We’ve delved into the ConfectioneryNews archives to chart newly built factories and major investments on existing plants by the industry’s major players over the past five years to discover where capacity is moving.
Thirty-nine new plants and upgrades from the top five players: Mars, Mondelez, Nestlé, Hershey and Ferrero, as well as the world’s largest cocoa processor Barry Callebaut, show that production is moving to the developing Asia Pacific and Latin American markets.
Asia Pacific, Latin America and China
Asia Pacific was home to 18 of the major investments over the period, followed by eight in Latin America.
Developed markets by comparison saw far fewer investments with four in North America and just three in Western Europe.
On a country-by country basis, China had the greatest number of investments in added manufacturing capacity followed by Mexico and the US.
In our analysis we have included capacity added through acquisitions, factories currently under construction and major upgrades ($20m plus) to existing plants.
Barry Callebaut: Petra Factories and Latin America
Barry Callebaut was the most active confectioner in investing in new production capabilities from 2009-2013.
It acquired eight factories from Petra Foods ingredients division when a $950m deal was finalized earlier this year. The factories are in Malaysia, Indonesia, Thailand, Brazil, Mexico, Germany and France.
The company has also invested heavily in Latin America, including two factories in Mexico. The first, in the state of Nuevo Leon , opened at the end of 2008, just before our 5-year time frame - but since it was so new, it was included in our analysis.
The firm also opened a new $15m in Extrema near Sao Paulo in 2010 to capitalize on the rapidly growing Brazilian market.
Mars: Russia and US
Mars’ biggest outlays have been in Russia , where it opened a $107m factory in the Ulyanovsk region in June 2010, and in the US where it is constructing a $250m plant in Topeka , due to be operational this year.
The world’s joint largest confectioner has also made a $53m upgrade to its Ballarat plant in Australia, while the firm’s gum subsidiary Wrigley recently opened its largest factory in Guangzhou, China with an investment of over $173.4m.
Mondelez: Cadbury factories in India
Mondelez made two major investments in new plants in India, where it dominates the market through Cadbury.
It began production at the Himachal Pradesh plant in Northern India in March 2010 and earlier this month said it would pay $163m for another new factory in Andhra Pradesh , Southeastern India, which will be fully operational by 2020.
Mondelez’s other investments have come in its biscuit category. It is planning the world largest cookie factory in Mexico worth $350m, due mid-2014, and is spending $85m to expand a biscuit plant in Suzhou, China.
Hershey: US upgrade and eyes on China
Hershey has laid all of its eggs in one basket for the time being. It recently opened its expanded chocolate factory in West Hershey, PA after a $300m investment under its Project Next Century program, doubling the size of the factory, which was built in 1991.
However, the company has signaled intent to build another factory in Asia , with China the likeliest destination, after its current Chinese plant, held in a joint venture with Lotte, reached capacity. We’ve included the planned Asia Pacific factory in our regional chart, but not the country breakdown.
Nestlé: China JV
Nestle acquired four large scale plants when it acquired a majority stake in Chinese confectioner Hsu Fu Chi in 2010.
It also opened a new $136m manufacturing facility in Dubai which is set to become the third largest Kit Kat plant worldwide.
Ferrero: Three developing markets
Ferrero has plucked for investments in three emerging confectionery markets.
The company’s other major investment is a $190m production plant in Mexico - its first in the country – which starts production this year.
In 2011, Ferrero also unveiled plans to build a factory in the Maharashtra region of India, another booming chocolate market.