Barry Callebaut, whose customers include Nestlé and Mars, plans to increase plant capacity in the region by 15% over the next 18 to 20 months, said Steve Woolley, the company’s president for the Americas. A new facility in Canada will account for half of that, with the rest coming from expanding existing plants.
The Swiss company, little known to consumers, provides the ingredients for one in four chocolate and cocoa products consumed in the world. Barry Callebaut produced record volume in the Americas in the year to August and expects more growth even as historic food inflation hammers consumers who are already struggling with food bills. rising households and a looming recession.
“We’ve kind of hit a wall on the capacity that we have in our network, and because of the growth that we’re seeing, we’re very optimistic about the future,” Woolley said in an interview at the regional headquarters. company in Chicago. “We’re seeing a big increase in ice cream, so we want to make sure we’re investing behind that as well.”
Barry Callebaut has begun construction of a new plant in Brantford, Ontario, its third in Canada and the first to be built in the Americas since 2008. The location, approximately 100 kilometers (62 miles) southwest of Toronto, was chosen based on manufacturing costs and proximity. to customers, Woolley said in an earlier interview. The company also takes advantage of cheap Canadian electricity and can circumvent US tariffs on two sugar substitutes it must import from China.
The Brantford plant will produce 50,000 metric tons of sugar-free chocolate to meet demand from health-conscious consumers.
“I’m pre-diabetic and I love chocolate, which is a big deal for me,” Woolley said. “If you go back 10 years ago, innovation has come a long way, and today when my wife puts a piece of sugar-free chocolate in front of me versus regular chocolate, I don’t notice much difference .”
The other 50,000 tons of expansion will come from existing facilities in the region, which include five plants in the United States and two in Mexico. The additional production will be focused on compound chocolate, which uses less cocoa and is essential for making things like ice cream and donut coatings.
The cocoa that feeds these factories will be processed both in the region and in the producing countries, although Woolley does not rule out an expansion of the grinding of the beans in the Americas. Barry Callebaut is the world’s largest cocoa processor. Rival Cargill Inc. stopped processing at one of the two units in Pennsylvania as well as in Wisconsin, according to a company spokeswoman.
Barry Callebaut’s production in the Americas increased 6.4% to nearly 650,000 tons of chocolate and compounds in the year to August. Even with rampant inflation and a looming recession, consumers are turning to house brands and private labels, parts of the industry that society also supplies.
Woolley said customers who had stocked up due to supply chain issues are pushing back orders “a bit”. Demand is expected to be stable in the first quarter and possibly the second, although he expects a “very strong” second half of the year.
“At the end of the day, whatever your mood or whatever challenge you’re facing, a piece of chocolate is a great way to end your day,” he said.