Compound chocolate is a less expensive chocolate replacement made from a combination of cocoa, vegetable fat, and sweeteners. It may also be known as chocolate confectionery, confectioner's chocolate, or chocolatey coating when used as a coating for candy.
Often used in lower-grade candy bars, compound chocolate is designed to simulate enrobed chocolate on a product. It costs less than chocolate, as it uses less expensive hard vegetable fats and tropical fats such as coconut oil and palm kernel oil in place of the more expensive cocoa butter as its fat source.
Cocoa butter must be tempered to maintain gloss and coating. A baker tempers chocolate by cooling the chocolate mass below its setting point, then re-warming the chocolate to between 88°F and 90°F for milk chocolate, or between 90°F and 92°F for semi-sweet chocolate. Compound coatings, however, don't need to be tempered. Instead, they're simply warmed to between 5°F and 10°F above the coating's melting point