Barry Callebaut’s annual sales volumes remain flat for second year amid core market challenges
pic: Barry Callebaut
Barry Callebaut has reported its latest annual results revealing flat sales volumes for the second year in a row, at CHF 2,279 million tonnes, yet recorded a 22% upturn in revenues to CHF 10.3 billion from its global operations, reports Neill Barston.
Consequently, net yearly profit for the Swiss-headquartered global firm stood at CHF190 million, down 53% from 443 million in 2023, as the sector has continued to face a raft of challenges including unpredictable cocoa crop yields and loss from diseases that led to industry-wide supply deficits.
In response, CEO Peter Feld praised its international teams amid what he described as “an unprecedented cocoa supply and demand environment,” as prices on commodities markets peaked at around $12,000 a tonne earlier this year, placing significant strain on confectionery supply chains.
As the company previously stated earlier this year, it outlined rationalisation plans that are estimated to see a total of 2,500 jobs being lost from the business across its global business during the next year, as the company embarks on a period of major reorganisation.
Peter Feld said: “I want to thank the entire Barry Callebaut team for their hard work and dedication throughout this special year, demonstrating strong resilience with the Full-Year 2023/24 results.
“Our teams faced an unprecedented cocoa supply and demand environment, while delivering our BC Next Level strategic investment program to boost services for our customers globally and improve ways of working within the company. At the same time, we have adopted a new rigor to focus on what matters most to customers and implemented major improvements to step change our performance. While we anticipate continued sourcing and subsequent market challenges in the near-term, we are focused on executing our BC Next Level investments to unlock our full potential to deliver the world’s best chocolate solutions for our customers.”
According to the company’s results, the company’s global chocolate business saw an improvement of 0.3%, which stood against a declining wider market of 1.1% according to industry data, as the business saw volumes for food manufacturers also reduce by 1.5%, which it said had been off-set by gains made within private label markets, which have continued to gain traction around the world.
There was also encouraging news within its gourmet division, which reported 9.8% growth, and there was also an improvement for its Middle East and Africa region, which was up by 5.2%, with the business opening key chocolate academies in Dubai and Morocco.
Meanwhile, in Latin America, there was volume growth of 7.2%, driven by Brazilian markets, while North America saw volume declines of 1.8%, despite the company having a strong presence in the region as displayed with its performance at Sweets & Snacks Expo. The company’s global cocoa results saw a 1.4% drop in sales volumes, related to major increases in cocoa prices, with cocoa butter and liquor also being impacted by constrained supplies.
BC Next Level
As the company added, significant progress has been achieved into what it has termed its “BC Next Level” initiatives that have been focused on digitalisation and standardisation across the business.
Furthermore, the company added that the optimisation of its manufacturing network is making headway, with closures have been completed for the factories in Norderstedt (Germany) and Port Klang (Malaysia). In addition, the intention to close the site in Intra (Italy) was announced in early September and the negotiations with the social partners are ongoing.
Moreover, as part of the rationalisation, the company’s portfolio has seen a reduction of around 25% of its SKUs are being phased out, against a target of at least 30%. As part of this, its Barry Callebaut Operating System, was launched to standardise factory operations and connect processes globally, setting clear KPIs for all factories, with additional measures to safeguard food safety being delivered.