We receive many inquiries each day regarding the differences between chocolate and compound coating. Since they are often both referred to as chocolate, we felt it would be helpful to explain in some detail the differences between real chocolate and Compound Coating.  We will also explain what Compound Coating is and for what applications it is best used. 

1.                  What is Compound Chocolate?

The FDA (Food and Drug Administration, a federal agency) mandates that in order to be called “chocolate”, the fat content of the cocoa product is limited to cocoa butter (the naturally-occurring fat of the cocoa bean) and dairy (milk) fat.

The cocoa butter in true chocolate melts at human body temperature, giving chocolate a “melt-in-your-mouth” quality, which enhances the cocoa flavor and contributes to the sensory experience of eating chocolate.

Only products containing cocoa solids, cocoa butter and dairy fat can be sold as chocolate in the United States.  European Union regulations are different and allow up to 5% of other vegetable fats to be present in true chocolate.

Compound Chocolate is a cocoa product containing vegetable fats in the place of cocoa butter.  The vegetable fats commonly used are often “hard” fats or fats semi-solid at room temperature, such as coconut oil and palm kernel oil.  One of the chief benefits of compound chocolate is that it can deliver cocoa flavor at a greatly reduced cost, due to the fact that vegetable fats are less expensive that cocoa butter.

Compound Chocolate also has the advantage of not having to be tempered.  True chocolate must be heated and cooled in a specific way in order to solidify and avoid fat bloom, which is the rising to the surface of the cocoa butter, giving the chocolate a dull, cloudy surface.  Because of the texture of the vegetable fat in compound chocolate, the melted compound will harden within a few minutes of removal from a heat source, creating a firm adherent coating on an item dipped in melted compound chocolate.

Compound Chocolate will not produce the shiny surface of tempered true chocolate.   According to Archer Daniels Midland, a cloudy surface on items made with compound chocolate may be associated with excessive humidity present when the compound is hardening. 

Compound Chocolates all follow the same basic recipe:  cocoa solids, vegetable fats and sweetener, with milk solids added for milk varieties.  Other flavors and colors may be added, and an emulsifier is necessary to keep the product from separating.  “White Chocolate” is not a chocolate at all because it contains no cocoa solids.  “White Chocolate coating” is a mixture of sugar, vegetable fat, milk and whey, with emulsifiers and flavoring.

The majority of Compound Chocolate is sold in chip, melt or disc form for ease of packaging, merchandising and transportation and consumer use.  Compound chocolate may be formed into any shape, including large bars.  A liquid compound chocolate is available for industrial use and can be shipped in tankers.

Compound Chocolate is also known commercially as coating chocolate,compound chocolate coating, chocolate summer coating, decorator’s chocolate, confectioners’ chocolate, confectionery coating, chocolate flavored coating or confectioners’ coating chocolate 

2.                  Handling, Storage, Heating and Use of Compound Chocolate

Compound Chocolate chips or melts are similar in appearance to true chocolate chips or discs.  They may substitute for true chocolate in certain applications; keep in mind that compound chocolate does not need to be tempered.  Compound chocolate will not have the same “mouth feel” prized by connoisseurs of true chocolate, because the fat in compound chocolate has a higher melting point.

Compound Chocolate products should be stored in a cool, dry place, away from excessive heat and humidity.  Neither chocolate nor compound chocolate should be refrigerated or frozen; the condensation will introduce water into the product which will cause the chocolate to seize or become grainy and coarse when it is melted.  Airtight containers are preferable to prevent the compound from absorbing odors.

Compound Chocolate melts at temperatures slightly higher (5-10 degrees Fahrenheit) than true chocolate, with the range of 103 to 108 degrees to a maximum of 118 to 123 degrees Fahrenheit.  The compound may be held at this temperature range for an extended period of time, but occasional stirring is required to avoid scorching and hot spots.  If the compound is run in a chocolate fountain, stirring should be unnecessary.

As with true chocolate, care should be taken with milk and white compound varieties because the dairy components are more likely to burn with excessive heat.  Melt and hold milk and white compound chocolate at the lower end of the temperature range, and stir often.

       3.       Ingredients of Compound Chocolate                                    Sugar        

Sugar is the sweetener of the compound chocolate.  Sugar also adds texture and body to a recipe in which it is an ingredient.  “Sugar” implies derivation from cane or beet sources.  The ingredient to be concerned about is high fructose corn syrup (HFCS) has which received considerable bad press because of its prevalence in processed “junk” food – HFCS has to be labeled as such so it is not a problem here.

                Vegetable Fat        

Vegetable fat in compound chocolate replaces the cocoa butter in true chocolate.   The substitution of vegetable fat for cocoa butter results in a considerable cost savings.

Vegetable fats used may include coconut oil and palm kernel oil.

Coconut oil is a fat consisting of about 90% saturated fat. The oil contains predominantly medium chain triglycerides, with roughly 92% saturated fatty acids, 6% monounsaturated fatty acids, and 2% polyunsaturated fatty acids. Of the saturated fatty acids, coconut oil is primarily 44.6% lauric acid, 16.8% myristic acid a 8.2% palmitic acid and 8% caprylic acid, although it contains seven different saturated fatty acids in total. Its only monounsaturated fatty acid is oleic acid while its only polyunsaturated fatty acid is linoleic acid.

Coconut oil is often partially or fully hydrogenated to increase its melting point in warmer temperatures. This increases the amount of saturated fat present in the oil, and may produce trans fats.  (Since Sephra Melts are marked “no trans-fats” I am assuming that the oil is not hydrogenated.  This could be a sticking point for companies such as Whole Foods who have “banned ingredients” lists – trans fats are included – or with those who exclude trans fats from their diets.)

Palm oil and palm kernel oil are composed of fatty acids, esterified with glycerol just like any ordinary fat. Both are high in saturated fatty acids, about 50% and 80%, respectively. The oil palm gives its name to the 16 carbon saturated fatty acid palmitic acid found in palm oil; monounsaturated oleic acid is also a constituent of palm oil while palm kernel oil contains mainly lauric acid. Palm oil is the largest natural source of tocotrienol, part of the vitamin E family. Palm oil is also high in vitamin K and dietary magnesium.

As they are not derived from animal sources, both coconut oil and palm kernel oil are cholesterol-free.

Cocoa is the dried and partially fermented fatty seed of the cacao tree from which chocolate is made.  Cocoa powder is the dry powder made by grinding cocoa seeds and removing the cocoa butter from the dark, bitter cocoa solids.

Dutch process, “Dutched” or european cocoa is treated with an alkali to make the flavor milder and richer and less bitter.  The process also changes the color of the cocoa to a dark, rich, reddish shade.

Natural cocoa, also known as American, regular or non-alkalized cocoa, is lighter and more acidic.  The acidity or alkalinity of cocoa is important for bakers, who might change the leavening of baked goods depending on which cocoa is used.

                   Standard cocoa powder has a fat content of approximately 10-12 percent.

Full Cream Milk Powder has 26% minimum butter fat.  It is the “milk” component in milk coating chocolate and a primary ingredient in white coating chocolate.  This is an animal product with implications for those with milk protein allergies, vegans and vegetarians, and those who keep Kosher.

Emulsifiersare compounds that allow two or more unlike and non-blendable substances to be mixed together as a stable whole. 

Lecithin (E322) is used commercially in substances requiring a natural emulsifier and/or lubricant. Lecithin is the emulsifier that keeps cocoa and cocoa butter in a candy bar from separating.  Note:  one source of lecithin is soy (soya lecithin), which may prevent the product from being Kosher for Passover.

E numbers (such as E322 for lecithin) are codes for food additives and are found on food labels throughout the European Union. The numbering scheme follows that of the International Numbering System (INS) as determined by the Codex Alimentarius.  Only a subset of the INS additives are approved for use in the European Union, the ‘E’ prefix which stands for Europe. In casual language in the UK and Ireland, the term “E-number” is used as a pejorative term for artificial food additives, and products may promote themselves as “free of E-numbers” even though some of the ingredients (e.g. bicarbonate of soda) do have such a code.

PGPR (E476):  Polyglycerol Polyricinoleate (PGPR), E476, is an emulsifier made from castor beans which reduces the viscosity of chocolate and similar coatings and compounds. It works by decreasing the friction between the particles of cocoa, sugar, milk, etc. present so that they can flow more easily when melted. It is used at low levels (fractions of percents.) It is virtually always paired with lecithin or another plastic viscosity-reducing agent.

Vanilla is a generic term describing the flavor essence associated with the pod of certain orchids of the genus vanilla.


Vanillin is a specific term referring to the chemical which contributes the vanilla flavor note.  Though there are many compounds present in the extracts of vanilla, the compound vanillin (4-hydroxy-3-methoxybenzaldehyde) is primarily responsible for the characteristic flavor and smell of vanilla. Vanillin can be natural, derived from the pods of orchids of the vanilla species, or synthetic, derived from lignin, a by-product of paper processing, or coal tar.

3.                  Uses of Compound Chocolate

Compound chocolate is most commonly in the chocolate industry for making   molded candies.  The qualities of compound chocolate, notably its attractive price and the fact that it hardens without tempering, make it ideal for use by the hobbyist chocolatier.  Compound chocolate has a reputation for being less “fussy” or hard to work with than true chocolate.  The flavor, while not as rich as true chocolate, is very appetizing and desirable.

Compound chocolate is a reliable substitute for couverture chocolate in chocolate fountains, and may be a significant cost-saving tool for large-volume chocolate users such as caterers, restaurants and other commercial enterprises.  The procedure for use is identical to that of couverture chocolate.

Compound chocolate is the ingredient of choice in confectionary and bakery applications that involve dipping items in chocolate, such as chocolate-dipped strawberries and cookies.  Only compound chocolate will harden to a shell at room temperature without tempering.

Compound chocolate may be used in baking; as with couverture chocolate, the chocolate compound pieces will not hold their shape like commercial chocolate chips, which are formulated to hold their shape during baking.

Sephra Compound Coating

We have developed a range of coating compounds for use in the chocolate fountains and also for candy making. We sell it under the brand of &quot Sephra Melts ” to distinguish it from the other Sephra chocolate products that are made of real coverture chocolate. The Sephra Melts compound coating comes in dark, milk and white flavors. We have had rave reviews on its use for candy making and creating hand dipped confections. We hope that you will give it a try.