Barry Callebaut posts quarterly sales decline amid ongoing cocoa price surge

The Swiss-based Barry Callebaut Group has reported a further sales dip, with volumes for the first quarter of its 2024/25 year being down 2.7, to 565,238 tonnes amid a continued surge in cocoa prices, writes Neill Barston.

As the company asserted, the market remained “highly challenging and volatile,” which it acknowledged had impacted on short-term customer and consumer demand, with considerable concern over supply chain disruption in core market supplying nations of Ivory Coast and Ghana.

Notably, the company stated that Global Chocolate saw a -3.4% volume decrease, in an overall declining chocolate confectionery market according to Nielsen (-2.6%)2. Food Manufacturers (-3.8%) saw slower demand, impacted by ongoing customer-retailer pricing negotiations, some short-term consumer reaction to higher prices and SKU (stock-keeping unit) rationalization. Given the recent cocoa bean price acceleration, customers have been delaying orders.

Volumes also decreased in Gourmet (-1.5%), with limited product availability in North America due to prioritisation following the Mexico quality intervention as well as the effect of SKU rationalisation in Western Europe.

Looking at regional performance within Global Chocolate, Asia Pacific, Middle East and Africa (AMEA, +6.4%) was the strongest contributor. AMEA saw strong growth outside of China, with good momentum in India and Indonesia as well as a robust volume development for Gourmet.

Latin America saw double-digit volume growth (+13.2%) led by Brazil, supported by increased demand for innovation and the strength of a diversified product portfolio. North America reported a volume decrease of -1.9%, impacted by decisive action to temporarily shut down the Toluca, Mexico facility proactively and slower demand for large Food Manufacturers. Central and Eastern Europe (-4.5%) was impacted by lower volumes for several large global and regional Food Manufacturer customers, especially in Türkiye.

Volume development in Western Europe (-7.5%) was partly impacted by the high base of comparison, with a large one-off contract in the prior year. The rest of the decrease was linked to the declining chocolate confectionery market, customer-retailer negotiations and the effect of SKU rationalisation.

Commenting on the situation, CEO Peter Feld said: “Our fiscal year started with cocoa bean prices reaching new highs, creating further market pressure. While we focus on short-term operational priorities in the current environment, the significant opportunity to unlock sustainable profitable growth and value creation is evident. This underscores the rationale for our BC Next Level strategic investment program which future-proofs Barry Callebaut.

“As part of BC Next Level, we completed all social plans in Belgium, the largest part of our restructuring. Over the past few months, we secured additional liquidity through the recent bond issuances. As the market leader, we are pursuing strategic actions to adapt to the higher industry capital base and play a crucial role in sourcing sustainable beans for our customers. We continue to see significant growth potential in the attractive chocolate category.”