ITS products tempt you from supermarket shelves everywhere, but you may not know its name. Formed 30 years ago when Klaus Jacobs, a German-born billionaire, folded together France’s Cacao Barry and Belgium’s Callebaut, Barry Callebaut is the world’s biggest chocolate-maker. The Zurich-based firm buys about a quarter of the annual global cocoa harvest and turns it into chocolate for Magnum’s ice creams, Nestlé’s KitKats and Mondelez’s Cadbury and Milka brands.
Can Mr Schumacher revitalise Barry Callebaut? (Reuters)
Jacobs died in 2008. His family remain the biggest shareholders, with a stake of around a third, but lately this has brought them little joy. Barry Callebaut has struggled for years with soft sales and high debt. The share price has melted; it is half what it was five years ago. Many of the firm’s woes were self-inflicted, but the whole industry was hammered in 2023-24 by crop failures related to climate change that drove cocoa prices to alarming heights. They leapt from around $2,500 a tonne to peak at $12,000 in 2024. (They are now around $4,000.)
In January Barry Callebaut appointed Hein Schumacher, a Dutchman and former boss of Unilever, as its fourth chief executive in six years. In April he said that operating profit in the year to August would fall by a “mid-teens” percentage, rather than rise as previously projected, as the company prioritised rebuilding sales volumes over boosting margins. The share price dropped by 16% on the day.
Can Mr Schumacher revitalise Barry Callebaut? On June 2nd he served up a plan. In the medium term he wants sales volumes to grow by 2-4% a year. That would be low by historical standards, but a welcome change after years of shrinkage: in the previous financial year, ending in August 2025, they fell by 6.8%. Mr Schumacher will concentrate on ten growth markets, including Brazil and Indonesia. He will also prioritise Gourmet, a business supplying top-quality chocolate to master chocolatiers, pastry chefs and restaurants, and the similarly profitable “speciality” segment, which, for instance, makes chocolate that resists melting in hot climates.
Analysts’ early verdicts are mixed. Bank Vontobel, a Swiss private bank, calls the plan a “crucial step in restoring growth”. Mr Schumacher “is spending a lot of time visiting the firm’s seven biggest clients and listening to their needs”, notes Vontobel’s Matteo Lindauer. But analysts at Helvetische Bank, another Swiss financial institution, are more sceptical: Barry Callebaut will evidently remain in turnaround mode for years, they write.
Restoring investors’ appetites will not be easy. In February Nicolas Jacobs, a board member and co-chairman of the family holding company, sold shares worth around SFr14m. That is a mere shaving off a chunky bar—Barry Callebaut’s market capitalisation is SFr6.1bn. Some analysts, however, took the sale as a sign that the family felt recovery would be slow at best.
Still, hardly anyone now questions the firm’s vertically integrated business model, running all the way from cocoa bean to chocolate bar. Mr Schumacher’s predecessor, Peter Feld, wanted to break the mould, splitting the capital-intensive cocoa-processing unit, which is vulnerable to volatile cocoa prices, from the more stable and profitable chocolate-making business. Disagreement is said to have led to his departure. Finding buyers for the processing factories would have been difficult, says Daniel Bürki of Zürcher Kantonalbank, another Swiss lender.
After years of disappointment, caution is wise. Mr Schumacher is wary of how economic and geopolitical uncertainty might affect consumers. And a strong El Niño is forecast, a climate pattern that could hurt cocoa harvests and raise bean prices again. So far he has the benefit of the doubt. But his recipe has yet to be tested.
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