Partnership completed between Barry Callebaut and Hershey
Hershey in North America within the next few months, following the
completion of the partnership this week.
The deal was announced in May for the company to provide Hershey with 80,000 tonnes of chocolate per year. This forms part of both companies' strategies for expansion across North America, the two companies said in a statement this week. "We look forward to working with Barry Callebaut to expand our growth in the global chocolate market," said Richard Lenny, chairman and president of Hershey. "Barry Callebaut is a worldwide leader in premium chocolate and innovation, and this alliance provides Hershey with immediate access to these capabilities." The alliance follows Barry Callebaut's strategy to take advantage of the ongoing outsourcing trend. The company said that there is a trend towards manufacturers outsourcing their chocolate needs to specialised partners - and this is expected to accelerate as more integrated companies shift their focus towards sales and marketing and source from third parties. "The agreement will transform our business in the Americas by significantly increasing our production capabilities for chocolate and by optimising our operational setup in the region," Barry Callebaut's chief executive officer Patrick De Maesneire said. "The transaction is again evidence of the ongoing outsourcing trend in the chocolate industry, which I think is only just beginning." In April, De Maesneire said that the new outsourcing projects are giving Barry Callebaut confidence that it will achieve its 3-year financial targets through to 2007/8. The company said this week that it will start to operate the leased chocolate-making equipment at the Hershey factory at the start of September, producing chocolate ingredients for Hershey products. Barry Callebaut will also build a factory in Mexico to supply liquid chocolate to Hershey. It expects this to be operational by summer 2008. Last month, the company said it will open a new head office in Chicago and appointed a new senior management team for the region. "Barry Callebaut is committed to becoming the No. 1 industrial chocolate manufacturer in the United States," said Massimo Garavaglia, president of Food Manufacturers and Gourmet & Specialties North America for Barry Callebaut. Both Barry Callebaut and Hershey said the companies will work together on sustainable environment programmes, including the World Cocoa Foundation's Sustainable Tree Crops Program. In the fiscal year ended 31 August 2006, Barry Callebaut had sales of about CHF4bn (€2.4bn), and it currently operates in 23 countries worldwide. Hershey claims to be the largest North American manufacturer of high quality chocolate and sugar confectionery products with revenues of nearly $5bn (£3.6bn).
