Barry Callebaut sells Brach's to focus on chocolate business

By Karen Willmer

- Last updated on GMT

Related tags Barry callebaut Marketing Chief executive officer Executive officer

Barry Callebaut has sold its Brach's confectionery business to
Farley's & Sathers following the slow growth of the US private
label market, the company announced yesterday.

The Brach's business has sales of around $270m (€195m), with sugar candy accounting for 75 per cent of sales and chocolate products around 25 per cent of sales, said Barry Callebaut.

The sale of the business allows the company to focus on its chocolate business and outsourcing, rather than the non-chocolate confectionery.

Barry Callebaut said in July this year that it looked to offload the Brach's business due to unsatisfactory sales performance.

Sales revenue for Brach's was down 4.5 per cent was down 4.5 per cent to CHF760.3m (€460m) for the nine months ended 31 May, compared to CHF796.5m (€481m) the previous year.

"We acquired Brach's because we wanted to get access to the large US retailers and manufacture private label chocolate for the US market," said Patrick De Maeseneire, chief executive officer for Barry Callebaut.

"However the market for private label products in the US has not developed in the same way as in Europe .

Therefore we decided we should concentrate on other priorities like outsourcing and geographical expansion."

Farley's & Sathers has developed its confectionery and gum business in the US with confectionery acquisitions, most recently the Heide business from Hershey and Trolli from Wrigley.

"This addition clearly marks our continued commitment to the candy business, and gives us additional brands with long traditions of quality that perfectly fit our long-term strategy," said Dennis Nemeth, president of Farley's & Sathers.

"In addition to broadening our current portfolio of brands, this acquisition will allow opportunities to increase manufacturing capacity."

The companies expect the transaction to close by the end of November 2007, although do not mention any financial details.

Related topics Markets Chocolate Outsourcing

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