Barry Callebaut posts revenue upturn amid challenging global market conditions
Peter Feld, CEO of Barry Callebaut, welcomes improved quarterly results, yet acknowledged market challenges. Pic: Barry Callebaut
The Swiss-headquartered Barry Callebaut Group has released its latest quarterly figures revealing revenue gains of 14.1%, to CHF 2.2 billion driven by adjusted cocoa pricing, and an increase in sales volumes, rising 0.4% to 580,876 tonnes, against a ‘challenging and declining’ chocolate market, reports Neill Barston.
According to the company’s CEO, Peter Feld, he observed that a number of tests remained in the sector, noting that the company has continued to place a strong emphasis on delivering customer service around the world, reflected by its BC Next Level programme centred on moving its operations closer to its markets and international clients.
According to its first three-month data from the 2023/24 financial year, the company grew its chocolate business by 0.7%, but acknowledged ongoing wider challenges, including the price of cocoa rising by 68% last year, as well a major upturn in sugar prices, rising 40%, which placed further pressure on the wider industry as it seeks to maintain its cost margins. The company also noted that it had still had residual impact on limits of product availability in the wake of a salmonella incident at its core Wieze factory in Belgium, which had resulted in operational enhancements to its manufacturing.
Moreover, the business noted that there was ‘suppressed volume performance’ that arose from weak growth within the FMCG market, owing to corporate customers managing account inflation, linked to the ongoing cost of living crisis that has left many consumers around the world with limited spending power.
It sounded a note of optimism, as it asserted that it had gained some additional market share from shifting towards private label products through its diversified business model, which it said was reflected in results that showed a decline in output for the food manufacturers market of 0.8%, while its gourmet and specialities areas of focus improved by 9.1% over the previous year.
As the business noted, in the regions, compared to Q1 2022/23, Western Europe volumes (WEU) grew +4.7% and in Central and Eastern Europe (CEE) increased +1.8%. In North America (NA), volume declined -4.0% and in Latin America (LATAM) volume declined -1.3%. In Region Asia Middle East and Africa (AMEA) volume declined -1.5%. Sales volume in Global Cocoa declined -1.1%.
Peter Feld, CEO commented on the results. He said: “We are focused on delivering on our promise to offer the best chocolate solutions and best in-class services to our customers globally every day. This is key for our future and for our performance in the current challenging market environment.
“At the same time, we are investing in areas most important for our customers which will make Barry Callebaut stronger and more resilient with our strategic investment program, BC Next Level, which positions the Group for sustainable profitable growth and allows for a more attractive financial profile. The implementation of BC Next Level is well underway with our new operating model announced and new leadership team in place and the majority of the planned measures already initiated.”