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Declining chocolate market felt by Mars and Barry Callebaut

By Lindsey Partos , 02-Apr-2009
Last updated on 06-Apr-2009 at 13:06 GMT

Clear signs that falling consumer demand for chocolate is starting to impact the supply chain with Mars' chocolate business in France announcing contracted production in Alsace.

Activity at its Haguenau factory, that makes Mars bars, milky ways and M&M’s, will be reduced by 10 per cent in comparison to 2008 following a flexi-time agreement signed with the local unions.

"We are feeling the full impact of new purchasing patterns by consumers," said Nathalie Roos, president of Mars Chocolat France at a press conference this week.

The French arm of chocolate behemoth Mars recorded turnover of €497m in 2008, representing growth of 4 per cent in a tough marketplace. But from the beginning of this year, the figures have fallen with the filial chalking up 10 per cent fewer sales from the beginning of the year until 9 March at retailers.

Set against the backdrop of a global economic downturn, chocolate makers are hopeful that the consumer tendency to purchase small treats during times of recession will help to shore up sales. But the going will be tough: both the International Monetary Fund (IMF) and the World Bank expect the global economy to contract this year for the first time since the 1930s.

Further evidence that the market for chocolate is starting to feel the pinch comes from the world's biggest maker of bulk chocolate, Barry Callebaut.

The Swiss firm announced today that for the first half year to February 2009 sales revenue fell by 1.6 per cent to CHF2.5bn (€1.64bn). But margin improvements, cost control and 'efficiency measures' contributed to a 15.3 per cent rise in net profit to CHF143.4m (€93.8m) for the period, despite "an exceptionally difficult environment".

“Barry Callebaut’s results are satisfactory in the context of a declining global chocolate market," said outgoing CEO of Barry Callebaut, Patrick De Maeseneire.

But he warned that "due to the unprecedented economic crisis" volume growth for the Zurich-based pod-to-pallet firm is expected to slow down to around two to four per cent for the year.

In terms of volumes, Barry Calleabut sold 611.920 tonnes for the first half of the year, a small 0.1 per cent fall compared to the previous year period.

In a separate announcement, the company announced that after seven years with Barry Callebaut Patrick De Maeseneire will leave the company to become CEO of recruitment firm Adecco.

He will be replaced by German-born Juergen B. Steinemann, who comes to the cocoa firm from animal nutrition and fish feed company Nutreco Agriculture, where he worked as its chief operating officer.

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