Barry Callebaut reportedly explores plans to split cocoa and chocolate business

The Barry Callebaut group is reportedly considering a major move that could see its global chocolate and cocoa enterprises potentially split, writes Neill Barston.

As per initial reports from Reuters, it has emerged from sources close to the business that meetings are believed to have taken place in recent weeks regarding the future direction of the business.

The company is regarded as the largest combined chocolate and cocoa operation in the world, which has fuelled interest in its future development, given wide-ranging challenges faced by the sector in the past year, has made no formal comment on the situation, other than to state that the group is continuing with its growth plans.

In a related development, Confectionery Production approached the company earlier this summer in relation to reports that the company had been contemplating removing the long-established “Barry” element of the business – which has been in existence since 1996, with the merger of Belgium’s Callebaut, with French cocoa producer Cacao Barry, with both parties having gained well-established heritage within the industry.

The Swiss-headquartered firm responded that it had “no plans at this time to change its name,” noting that there were changes to its gourmet operation that had seen a shift in emphasis of its branding.

Indeed, as our title has covered, a low-key rebranding exercise in late summer saw the company invest in a complete rebrand of its Barry Callebaut chocolate academies, which are now known simply as Callebaut academies, which took place without any formal re-launch.

According to Reuters, the options being discussed by the business had aimed to reduce the company’s exposure to uncertain cocoa prices, which began the year at comparative highs of $12,000 a tonne, before falling back to around half that figure in recent months.

Consequently, as we have reported, the company has explored additional options for its product sourcing, including forming a partnership with Zurich University exploring the use of potential alternative ingredients, such as cell-based cocoa that could help form the basis of fulfilling growing global demand for cocoa and chocolate based ranges.

Moreover, in the wake of that move, Barry Callebaut confirmed a partnership last month with start-up business Planet A, which last year won an award at our World Confectionery Conference, aiming to access development of a wider range of chocolate-linked products that do not use conventional cocoa.

Among those commenting on the situation, Marc Donaldson, a former senior executive with the business, noted on Linkedin that the integrated model to which Barry Callebaut has operated since 2013 when it purchased Petra Foods Cocoa division, has faced notable strain.

He observed the potential gains that main be attained from such a move may come in splitting the chocolate business to insulate it from cocoa market volatility which has dominated headlines this year.

This reportedly sparked a clear positive reaction from investors, with shares uprating by 10% on hearing the news that the move was being considered. However, the company has yet to state an ‘on the record’ position on the potential move.