Hershey and Barry Callebaut finalize supply agreement

by Eric Schroeder
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HERSHEY, PA. — The Hershey Co. and Zurich, Switzerland-based Barry Callebaut have finalized a supply and innovation agreement first announced in April. As part of the partnership, Barry Callebaut will begin delivering liquid chocolate and finished products to Hershey within the next few months.

"We look forward to working with Barry Callebaut to expand our growth in the global chocolate market and to deliver superior new product innovation," said Richard H. Lenny, chairman, president and chief executive officer, The Hershey Co. "Barry Callebaut is a worldwide leader in premium chocolate and innovation, and this alliance provides Hershey with immediate access to these capabilities."

Patrick De Maeseneire, c.e.o. of Barry Callebaut, said the agreement "will transform our business in the Americas by significantly increasing our production capacities for chocolate and by optimizing our operational setup in the region."

"We expect to supply about 80,000 metric tonnes to Hershey per year," Mr. De Maeseneire said. "The transaction is again evidence of the ongoing outsourcing trend in the chocolate industry, which I think is only just beginning."

Barry Callebaut, which is expected to invest approximately $50 million in the partnership, will begin operating the leased chocolate-making equipment at the Hershey factory in Robinson, Ill., at the beginning of September, producing chocolate ingredients for Hershey products. In addition, Barry Callebaut will build a factory in Monterrey, Mexico, and supply liquid chocolate to Hershey. The Monterrey facility is expected to be operational by summer 2008.

In addition, the companies will partner on research and development activities with a focus on driving innovation in new chocolate taste experiences, premium chocolate, health and wellness, ingredient research and optimization. The companies also will partner on efforts designed to build a sustainable cocoa supply.

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