Barry Callebaut moves beyond chocolate to drive growth

Barry Callebaut strategy: overview

• Barry Callebaut is prioritising ten markets, gourmet and specialties
• Focus for Growth targets stronger service, quality and execution
• Solutions-led innovation aims to increase margins and customer loyalty
• Market share recovery should support medium-term volume growth targets
• Premiumisation and gourmet expansion are expected to drive profitability

Barry Callebaut has embarked on what CEO Hein Schumacher calls a complete reset, as the world’s biggest chocolate maker plots a return to growth.

The much-needed move follows years of operational disruption, leadership turnover, quality control issues, and cocoa market volatility.

But what does a complete reset actually look like? Schumacher revealed all at the Barclays 19th Annual Global Consumer Conference in Boston.

Restoring the fundamentals

Schumacher identified three key challenges facing the business when he first joined back at the beginning of the year:

• A lack of clear priorities
• Fundamentals not correctly ordered
• Poor quality control

As a direct result of this, he implemented Barry Callebaut’s Focus for Growth, an action plan to accelerate operational and financial performance while stabilising core activities.

And the changes seem to be working, with Q3 sales figures revealing a return to volume growth for the first time in two years. An improvement largely driven by a sharper focus on where Barry Callebaut believes it can create the most value.

A more focused business

At the heart of the strategy is a decision to concentrate resources on 10 key countries, including Brazil and Indonesia, that account for around two-thirds of Barry Callebaut’s business.

Alongside this geographical focus, it’s prioritising two areas it believes offer the strongest growth and profitability potential – gourmet chocolate and specialty ingredients.

Gourmet remains the company’s highest-margin business, serving chocolatiers, restaurants, hotels and premium foodservice customers.

“We need to grow our gourmet business faster than our average,” says Schumacher. “That’s an absolute focus point.”

Meanwhile, specialty ingredients encompass products such as fillings, inclusions, caramel solutions and nut-based ingredients.

But the emphasis on specialties is just one small part of a much bigger transformation underway at Barry Callebaut.

Moving beyond chocolate

Perhaps the most significant strategic shift is Barry Callebaut’s ambition to become a broader solutions provider rather than simply a chocolate supplier.

Instead of selling individual ingredients, the company wants to offer customers complete product solutions. A strategy shift Schumacher describes as “fundamental” to the direction of the business.

Ice cream provides a clear example. Barry Callebaut already supplies chocolate to many of the world’s largest manufacturers, but increasingly it is offering a wider package that may also include fillings, nuts, inclusions and flavour solutions.

The same opportunity exists in bakery, where premiumisation and private label innovation are creating demand for more sophisticated ingredient combinations.

By supplying multiple components rather than a single ingredient, Barry Callebaut believes it can deepen customer relationships, increase switching costs and improve margins.

“I am super excited about that because it is not only stickiness of customers, but it also helps us to drive margin accretion over time,” says Schumacher. “It is a value-added strategy, and yeah, it is growing well. We just need to choose wisely which segments we want to provide these total solutions to because you can do them all.”

The emphasis on value-added solutions reflects a broader shift towards higher-margin growth, with premiumisation set to play a central role.

Premiumisation remains pivotal

The gourmet division is expected to play a critical role in future growth.

Schumacher said the company has already improved availability levels by shifting towards a make-to-stock model and simplifying its portfolio around a core set of products.

At the same time, Barry Callebaut’s reinforcing the premium positioning of its gourmet brands, including Cacao Barry and Callebaut.

“We’ve really worked hard with the team to get to a core SKU list of around 200 SKUs of Callebaut brand and Cacao Barry brands, the brands that we have for the B2B market, and that’s working very successfully,” says Schumacher. “We’ve also made very clear tiering. We brought that back into the gourmet business. Our Cacao Barry is for chocolatiers and Michelin star restaurants, around 140 index, 145 price index. The same for the Signature Collection on Callebaut. The Callebaut selection made in Belgium claim is around 125 price tiering. Then we have our local regional brands like Van Houten. We have many of those, and I think we’ve been very clear on price tiering, very clear on the proposition and what they should bring. I’m super excited about the re-ignition of that business.”

The company is also investing behind four innovation platforms focused on taste enhancement, health and wellness, cocoa alternatives and digital solutions.

One area attracting particular attention is cocoa reduction and replacement technologies. Barry Callebaut’s ChoViva concept, for example, offers customers an alternative to traditional cocoa ingredients at a time when supply concerns and price volatility remain high.

But these solutions aren’t just about mitigating cocoa supply and pricing risks. They’re also part of a broader strategy to differentiate the business and capture a larger share of the global chocolate market.

Growth through market share gains

Instead of waiting for demand across the wider market to recover, Barry Callebaut is targeting growth through market share gains, with a medium-term ambition of returning to annual volume growth of 2% to 4%.

And improved service levels are expected to play a major role in that recovery.

“If we do not have service on time, in full, and quality right, that is a problem,” says Schumacher.

The company acknowledges that service performance weakened in both Europe and North America, with North America remaining the largest opportunity for improvement.

Investments aimed at removing production bottlenecks and increasing capacity in high-demand categories are already underway.

As Barry Callebaut works to strengthen its own foundations, attentions are also turning to the broader market conditions that have weighed heavily on the business in recent years. Namely, the cocoa crisis.

Looking beyond the cocoa crisis

Despite ongoing concerns over cocoa supplies and the potential impact of El Niño, Barry Callebaut remains relatively positive on the market outlook.

Schumacher notes that global cocoa inventories remain well above the levels seen during the height of the cocoa crisis and suggests recent market volatility may be disproportionate to actual supply dynamics.

The company continues to believe cocoa prices will settle within its previously outlined medium-term range, while also noting that many customers have already incorporated current cocoa costs into pricing.

At the same time, the chocolate maker’s working to reduce sourcing risk through greater diversification, including expanding sourcing activities in Brazil and Ecuador alongside its traditional West African supply base.

Building a resilient Barry Callebaut

While much is changing, the company’s belief in its role as “the future of the industry” remains strong.

That confidence is reflected in the scale of the transformation now underway. From simplifying the business and restoring service levels to investing in premiumisation, innovation and customer solutions, Barry Callebaut is attempting to address the operational weaknesses that have held it back while positioning itself for long-term growth.

The strategy also marks a notable shift in ambition. Rather than focusing solely on selling chocolate, the company wants to become a broader partner to food manufacturers, retailers and foodservice customers, embedding itself more deeply in product development and innovation.

Whether that reset delivers its targeted return to sustainable volume growth remains to be seen. The company still faces an uncertain cocoa market, changing consumer demand patterns and intense competitive pressures. But after several years defined by disruption, the early signs suggest the world’s largest chocolate maker is moving onto firmer footing.