What makes milk chocolate different from dark chocolate? All chocolate (as well as cocoa) is derived from the seeds (beans) of the cacao tree, Theobroma cacao, native to the American tropics. The heart of the beans, called "nibs," are contained in foot-long pods and are additionally protected by individual outer shells. When finely ground, nibs become "chocolate liquor," consisting of both cocoa solids and cocoa butter, which are separable. Proportions of these constituents used in chocolate products can be important to the consumer (one chocolate form or variety may, for example, contain more fat than another), as well as to the manufacturer (one may be more or less costly than another). These proportions also affect flavor.
FDA standards for cacao products were updated in 1993, and the final amended regulations were published in the May 21, 1993, Federal Register. Those rules are highly technical, down to prescribing analytic techniques and specifying approved processing methods. Specifications for cacao nibs themselves are offered (they may contain "not more than 1.75 percent by weight" of residual shell), as are the definitions of intermediate and end products, including chocolate liquor ("contains not less than 50 percent nor more than 60 percent by weight of cacao fat," among other requirements). There are also standards for breakfast cocoa, sweet chocolate, semisweet or bittersweet chocolate, milk chocolate, skim milk chocolate, and so on.
Most popular, as examination of any candy counter will attest, is milk chocolate, with the semisweet, darker variety a distant second. Milk chocolate's main ingredients, besides the chocolate, are sugar, cocoa butter, and milk; all three may be present in greater quantity than chocolate itself. Semisweet chocolate has a relatively higher proportion of chocolate (a minimum 35 percent chocolate liquor is specified). Both may also contain such optional ingredients as emulsifiers (stabilizers) and flavorings.