Cocoa processing generates by-products such as pod husks, pulp, and bean shells. Among these, cocoa bean shells (CBS) stand out as a significant by-product, comprising approximately 10% to 17% of the total weight of cocoa beans. These shells are typically separated from the cocoa beans before or after roasting. A large amount of waste can be produced during the mass processing of cocoa beans; in one year, the world has 700,000 tons. CBS contains various nutrients and beneficial compounds, including approximately 50% dietary fiber, proteins, minerals, vitamins, volatile compounds, and various polyphenols. The objectives of this review encompass assessing the potential of CBS as a valuable ingredient for developing functional foods and beverages. Our methodology involved a comprehensive literature search across multiple scholarly databases, focusing on journal articles exploring CBS utilization in functional foods and beverages. The results reveal CBS as a promising by-product with significant opportunities for value addition, presenting itself as a potential functional ingredient for food and beverage applications. However, the limited literature on developing CBS-based fermented beverage products akin to kombucha and kefir underscores the need for further research to explore their untapped potential fully.