Barry Callebaut wants to tap into vegan power, Asia growth
Source: AFP
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Barry Callebaut, the world's largest industrial cocoa and chocolate manufacturer struggles, said Wednesday it aims to double its business in Asia as well as its specialties unit as it seeks to move on from a salmonella outbreak at a major facility.
The new chief executive unveiled new four strategic priorities for the Swiss-based firm which supplies such food industry giants as Hershey, Nestle and Unilever as he met with investors at a special London event.
Doubling sales in the specialties business, which includes gluten-free and vegan products, was one of the four priorities listed.
Another was to double business in the Asia-Pacific region, which Barry Callebaut said was set to be the scene of major growth due to demographic trends as well as investments from its consumer goods partners.
The firm also aims to deepen its partnerships with its major clients, as well as boost its gourmet offer for artisanal chocolate makers and food services customers. ur purpose is to create the world's best chocolate solutions for our customers -- now and in the future," said chief executive Peter Feld in a statement.
Feld took over the reins in April, less than 10 months after it closed a site in Belgium -- the world's largest chocolate-making plant -- for six weeks to clean up a salmonella contamination.
The company also released results for its fiscal year that ended on August 31.
Like many companies that sell consumer goods, Barry Callebaut saw its sales volumes dip even as revenue rose due to the impact of higher prices dampening consumer demand.
Sales volume declined by 1.1 percent while revenue climbed to 8.47 billion Swiss francs ($9.3 billion).
Net profit rose by 3.4 percent to 443.1 million Swiss francs.
Long and bumpy road
The company said the new strategic priorities would take some two years to implement.
It expects sales volumes to remain stable in this fiscal year and a modest increase in 2024-2025. After that it targets growth in sales volumes on the order of one to five percent.
Analysts welcomed the company detailing its plans for returning to growth, but said factors such as morose consumer sentiment and high cocoa prices as well as the need to make the business more sustainable will make it challenging.
"The task facing the new management team is enormous," said analysts at Swiss asset manager Vontobel.
"The road will be long and bumpy, given the current environment and the increasing sustainability requirements in the coming years," they added.
In May, Barry Callebaut said it was delaying its goal to sustainably source 100 percent of its cocoa and other ingredients by five years to 2030.
The company had adopted in 2016 an ambitious plan to eradicate child labour in cocoa plantations and lift 500,000 farmers out of poverty by 2025, as well as aiming to use completely sustainable ingredients by this date.
Shares in Barry Callebaut were up 6.1 percent in early afternoon trading, while the Swiss stock exchange's broader SPI index was up 0.3 percent.
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Source: AFP
