Swiss chocolate group Barry Callebaut has insisted that it will focus on driving growth between now and 2013 with the aim of growing operating earnings by 6-8% each year during the period.
The company, which today (1 April) booked a 4% increase in EBIT for the first six months of the year, said that it expects to reap the benefits of its recent shift from a product focus to a “customer segment focus”.
Speaking during a conference call to discuss the group’s first-half numbers, chief executive Juergen Steinemann said that the move was a “key success element” for the group.
“We have very much put chocolate into our different customer locations,” he said.
Barry Callebaut has divided its business to serve three core customer segments: industrial food manufacturers, professional or artisanal users and global retailers. In this way, Steinemann said the chocolate maker had focused in on the needs specific to each customer group.
The company is also looking to develop its outsourcing relationships with confectioners as a major revenue stream, having entered into an outsourcing agreement with Kraft Foods last autumn.
Management said that the company sees “a lot of potential” in this line of business, having developed relationships with “the big confectionery companies” including Kraft, Nestle and Hershey. However, Steinemann was quick to point out that Callebaut’s outsourcing business will also work with middling sized consumer chocolate groups – particularly given the unwillingness of the larger players to outsource their “blockbuster brands”.
Nevertheless, the company, which saw growth across all sectors and all regions during the first half, said that gains had been driven by expansion in emerging markets and gains at its cocoa processing unit.
“The main growth drivers were emerging markets – where we have invested heavily – and cocoa processing with strategic partners,” Steinemann said.
Barry Callebaut suggested that it expects the majority of its growth to come from developing markets between now and 2013.
The group said that the chocolate sector in emerging markets, such as Asia and Russia, is growing at a faster rate than in the established markets of the US and western Europe, making expansion in these regions particularly attractive. As part of this strategy, Barry Callebaut today revealed that it bought the 40% stake that it did not already own in a Malaysian unit, expanding its presence in Asia.