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Chocolate supplier says ‘worst over’ for market

Global chocolate sales are poised for a revival as industry innovation and tumbling cocoa bean prices spur growth, the chief executive of the world’s biggest supplier of chocolate and cocoa products has forecast.

Antoine de Saint-Affrique, chief executive of Switzerland’s Barry Callebaut, said sales had accelerated in recent months and would return to a “normal rhythm” of growth. “From a market dynamics standpoint, I’m absolutely convinced the worst is over,” he told the Financial Times.

The world’s confectionery companies, many of which are Barry Callebaut’s customers, have been hit in recent years by the trend for healthier foods as well as higher cocoa prices. Global chocolate confectionery market volumes declined 1.5%in 2015 and 0.4% last year, according to Euromonitor.

However, cocoa bean prices have reversed direction over the past year, falling roughly 40%.

“We are passing the prices up and down to our customers,” said Mr de Saint-Affrique, although it would take time before retail prices also fell. “That’s why I’m telling you, I’m rather optimistic . . . We are going to get back in positive territory.”

He expected chocolate companies to offer more discounts and promotions “to ignite” the market. “It should go back to what was a normal rhythm of growth, which is somewhere around 1-2%,” he added.

Price falls would be only one factor driving a recovery, however. Innovations were another, such as chocolate-covered protein bars.

Barry Callebaut has expanded production of “heat resistant” chocolate, for sale in hotter countries. Its latest push is in providing a variety of chocolate mixtures for more than 1,200 small ice-cream parlours in Italy.

Last week, Barry Callebaut reported its sales volumes rose 2.8% to 1.4m tonnes in the nine months to May 31, with growth accelerating to 5.5% in the final three months of the period.

Copyright The Financial Times Limited 2017

Financial Times