Barry Callebaut reports ‘solid performance’, investment programme key to future success

The global chocolate business delivered +1.0% volume growth, ahead of a declining global chocolate confectionery market according to Nielsen (-2.0%).

Food Manufacturers continued to be impacted by soft consumer demand held back by high-inflation.

Barry Callebaut was able to mitigate these pressures as it was able to meet the consumer shift towards private label chocolate offerings. The gourmet & specialties division recorded high single-digit volume growth, with continued strong demand across regions, supported by BC Next Level initiatives.

Volume growth was described as positive in most global chocolate regions.

The largest contributor to global chocolate volume growth was Western Europe (+2.2%), as the business captured the consumer shift to private label products and gourmet saw solid demand.

Central and Eastern Europe (+3.5%) also saw a robust performance, led by a recovery in food Manufacturers volume in Turkey and South East Europe as well as strong momentum for gourmet.

Volume growth in Latin America accelerated in the second quarter, leading to +6.2% in the first half, led by gourmet in Brazil.

Sales volume in North America declined (-1.9%), as weaker consumer sentiment impacted food manufacturers in the region, while gourmet saw solid demand.

Barry Callebaut launched its strategic investment program, BC Next Level to move closer to customers and markets and simplify and digitalise the front and back ends of its business.

The group believes the positions it for sustainable profitable growth. Barry Callebaut is reporting implementation of the programme as progressing as planned.

The company is building a centralised global end-to-end supply chain, with a dedicated customer innovation organisation already launched. Barry Callebaut is also centralising all enabling functions to step change standardisation and digitalisation.

Significant progress has been made to simplify the portfolio, with around 10% of SKUs already phased out and the remaining reductions identified and scheduled to be discontinued to reach the at least 30% planned total reduction.

As a result of moving to a more effective operating model, optimising the manufacturing footprint and creating a step change in digitalisation, the group expects to reduce costs by approximately 15%, excluding raw materials.