Hershey's and Barry Callebaut to partner
April 27, 2007
by FoodBusinessNews.net Staff
HERSHEY, PA. — The Hershey Co. and Barry Callebaut have announced a strategic supply and innovation partnership allowing the companies to work together to drive growth in the global chocolate market.
The final agreements are expected to be signed by the end of May, and the companies will partner in various research and development efforts, focusing on driving innovation with new chocolate taste experiences, premium chocolate, health and wellness and ingredient research optimization.
"Barry Callebaut is a global leader in high-quality chocolate, and we’re pleased with this opportunity to expand our relationship," said Richard H. Lenny, chairman, president and chief executive officer of The Hershey Co. "This partnership provides Hershey with immediate access to broad expertise in premium chocolate and builds on our strong research and development capabilities. We will work together on research involving unique cocoa flavors and formats to enable superior new product innovation. Barry Callebaut and Hershey will also work together on corporate social responsibility efforts, with an emphasis on bringing about sustainable, positive change benefiting cocoa farmers and their families."
As a part of the agreement, Barry Callebaut will construct and operate a facility providing chocolate for the Hershey plant in Monterrey, Mexico. Additionally, Barry Callebaut will lease part of Hershey’s Robinson, Ill., plant and operate chocolate-making equipment at the facility. There is also a long-term global agreement under which Barry Callebaut has agreed to provide Hershey’s with a minimum of 80,000 tons per year of chocolate and finished products.
"This long-term agreement with Hershey marks a milestone for Barry Callebaut," said Patrick De Maeseneire, chief executive officer, Barry Callebaut. "The transaction will transform our business in the Americas by doubling our production capacities of chocolate in the region. On a group level, it will increase our volumes by 10% over three years. We will be able to significantly strengthen our factory network, bringing us closer to our customers and making us more competitive in North America. Thanks to our innovative strength and cost leadership, we have succeeded in firmly establishing ourselves as a partner of choice on both sides of the Atlantic Ocean."
During the next three years, Barry Callebaut’s production capacity in the Americas will increase by 130,000 tons, and a large percentage of this production will be dedicated to supplying Hershey.
Barry Callebaut’s investment in the partnership is $50 million. The companies also will partner on efforts designed to build a sustainable cocoa supply.