Swiss firm Barry Callebaut, the world's largest chocolate maker, is to cut around 100 jobs at its production site in Dijon, France.
The pod-to-pallet supplier of cocoa products cited the loss of two significant orders for the impact on the Dijon site.
Hit by the slowdown in chocolate consumption due to a contraction in European economies, volumes at the Dijon site are expected to decline by March 2009, said the company in a statement sent to ConfectioneryNews.com.
At a meeting with employees on Monday, management at the Barry Callebaut plant added that the reduction in volumes was 'general' for the industry as a whole across Western Europe. For the period 2007 to 2008 the chocolate market "had stagnated" and could fall in 2009, the firm added.
The management told meeting attendees that since Barry Callebaut had taken over the Dijon site in July 2007 it had invested about €10 million. Further, in order to confront the contraction in volume demand the firm said it would: reinforce competitivity at the plant; intensify research for new markets; and pursue qualitative efforts.
Last week the Zurich-based company announced a 4.1 per cent drop in sales volume in Europe to 230,824 tonnes for the three months to 30 November 2008, compared to the same period in the previous year. Total sales revenue for the period rose to CHF1.43 billion €0.95bn), a wisp above CHF1.42 billion recorded a year earlier.
Revenue from emerging markets
Faced with western European and North American markets that continue to drop in pace, Barry Callebaut, like all other major confectionery players, are continuing to look to emerging markets to support longer term targets and to generate strong revenue.
Earlier this month, for example, the Swiss firm unveiled a new chocolate production facility in Mexico, its third largest plant in the world.
Expanding in step with its customers, Barry Callebaut invested about €30m in the new industrial chocolate facility, based at Monterrey in the north-eastern Mexican state of Nuevo Leon.
"Chocolate confectionery in Mexico is expected to grow on average by 6.5 per cent per year in value terms over the next five years," said Patrick De Maeseneire, CEO of Barry Callebaut, citing figures from market researcher Euromonitor.
With an annual capacity of around 100,000 tonnes, Callebaut’s new Mexican facility will supply Central and South American chocolate markets previously fed by the firm's facilities in North America.
Sourcing some cocoa from Brazil, but also from Africa, the supply needs will "depend on the recipe of the customers, who are a mixture of international and local players," Josiane Kremer from corporate communications at Barry Callebaut recently told ConfectioneryNews.com.