Cargill bolsters EU chocolate position on new German deal
this week to buy industrial chocolate facility Schierstedter
Schokoladefabrik from existing customer, Ludwig Schokolade,
writes Lindsey Partos.
Located in Klein Schierstedt in eastern Germany, the acquisition builds on Cargill's entry into the European market in October 2003 when the private firm bought French cocoa and chocolate ingredients company OCG Cacoa.
Described at the time as a 'strategic fit', the purchase marked Cargill's first major investment in chocolate manufacturing.
Since then, Cargill has bought two cocoa processing activities in the York, UK and Hamburg, Germany from number one food maker Nestlé.
Through the addition of an industrial chocolate facility the deal brings a stronger market position to the ambitious private US firm.
"This acquisition will greatly strengthen our position in the German industrial chocolate market and grant us access to customers throughout central and eastern Europe," comments William Shaughnessy, head of Cargill's chocolate business in Europe.
The US agri-giant said it plans to "invest significantly" in the facility, probably through a rise in production capabilities and expansion of specialty product lines.
A further attraction for the deal, claims Cargill, is SSF's product range that "complements Cargill's own portfolio and will provide us with a much wider variety of solid chocolate products."
While a relative newcomer to the EU chocolate market, currently dealing with stagnant sales on growing health concerns, Cargill has been producing industrial and gourmet chocolate in the USA for several years under its Wilbur and, more recently, Peter's brands.
Eating their way through about 10 kilos of chocolate a year, the British are Europe's number one chocolate consumer followed by Germany and France with 8.3 and 5.8 kilos respectively.
But according to Datamonitor, the pace of growth in the market is slowing down, starting in 2004 when overall chocolate volume sales rose by less than 1 per cent to 605m kg.