Its products tempt you from supermarket shelves everywhere, but you might not know its name. Since German-born billionaire Klaus Jacobs combined Cacao Barry of France and Callebaut of Belgium 30 years ago, Barry Callebaut is the world’s largest chocolate maker. The Zurich-based firm buys about a quarter of the annual global cocoa crop and turns it into chocolate for Magnum’s ice cream, Nestlé’s KitKat and Mondelez’s Cadbury and Milka brands.
Can Mr Schumacher revive Barry Callebaut? (Reuters)
Jacobs died in 2008. His family remains the largest shareholder with about a third stake, but that has brought them little happiness recently. Barry Callebaut has struggled for years with low sales and high debt. The share price has melted; This is half of what it was five years ago. Many of the company’s troubles were self-inflicted, but climate change-related crop failures in 2023–24 affected the entire industry, sending cocoa prices to dangerously high levels. They are set to rise from around $2,500 a tonne to a peak of $12,000 in 2024. (Now they’re about $4,000.)
In January Barry Callebaut appointed Hein Schumacher, a Dutchman and former Unilever boss, as his fourth chief executive in six years. In April he said there would be a “mid-teens” percentage decline in operating profit by August, rather than the increase previously anticipated, as the company prioritized rebuilding sales volumes rather than increasing margins. The share price fell 16% that day.
Can Mr Schumacher revive Barry Callebaut? On June 2 he made a plan. In the medium term he wants sales volumes to grow by 2-4% per year. That would be low by historical standards, but a welcome change after years of decline: In the last fiscal year, ending in August 2025, they declined 6.8%. Mr Schumacher will focus on ten growth markets including Brazil and Indonesia. He would also prioritize gourmet, a business that supplies high-quality chocolate to master chocolatiers, pastry chefs and restaurants, and the similarly profitable “specialty” segment, which, for example, makes chocolate that resists melting in hot climates.
Initial sentiments from analysts are mixed. Bank Vontobel, a Swiss private bank, calls the plan an “important step in restoring growth.” Mr Schumacher is “spending a lot of time meeting the firm’s seven biggest clients and listening to their needs”, says Vontobel’s Matteo Lindauer. But analysts at Helvetische Bank, another Swiss financial institution, are more skeptical: Barry Callebaut will clearly remain in turnaround mode for years, they write.
Restoring investors’ interest will not be easy. In February Nicholas Jacobs, a board member and co-chairman of the family holding company, sold shares worth about SFr14m. This is just to remove one hefty item—Barry Callebaut has a market capitalization of SFr6.1bn. However, some analysts took the sale as a sign that the family felt the recovery would be slow at best.
Still, hardly anyone now questions the company’s vertically integrated business model, which runs from cocoa bean to chocolate bar. Mr. Schumacher’s predecessor, Peter Feld, wanted to split the capital-intensive cocoa-processing unit from the more stable and profitable chocolate-making business, which is sensitive to volatile cocoa prices. It is said that disagreements became the reason for his departure. Daniel Berkey of Zurcher Kantonalbank, another Swiss lender, says it will be difficult to find buyers for processing factories.
After years of disappointment, caution is wise. Mr Schumacher is mindful of how economic and geopolitical uncertainty could affect consumers. And there is a forecast of a strong El Niño, a climate pattern that could damage cocoa crops and send bean prices rising again. So far he has got the benefit of the doubt. But his recipe is yet to be tested.
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