Confectionery sector shows solidarity with Ukraine through continuing aid measures
The Russian invasion of Ukraine has sent major shockwaves of concern around the world. Editor Neill Barston assesses the ongoing impact on global confectionery manufacturing, product sales and supply chains.
As world headlines have continued to be dominated by the invasion of Ukraine by Russia over the past month, the true extent of its fast-spiralling impact is still under evaluation.
From the humanitarian aid being dispatched from aid agencies including the British Red Cross assisting 10 million displaced civilians fleeing the war, through to manufacturing grinding to a standstill amid the chaos, it remains deeply troubling situation.
Despite the unprecedented multi-billion economic sanctions placed on Russia in a bid to prompt de-escalation of the conflict, at the time of going to press, a clear resolution appeared no closer.
In terms of its most prominent implications for industry, major confectionery manufacturers including Mars, Mondelēz and Nestlé have confirmed they have temporarily ceased production in the region as the situation rapidly deteriorated.
There have been numerous other impacts including on ingredients supply chain, with a quarter of the world’s wheat being sourced from Russia and Ukraine. Moreover, energy prices have also been heavily affected due to the ongoing war.
Consequently, there has been significant pressure from protest groups and organisations upon key businesses operating in a number of sectors including sweets and snacks markets to respond in terms of reducing or exiting activity in Russia.
As Confectionery Production reported, the CEO of Mars, Grant F Reid, issued a personal plea for peace in the region, as the business upped its original bid for aid to $10 million.
However, despite scaling back on its operations in Russia, where it employs 6,000 people, some observers believed the firm – and other major corporations – had not gone far enough in restricting activities that may result in taxes ending up in Russia.
US-based Mars has facilities in Ukraine’s capital Kyiv, employing more than 170 associates, including within its confectionery operations, and the business said its focus was on supporting them through the crisis.
Businesses back aid
Within the UK, there have been some notably prominent efforts to support humanitarian aid causes. This includes Montezuma’s Chocolates in West Sussex, which has backed the Children on the Edge charity’s Ukrainian refugee campaign, while Love Cocoa offered a weekend’s worth of online profits towards the British Red Cross’s work with the conflict.
Among the most eye-catching shows of support has been Baravelli’s of Conwy confectionery, which designed a giant Easter egg for a prize draw in support of Ukrainian aid.
“On the first day alone over £1000 was raised and we continue to be amazed by people’s generosity. We have all seen the devastating and heart-breaking scenes coming from Ukraine.”
Other global businesses have taken significant steps, including Ferrero, which has paused development activity in Russia, Unilever suspending exports and imports into Russia, Pepsi ceasing drinks sales, and McDonalds temporarily closing 850 restaurants in the country. For its part, Cargill has also confirmed scaling back activity.
Significantly, Swiss chocolate manufacturer Lindt & Sprungli confirmed it has halted exports of its premium brand ranges to Russia in light of the ongoing situation.
Notably, following calls from Ukraine’s president Volodymyr Zelensky directly to Swiss firms to take greater action, Nestlé confirmed it would temporarily cease sales of many of its core product lines. This includes the company’s iconic KitKat brand, which remains one of its biggest global assets.
“As the war rages in Ukraine, our focus will be on providing essential food, not on making a profit,” Nestlé told the BBC, which has limited itself to sales of essential items such as baby products.
Major company action
Significantly, another of the biggest players in the market, Barry Callebaut state it would suspend its capital investments in Russia, though it has continued trading in the region.
The global cocoa and chocolate business said it had been ‘profoundly impacted’ by developments in the past few weeks, with many of its colleagues contributing towards humanitarian aid causes supporting the Eastern European crisis.
As recently reported, Barry Callebaut opened its third manufacturing facility in Russia, at Kaliningrad, employing around 40 people. The business asserted that such facilities operate as part of essential daily food supply chains.
Furthermore, it Swiss-headquartered firm also operates a chocolate academy in Moscow, offering training to chocolatiers, which is also remaining open.
The company said: “We are profoundly impacted by the images of people having to leave behind their homes, families, and friends due to the military attack on Ukraine. Many of our colleagues have family and friends in Ukraine, and their stories are hitting very hard. Our company, and many of our colleagues, are supporting organisations addressing the humanitarian needs of all people affected by the conflict, inside and outside of Ukraine.”
For its part, Mondelez pledged to scale back its operations in the region – with the business also operating facilities directly within Ukraine. It added there would be further financial support for local employees.
In a statement, the company said: “The safety of our colleagues is our number one priority, and we are focused on ensuring our colleagues in and around Ukraine are safe and cared for during this difficult time. We’ve paused our operations in the country and are supporting our people and providing humanitarian aid in the region,” explained the business, which has also offered a $500,000 donation through both financial and in-kind contributions.
Also in the US, Hershey explained that while it had no direct operations in either Ukraine or Russia, the company was deeply concerned, describing the situation as ‘heartbreaking.’
“We understand that we live in a highly interconnected world and these tragic events are affecting people across the region. All distribution of Hershey products into Russia, which is managed through distributors, was ceased weeks ago,” explained the company, adding that it was donating to UNICEF and Project Hope care organisation providing on-the-ground assistance as the conflict continues.