As private label sales rise amid the economic downturn, Zurich-based Barry Callebaut joins forces with Spanish food group Natra in a move that sees the Swiss group integrating Stollwerck, its European consumer chocolate business, into Natra.
The combined business will have estimated annual sales of €850 million (CHF1.2bn), and on pro forma figures for 2008, a two per cent share of the European cocoa and chocolate market and about 215,000 tonnes in production output.
The deal, that sees the world's largest chocolate maker Barry Callebaut, moving closer to becoming a pure-play B2B chocolate manufacturer, would enable Natra to 'secure future growth in consumer private label and third-party branded chocolate' and allow the Swiss group to focus on its industrial and artisanal customers.
Private label brands have gained momentum in recent years, expanding their share in EU member states, with as much as 40 per cent market penetration in some markets, according to recent data from the European food and drink trade association CIAA.
Driving growth further, in recent months private label sales have picked up velocity, as consumers on tighter budgets eke out savings in their shopping bills.
The deal terms
Under the transaction, subject to certain conditions, Barry Callebaut would take a minority stake in the new Natra and the Valencia-based firm would reduce its investment in health-geared firm Natraceutical, in which is currently has a 50.3 per cent stake, to less than 50 per cent.
The deal, said the two chocolate firms, would also lock-in supplies of a key chocolate ingredient to Natra under a 'significant, long-term outsourcing contract' through which Barry Callebaut would supply a minimum volume of 85,000 tonnes per year of liquid chocolate to Natra.
Both the chocolate firms are looking for a completion of the deal by summer 2009, but details of the final structure need to be hammered out.
Among a raft of conditions to clear, such as satisfactory due diligence and secured future financing of operations, the transaction is also subject to approval from Spain's stock market watchdog CNMV.