Barry Callebaut shifts focus to non-cocoa products due to high market prices
Despite the focus shift, Barry Callebaut remains optimistic about the long-term resilience of the chocolate category.
SWITZERLAND – Barry Callebaut, a giant manufacturer of high-quality chocolate and cocoa products, has announced plans to shift focus to non-cocoa products as cocoa prices rise.
During the earnings call of the Q1 financial report, the company stated that efforts to deal with high cocoa bean prices include creating non-cocoa products through precision fermentation and sourcing cocoa from South America.
Peter Feld, Chief Executive Officer, said, “We are expanding our full range of chocolaty experiences beyond the chocolate offerings into compounds and also into non-cocoa alternative offerings.
“We have just launched in the UK, as well as in the Benelux (Belgium, The Netherlands and Luxembourg), our non-cocoa solutions from precision-fermented sunflower seeds offerings that expand the portfolio of Barry Callebaut and offer all the variety of chocolaty experiences for our customers.”
The shift is due to cocoa bean prices rising recently due to poor crops in Ghana and the Ivory Coast, the two leading countries for sourcing cocoa beans.
Barry Callebaut records 2.7% decrease sales in FY 2024
Recently, the company recorded a 2.7% decrease in sales impacted by customer-retailer pricing negotiations, delayed orders and Stock Keeping Unit rationalisation, resulting in a market decline in the FY 24/25.
The company reported sales volume of 565,238 tonnes during the first three months of fiscal year 2024/25, which ended on November 30, 2024.
Sales revenue amounted to CHF 3,449.8m (US$3819.11m), an increase of 63.1% in local currencies and 53.9% in CHF (Swiss franc).
This increase was driven by Barry Callebaut’s cost-plus pricing model as the business passed through the significantly higher cocoa bean price to customers.
The company also confirmed its FY 2024/25 outlook for double-digit EBIT recurring growth in constant currency. Given the impact of further market volatility, sales volume guidance was lowered to a low single-digit decrease.
Barry Callebaut Group’s CEO Peter Feld said, “Our fiscal year started with cocoa bean prices reaching new highs, creating further market pressure. While we focus on short-term operational priorities in the current environment, the significant opportunity to unlock sustainable profitable growth and value creation is evident.”
Well-positioned as market leader with the cost-plus model, planning additional actions to increase returns on a higher capital base, access to sustainable beans for customers is the next level for unlocking Barry Callebaut’s full potential.
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