America’s love of ice cream calls for more Barry Callebaut chocolate

The world’s largest manufacturer of bulk chocolate is boosting production capacity in the Americas to meet growing demand from the ice cream industry.

Barry-Calibeau, whose clients include Nestle 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 in the Americas. A new facility in Canada will account for half of that, with the remainder coming from the expansion of existing plants.

Little known to consumers, the Swiss company supplies ingredients for one in four chocolate and cocoa products consumed worldwide. Barry Callebaut produced record volume in the Americas in the year through August and expects more growth to come, even as historic food inflation hurts consumers already grappling with soaring household bills and the threat of a looming recession.

Woolley said in an interview at the company’s regional headquarters in Chicago. “We’re seeing an explosion of ice cream, so we want to make sure we’re investing behind that as well.”

Barry Callebaut has begun construction of a new facility in Brantford, Ontario, the third in Canada and the first to be built in the Americas since 2008. The site, about 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 benefits from cheap Canadian electricity and can avoid US tariffs on sugar substitutes it needs to import from China.

The Brantford plant will produce 50,000 metric tons of sugar-free chocolate in an effort to meet demand from health-conscious consumers.

“I’m diabetic and I love chocolate, which is a big deal for me,” Woolley said. “If you go back 10 years ago, innovation has come such a long way, and today when my wife puts a bar of sugar-free chocolate in front of me versus regular chocolate, I don’t understand much of the difference.”

The other 50,000-tonne expansion will come from existing facilities in the region, which include five plants in the United States and two in Mexico. Additional production will focus on compound chocolate, which uses less cocoa and is key to making things like ice cream and donut coating.

The cocoa used to feed these mills will be processed in the region and in the producing countries, though Woolley doesn’t rule out an expansion of bean milling in the Americas. Barry Callebaut is the largest cocoa processor in the world. Rival Cargill Inc. for processing at one of two units in Pennsylvania as well as in Wisconsin, according to a company spokesperson.

trade down

Barry Callibou production in the Americas increased 6.4% to nearly 650,000 tons of chocolate and compounds in the year through August. Even with skyrocketing inflation and a looming recession, consumers are trading on private label and department store brands, parts of the industry that the company also supplies.

Customers who have stockpiled goods due to supply chain issues are pushing orders “a bit,” Woolley said. Demand is likely to remain flat in the first and possibly the second quarter, although it is expected to be “very strong” in the second half of the fiscal year.

“At the end of the day,” he said, “no matter what your mood is in or what challenge you’re facing, a piece of chocolate is a great way to end your day.”

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