US and China lead choc market recovery, Barry Callebaut

By Jane Byrne

- Last updated on GMT

Related tags Europe Barry callebaut

Recovery in the chocolate market is underway in the US, Brazil and China but Western Europe has been slow to rebound and Eastern Europe still shows negative growth rates, said Barry Callebaut as it released robust full year results for 2010.

Until April 2010, the global chocolate confectionery market was flat in volume terms.

Thereafter, it began to recover in some regions but, with a slight plus of 0.3 per cent, it still has not returned to its previous long-term average growth rate of 2 to 3 per cent per year,”​ notes the leading industrial chocolate supplier.

And the Swiss company stressed though that it expects raw material prices to stay above the historical averages and to remain volatile.

Barry Callebaut said that some markets recorded attractive growth rates, such as the US (+2.7 per cent), Brazil (+3.5 per cent) and China (+8.2 per cent), while growth in Western Europe was still low (+0.9 per cent) and Eastern Europe, particularly Russia, continued to suffer (-5.3 per cent).

Nevertheless, the chocolate supplier reports that its net profit rose to CHF252m (€183m), while sales were up by 6.8 per cent at CHF 5,213.8m, driven by a higher sales volume and higher average raw material prices.

“We have managed to deliver top results. Market conditions were challenging with a still rather fragile world economy, a flat global chocolate market, high raw material prices and important currency fluctuations,”​ company CEO Jürgen Steinemann stated.

In September, the Swiss group signed a long-term supply agreement with US food group Kraft Foods. Under the terms of the deal, Barry Callebaut is set to deliver the majority of the food manufacturer’s cocoa products and industrial chocolate requirements around the world.

And the supplier, which is based in Zurich, reports that implementing existing outsourcing volumes and strategic partnerships as well as securing further outsourcing deals with food manufacturers will remain an essential part of its business strategy.

With regard to the economic situation, Barry Callebaut said it is cautiously optimistic.

“We believe that growth will continue to pick up, albeit with geographic variations. As a consequence, we assume that the global chocolate market will grow by approximately 1 to 2 per cent - still below the long-term average of 2 to 3 per cent per annum.”

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