Barry Callebaut reports solid Q1, confident on chocolate recovery

And CEO of the Swiss chocolate maker, Antoine de Saint-Affrique,  says he expects the market to continue to recover as sales volumes increased to 532,165 tons in the three months from September to November.

Sales revenue has been impacted by lower cocoa and raw material prices and declined 0.7 percent to 1.872 billion Swiss francs (US$1.96 billion).

“We had a strong start to the new fiscal year, with significantly above market growth. I am pleased to see that our increase in volume is broad-based, with positive contributions across all regions and good momentum amongst all key growth drivers,” said de Saint-Affrique.

Barry Callebaut says volume growth was fueled by all regions and product groups and all the key growth drivers contributed to the market outperformance – Gourmet & Specialties (+8.9 percent), Emerging Markets (+11.1 percent) and Outsourcing (+8.1 percent).

Last September, Barry Callebaut unveiled the fourth type of chocolate, Ruby, made from the Ruby cocoa bean and through unique processing the company has unlocked the fruity flavor and vibrant color of Ruby, naturally present in the cocoa bean itself.

And just last week Barry Callebaut and Nestlé partnered for a world first – Japanese KitKat is the first consumer brand to launch a Ruby chocolate version named KitKat Chocolatory Sublime Ruby.

Nestlé Japan Ltd launched the Ruby chocolate version of its iconic KitKat brand in KitKat Chocolatory stores in Japan and South Korea, as well as online, and according to Barry Callebaut, this means it will be available in more countries.

 

KitKat is the first to offer this fourth type of chocolate to consumers, just five months after Ruby chocolate was first launched in Shanghai by Barry Callebaut.

“Having a brand adopt and bring it to the market is extremely exciting. The Nestlé team in Japan and South Korea were the quickest to catch onto this trend,” Christiaan Prins, Head of External Affairs at Barry Callebaut, told FoodIngredientsFirst.

“With the launch being in Shanghai last year, which could well be why there is an extra appetite from Asian countries. But ultimately, it’s about who is the quickest to adapt and integrate Ruby into their brands, and this case it was Nestlé in Japan and Korea.”

In terms of Barry Callebaut’s outlook, de Saint-Affrique says the company is on track to deliver on its mid-term guidance for average volume growth of 4 percent to 6 percent.

“We have good visibility on our sales portfolio and expect the market recovery to continue,” he said. “This, along with the diligent execution of our ‘smart growth’ strategy, gives us the confidence that we are on track to deliver on our 2018/19 midterm guidance.”

Strategic milestones in the first three months of fiscal year 2017/18
In terms of expansion, Barry Callebaut completed the acquisition of D'Orsogna Dolciaria in Italy, last October, and Gertrude Hawk Ingredients in the US in December, further expanding Barry Callebaut’s value-adding Specialties & Decorations business.

Barry Callebaut also announced investments to increase its chocolate production capacity globally and in particular in Western Europe over the course of the coming year. In addition, the company says it is planning to build a global Center of Expertise for its Decorations business in Halle to co-develop decorations with customers and technologies with third parties.

Aside from the huge unveiling of Ruby chocolate, Barry Callebaut’s other innovations include partnering with the start-up company Solo Gelato. Barry Callebaut announced its intention to launch a novel capsule system for instant-fresh ice cream. This product will be released on the global market in the second half of 2018.

In December 2017, Barry Callebaut published its Forever Chocolate progress report 2016/17. The company worked globally with over 157,000 farmers on good agricultural practices. Approximately 36 percent of all cocoa and 30 percent of other chocolate ingredients were sustainably sourced in fiscal year 2016/17.

Barry Callebaut has further developed its Farm Services program, which offers cocoa farmers products and services that help improve their productivity. In Ivory Coast, participating cocoa farmers experienced on average a productivity increase of 23 percent per hectare of farmland.

And in November 2017, Barry Callebaut was one of the signatories of the landmark Cocoa and Forests Initiative’s Frameworks for Action, uniting governments, industry and NGOs to eradicate deforestation from cocoa production in Côte d’Ivoire and Ghana.