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Callebaut expands supply deal with Hershey

By Jane Byrne , 05-May-2011

Reflecting the continuing industry trend toward outsourcing, Barry Callebaut said a new supply deal it has agreed with Hershey will put its annual deliveries beyond the current 80,000 metric tonnes.

Additionally, the Swiss company said it will be investing an incremental US$15.0 million in its North American sites by the end of 2011.

A spokesperson for Barry Callebaut told ConfectioneryNews.com that this increase in production capacity is "not exclusively for Hershey but will serve existing business with other manufacturers as well.”

But the spokesperson for the Zurich-based pod to pallet chocolate supplier would not be drawn on specifics in terms of the percentage or tonnage increase that the hike in volumes the deal with Hershey represents.

She said as the implementation of the new contract with Hershey will only commence early next year, the Swiss group’s financial statements will not reflect the boost in volumes until the first quarter of its fiscal year 2012.

Kepler Equities analyst Jon Cox told this publication previously that an increasing number of chocolate companies are outsourcing their primary processing and Barry Callebaut, as the leading supplier, is well placed to benefit.

Last October saw Callebaut secure a key, long-term supply contract with Kraft Foods, that would see it double its existing business with the US food group.

Raphael Wermuth, communications spokesperson for Callebaut, said then that the pact involving the supply of liquid chocolate and semi finished cocoa products puts Kraft, maker of the Milka and Oreo brands, among its largest clients.

Another major food multinational, Nestlé, sources 43,000 mt of its annual chocolate needs from the Zurich-based chocolate group.

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