Barry Callebaut believes COVID-19 will have an effect on fine chocolate.
The chief executive officer, Antoine Bernard de Saint-Affrique, stated during an April 16 earnings call that the global Gourmet & Specialties business of Barry Callebaut AG will be adversely affected by the coronavirus (COVID-19) pandemic to an unknown degree. He gave specifics on the impact that business had in China in February.
As a precautionary measure due to the instability in the financial markets, Barry Callebaut drew the entire amount of its revolving credit line, which totaled €1 billion ($1.08 billion) over a six-month period.
The Zurich-based business reported sales revenue for the six months ended February 29 of 3,762 million Swiss francs ($3,877 million), up 2.4% over the first half of the previous fiscal year’s sales revenue of 3,673 million Swiss francs. Volume of sales increased by 5.4%. According to Mr. Bernard de Saint-Affrique, COVID-19 had little impact on first-half outcomes, with the exception of China in February.
He listed a number of advantages. The primary cocoa season in Africa has ended, and COVID-19 is currently having less of an adverse impact on volume in Barry Callebaut’s Global Cocoa and Food Manufacturing divisions.
“We anticipate a significant impact on the volume of Gourmet & Specialties, given that most out-of-home activities, coffee shops, and restaurants have closed in lockdown countries,” Mr. Bernard de Saint-Affrique stated. Since the impact is dependent on the duration and severity of the pandemic, it is impossible to quantify at this time. However, by the time of our nine-month sales announcement in July, we do hope to have a better grasp of COVID-19’s overall influence on the company.
688,602 tonnes of sales for Food Manufacturing, 227,578 tonnes for Cocoa, and 130,515 tonnes for Gourmet & Specialties were the business’s first-half sales volumes.
China’s Gourmet & Specialties industry was particularly affected by COVID-19 on February 13, the day the nation was placed under lockdown.
Mr. Bernard de Saint-Affrique stated, “We saw an immediate sharp slowdown of our Gourmet business and our factory, like the vast majority of Chinese factories, couldn’t restart production until Feb. 20.” It took us roughly three weeks following the reopening to return to regular plant use. Today, the markets for gourmet food and FM (food manufacturing) are both recovering strongly.
According to him, online sales have increased in China as well.
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“We certainly keep it in mind to make sure that we are well-prepared to serve our customers as soon as the situation improves as this day will obviously come,” Mr. Bernard de Saint-Affrique stated. “Whilst we cannot predict if and when the example of China can be extrapolated elsewhere,” he added.
Barry Callebaut is still producing goods for its clients. It was described as a tribute to Barry Callebaut personnel by Mr. Bernard de Saint-Affrique.
The fact that we continue to serve our customers every day and that our operations have not yet seen a significant disruption, in Mr. Bernard de Saint-Affrique’s opinion, is the best testament to their labor. “As you are aware, our cocoa and chocolate goods are available in a variety of products, including energy bars, cookies, breakfast items, and other necessities. We contribute daily to maintain the food chain, which provides all of us with all of the energy in the universe.