ZURICH — Barry Callebaut’s efforts to deal with high cocoa bean prices include creating non-cocoa products through precision fermentation and sourcing cocoa from South America.

“We are expanding our full range of chocolaty experiences beyond the chocolate offerings into compounds and also into non-cocoa alternative offerings,” said Peter Feld, chief executive officer, in an April 10 earnings call. “We have just launched in the UK, as well as in the Benelux (Belgium, The Netherlands and Luxembourg), our non-cocoa solutions from precision-fermented sunflower seeds offerings that expand the portfolio of Barry Callebaut and offer all the variety of chocolaty experiences for our customers.”

Sales volume for Zurich-based Barry Callebaut fell 4.7% in the first half of the fiscal year as higher prices and delayed customer orders had a negative impact on demand. Cocoa bean prices increased by 95% in the six-month period ended Feb. 28. Barry Callebaut expects a sales volume decrease in mid-single-digit percentages in the fiscal year. The previous outlook was a decrease in the low-single-digit percentages.

Cocoa bean prices rose recently due to poor crops in Ghana and the Ivory Coast, the two leading countries for sourcing cocoa beans. Prices began the fiscal year at ₤5,332 ($6,917) per tonne and shot up to ₤9,425 per tonne before falling to ₤7,342 per tonne on Feb. 28, according to Barry Callebaut.

“When you think about the declining production in Ivory Coast and Ghana that we actually have experienced, we, on the other side, see increases in harvest through growth and new planting in Ecuador and probably stable developments over the other sourcing countries,” Feld said.

Barry Callebaut’s sales of 1,085,048 tonnes compared to 1,138,524 tonnes in the first half of the previous fiscal year. Some of Barry Callebaut’s customers in the first half waited to see if cocoa bean prices would decline while other customers sought cost-effective non-cocoa recipe adjustments, said Peter Vanneste, chief financial officer for Barry Callebaut.

“All these factors play a role in our half-year-one volumes, but importantly, all of them are also short term,” he said. “Mid- and long-term, we remain very confident in the long-term proven resilience of the chocolate category and all the opportunities that it contains.”

In Barry Callebaut’s Global Chocolate segment, sales volume decreased by 4.5% to 871,528 tonnes as food manufacturers faced negative market dynamics with larger pricing actions, low levels of customer orders and changes to customer behavior, according to Barry Callebaut.

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Sales revenue increased 63% to 7.29 billion Swiss francs ($8.84 billion) from 4.64 billion Swiss francs, driven by Barry Callebaut’s cost-plus pricing model. Barry Callebaut passed through higher cocoa bean prices to its customers. Net profit fell nearly 60% to 31 million Swiss francs ($37 million) from 77 million Swiss francs.

“While we did pass a lot of higher costs related to the bean price, market structure and financing, net profit was impacted by a delay in pricing through to our customers,” Vanneste said.

Feld said because of a six-month to nine-month delay in the supply chain, consumers at retail have yet to feel the impact of Barry Callebaut passing on its higher costs to its customers.

“Now all of that will take time, right?” he said. “So, we believe that we’ve seen the worst quarter behind us, and that’s why we’re guiding for the mid-single-digit decline for the full year this fiscal year, but please remember the bean price increase has not yet arrived at the consumers yet, and by the way, nor has the taxation increase with the new legislation in North America.”

In Barry Callebaut’s Global Chocolate segment, sales volume decreased by 4.5% to 871,528 tonnes as food manufacturers faced negative market dynamics with larger pricing actions, low levels of customer orders and changes to customer behavior, according to Barry Callebaut. North America volume in Global Chocolate decreased 2.3%, impacted by the temporary closure of the Toluca facility in Mexico and weaker demand from food manufacturers.

Barry Callebaut waited to see how the Trump administration in the United States might impact the North American market, Feld said.

“As you know, we have a well-balanced setup between Canada, the United States and Mexico, but obviously, we wanted to wait a little bit and put a bit of a pause in here to actually see how things will unfold,” he said. “I think we’re through that period. I think by now, it’s clear that this will remain a disruptive environment, and we’re leaning in to have a strong balance and a reset network for North America focusing on really proximity to the customers while optimizing our cost structures, and that’s what led us to doubling down on the investments we have in Brantford in Canada.”

Sales volume in Barry Callebaut’s Global Cocoa segment declined 5.6% to 213,520 tonnes. Cocoa bean prices had a negative impact on demand.

“The key thing that I want to leave with you is we are here to play to win,” Feld said. “We're in an unprecedented bean price volatility environment as we have experienced in the last 12 months, which, especially in the last course, have significantly impacted customer behavior, and hence, our financial performance in the short term.”