Barry Callebaut may build new plant in China as country sees chocolate boom

By Douglas Yu contact

- Last updated on GMT

China is one of Barry Callebaut's fastest-growing markets in Asia Pacific. ©GettyImages/BeeBright
China is one of Barry Callebaut's fastest-growing markets in Asia Pacific. ©GettyImages/BeeBright

Related tags: Barry callebaut, Chocolate, China

Barry Callebaut may build another chocolate factory in China as its current 30,000-suqare-meter site in the Suzhou Industrial Park is ‘already operating at near full capacity,’ says the company’s Asia Pacific president, Ben De Schryver.

Even though the current plant still has the capacity to expand with additional production lines, “expanding beyond that is always a possibility, depending on product demands and needs in other geographies within China,”​ De Schryver said.

Barry Callebaut's 2018 initiatives in China:​ 

  • Create new chocolate applications that cater to the needs of local confectioneries.
  • Expansion of e-commerce business to reach out further to new customers beyond the tier-one cities.
  • Launch a series of gourmet products this year.
  • Leverage a broad range of cocoa products to capture new markets.
  • Work closely with more local chocolate manufacturers as their outsourcing partner.

The chocolate supplier, who built its first facility in China 10 years ago with a $20m investment, has experienced double-digit growth over the last three years in the market.

It said the country “has the potential to become one of the biggest chocolate markets in the world.”

“We are already getting some volume outside of China to support the [domestic] growing demands. We expect another double-digit growth in China in 2018,”​ he added.

China’s chocolate industry witnessed a slight rise in sales recently (2% value growth in 2017) thanks to the improvement of the national economy and consumers’ rising disposable income, according to Euromonitor.

During the six-year period (2012 to 2017), the sales value of China’s chocolate increased from 15bn RMB ($2.3bn) to 20bn RMB ($3.1bn).

However, Barry Callebaut says chocolate consumption in China still has “plenty of room to grow.”

“China is still an emerging market, but it is one of our fastest growing markets in Asia Pacific, especially for our gourmet products. Today it is one of our top five gourmet markets in the world,”​ said De Schryver.

Expanding customer base via e-commerce

What makes Barry Callebaut confident about the outlook of China’s chocolate market is more than just its sheer size, the company said.

“China is also the largest and the most innovative e-commerce market in the world,”​ De Schryver told ConfectioneryNews. “It helps that China e-commerce sites are driven by content, participation by key influencers and fulfillment managed by huge distribution channels.”

“We are already seeing the rapid growth of sales of our chocolate products on our online platforms. We are expanding our presence and content in Tmall (天猫) to other popular e-commerce and social media sites including JD.com (东), XiaChuFang (下厨房), XiaoHongShu (红书), and WeChat (微信),”​ he added.

These channels have helped Barry Callebaut reach customers beyond tier-one cities (Shanghai, Beijing and Guangzhou), doubling its online sales in China in the last 12 months, the company said.

Local producers show interest

While some of the biggest western brands – Mars, Ferrero and Nestlé – account for the majority share of China’s chocolate market, local producers are showing stronger interest in collaborating with Barry Callebaut.

“We’ve observed that domestic chocolate producers are more willing today to be more innovative (co-creation of new products) and prepared to focus on their core competencies, thus even ready to outsource chocolate production to Barry Callebaut,”​ said De Schryver.

Barry Callebaut chose Shanghai as the venue for its global launch of Ruby Chocolate​ in September 2017, which was first adopted by Nestlé Japan’s KitKat​ recently. 

Related topics: Business

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