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Introduction & Market Context
Barry Callebaut AG (SWX:BARN) presented its nine-month sales figures for fiscal year 2024/25 on July 10, 2025, revealing how the world’s leading chocolate manufacturer is navigating an unprecedented period of cocoa price volatility. The company reported that cocoa bean prices have remained elevated, increasing 43% year-over-year in the first nine months of the fiscal year, creating what the company describes as a "new normal" for the industry.
The cocoa futures market has experienced dramatic fluctuations, with prices rising from a historic average of £2,000 per metric ton to between £6,000-£10,000 over the past two years. This volatility has forced Barry Callebaut to make strategic adjustments to its business model.
As shown in the following chart of cocoa price volatility, the market has experienced unprecedented swings:
Despite these challenges, the International Cocoa Organization (ICCO) continues to expect a slight surplus for the 2024/25 season, despite a weaker mid-crop. The company also noted that the Ivory Coast mid-crop farmgate price increased by 22%, providing farmers with more income to reinvest in their operations.
Quarterly Performance Highlights
Barry Callebaut reported a 6.3% decline in overall sales volume for the first nine months of fiscal year 2024/25. This decline was attributed to the challenging market environment and strategic prioritization decisions. Despite the volume decrease, the company achieved revenue growth of 56.7% in local currencies, driven by the exceptional pass-through of higher cocoa prices to customers.
The company’s performance varied across its business segments, as illustrated in this breakdown:
Global Chocolate volumes decreased by 5.1%, impacted by what the company described as a "highly challenging and volatile market environment," further amplified by U.S. tariff uncertainty in the third quarter. Meanwhile, Global Cocoa volumes declined more sharply at 11.3%, which the company attributed to negative market demand resulting from bean price increases and strategic prioritization of higher-return segments.
The value chain dynamics have created a complex situation where B2C customers are adjusting their behavior in anticipation of consumer reactions to higher prices, as shown in this analysis:
Regional Performance Analysis
Barry Callebaut’s performance varied significantly across regions, with Latin America standing out as the only region showing positive growth at 8.3%. The company’s regional performance compared to Nielsen market data reveals that Barry Callebaut’s volume declines were generally steeper than overall market trends in most regions.
The following breakdown provides a detailed look at regional performance:
Western Europe, representing 32% of the group’s nine-month volume, experienced a 6.8% decline, compared to a 1.8% market decline according to Nielsen data. The company attributed this to a challenging environment with higher prices affecting customer behavior and SKU rationalization.
North America, accounting for 24% of group volume, saw a 5.8% decrease despite new customer wins. The company cited the challenging market, customer ramp-up in Toluca, Mexico, and U.S. tariff-related uncertainty in the third quarter as contributing factors.
Latin America’s strong 8.3% growth was primarily driven by Brazil, with innovation, compound solutions, and solid Gourmet demand contributing to the positive performance.
Strategic Initiatives
Barry Callebaut outlined several strategic initiatives aimed at enhancing its resilience in the face of ongoing market volatility. The company is focusing on four strategic growth pillars that continue to show resilience despite the challenging environment:
The company is also implementing a comprehensive action plan to support deleveraging, centered around three key areas: reducing net working capital intensity, increasing EBITDA, and enhancing its financing structure. Barry Callebaut has set an ambition to achieve a net debt to recurring EBITDA ratio of less than 3.5x.
Additionally, the company reported continued progress on its BC Next (LON:NXT) Level initiative, which aims to standardize factory processes, upgrade food safety measures, and implement digital enhancements. The company noted that the initiative has been rolled out in six factories, with 21 more implementations planned by October.
Raw material price developments have been a significant factor affecting the company’s operations, with cocoa beans showing a dramatic 126% increase:
Forward-Looking Statements
Due to the unprecedented market conditions, Barry Callebaut has revised its guidance for the full fiscal year 2024/25. The company now expects a mid-single-digit volume decrease in Global Chocolate and a double-digit volume decrease in Global Cocoa, resulting in an overall volume decrease of approximately 7% for the Group.
Despite these volume challenges, the company anticipates that recurring EBIT will see a mid to high single-digit increase in local currencies, reflecting the company’s ability to pass through higher costs and implement strategic initiatives to enhance profitability.
The company emphasized its three-pronged approach to enhance resilience and agility: leveraging its cost-plus model to pass through significant cocoa price increases, prioritizing key growth pillars, and continuing its transformation through the BC Next Level initiative.
Barry Callebaut’s management expressed confidence that these measures will build "a stronger and more resilient Barry Callebaut" capable of navigating the new normal of higher volatility in the cocoa and chocolate industry.
Full presentation:
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