Looming major job cuts and supply chain uncertainty underline significant industry tests
Barry Callebaut's recent confirmation of planned job cuts points to wider market challenges. Pic: Barry Callebaut
The news within the past week that Barry Callebaut intends to cut up to 2,500 jobs from its global workforce is something that should not be considered lightly, and serves to underline just how challenging conditions in the market actually are right now.
As the company explained, it is seeking to ‘get back to being a growth business’ – which is notably concerning, as if the largest enterprise in the sector is not presently on an upward curve, then it’s not hard to imagine the picture lower down the chain for small and medium-sized enterprises serving the confectionery, snacks and bakery segments.
It’s not simply Barry Callebaut we’re talking about here, but also factors such as breaking news regarding the sale of Royal Duyvis Wiener to Probat on the cocoa equipment side, as the businesses has faced-up to mounting pressure in turbulent global market, as many manufacturers of medium-size have held off making capital investments in many locations around the world, given the alarming combination of increasing energy operating costs, as well as higher ingredients prices that have impacted global economies.
The ripples of concern have also been expressed in plenty of other quarters – look no further than the latest results from Tate & Lyle and Olam revealing their latest revenues are down amid volatile conditions that have been impacted by wider global affairs within supply chains including the ongoing war in Ukraine and Gaza, as well as wider logistics tests that are adding to the cost of doing business.
Even on the chocolate manufacturing side, the likes of Lindt, Hershey and Mondelez have all acknowledged that the startling rise in cocoa prices this past year – which has translated into major price increases on a retail level (with reports of 50% mark-ups in the UK in December), have impacted on manufacturing operations. Add into this the fact that traditionally strong confectionery markets such as the UK entered recession at the end of last year, with only marginal hopes of improvement for the remainder of 2024, and the picture is one of multiple challenges on the horizon.
But are these collective tests ones that can be overcome? Well, the short answer is yes, probably, with some considerable effort on the part of international economies, yet when a combined perfect storm of conditions align to place strain on established world systems as they have done, there’s little wonder that these are nervous times in many markets. Let us hope for more peaceful and prosperous times arrive sooner rather than later – one thing is clear, that only working in combination can results be achieved for long-term gain for all.
Neill Barston, editor, Confectionery Production
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