing activity in the US vegan chocolate space, spokesperson Liu made a key observation. She said: “The Hershey’s and Reese’s plant-based offerings make these household favourites available to new consumers avoiding dairy or following plant-based or vegan diets.
