The Zurich-based chocolate giant reported a steep drop in its Q3 FY25 results (for the period ending May 31, 2025).
Results Snapshot
- Global chocolate volumes decreased by -5.1% and cocoa volumes by -11.3% in Q3.
- Revenue growth of +56.7% in local currencies and +49.5% in CHF for the first nine months.
- Overall group volume decline of -6.3% for the first nine months, with a -9.5% decrease in Q3
In April the Group’s net profit plunged nearly 70% year-on-year to CHF 63.5 million ($79.68m). Markets responded to the latest figures with swift disappointment, sending shares down 13% on Thursday (10), the day of the announcement.
Feld, who was named eighth most influential person in cocoa for 2024 by Cocoaradar, took over the top job in April 2023, with a mandate to streamline operations and boost profitability, is now facing a potent mix of external shocks and internal upheaval—testing both the viability of his transformation strategy and investor confidence in the group’s direction.
Why Is Barry Callebaut Struggling?
Despite a series of proactive measures—including revised pricing, customer renegotiations, bond issuance, and the much-vaunted 'BC Next Level' cost savings programme—Barry Callebaut is still being squeezed by market volatility and delayed pricing pass-throughs.
With cocoa prices swinging wildly—up 43% year-on-year before a sudden correction—Barry Callebaut’s cost-plus model has proven slower than expected in adapting to these sharp changes.
The company warns that the next 6–12 months will be critical, hinging on cocoa price stabilization, faster pass-through of costs, and the successful implementation of the BC Next Level efficiency programme.
Premium Members are invited to a virtual lunch with the editor on Wednesday 16 July where we will be discussing Barry Callebaut - off the record.
Five Pressure Points to Watch
1. Profit Margin Compression
Despite passing through price increases to customers, profit margins remain under siege:
- Financing and storage costs soared amid backwardation in cocoa markets.
- Net profit tumbled ~70% YoY, driven by elevated debt servicing and operational strain.
- The cost-plus model couldn’t absorb rising input costs fast enough.
2. Delayed Cost Pass-Through
Roughly 50% of cost increases were recovered in H1—a figure that has since improved, but remains lagged:
- Long-term B2B contracts and the gourmet division are especially slow to adjust.
- Feld’s team is now negotiating with clients to shorten payment cycles and move toward more dynamic pricing models.
3. Working Capital and Liquidity Crunch
The balance sheet tells a story of mounting pressure:
- Inventory levels surged to CHF 3.2 billion, up from CHF 2.4 billion.
- Net working capital nearly doubled to CHF 5.9 billion.
- Operating cash flow sank to negative CHF 2 billion, and net debt climbed to CHF 6.1 billion.
- Barry Callebaut issued CHF 730 million in bonds this year to shore up liquidity—while controversially maintaining its dividend.
4. Credit Rating Warnings
Agencies like Moody’s and S&P are sounding the alarm:
- Ratings outlooks have been downgraded or placed on watch due to persistent cash flow and leverage concerns.
- Net debt/EBITDA stands at an alarming 8x—far from the group’s historical average of 3–4x.
5. BC Next Level Delays
The flagship transformation initiative is now 12 months behind schedule:
- The programme still aims for CHF 250 million in annual savings, with 75% expected to impact EBITDA.
- Key projects include consolidating service centres, pruning 3,157 SKUs, and optimizing global operations.
- Analysts remain sceptical: “Today’s result is unlikely to reassure investors,” Vontobel’s Matteo Lindauer said.
Feld’s Transformation Strategy: Cost Cuts and Centralisation
When Peter Feld was appointed, it was under the auspices of Jacobs Holding AG, which holds a 30.1% stake and demanded a leaner, more efficient business.
His strategic playbook—centralisation, cost-cutting, and control—has restructured Barry Callebaut at its core. But it has also sparked an exodus of senior talent and internal friction.
Key Organisational Shifts
Feld’s reorganisation reduced the executive board from nine to six members and consolidated decision-making around global business service hubs in Hyderabad and Łódź. Sources close to CocoaRadar describe a culture shift marked by urgency, reduced local authority, and rising stress for mid-to-senior level managers.
Leadership Turnover: Strategic Misalignment or Cultural Fallout?
Since Feld’s arrival in 2023:
- Multiple senior leaders have exited, including his predecessor Peter Boone.
- Many found roles with competitors, a signal that Barry Callebaut may be losing industry veterans with valuable know-how.
- Insiders suggest a mismatch between Feld’s “play-to-win” ethos and the more collegial culture of the past.
Rebranding in Motion: From Barry Callebaut to ‘Callebaut’?
Adding to the intrigue, CocoaRadar has learned that the company is quietly preparing a major rebranding—dropping ‘Barry’ from its name and going forward as ‘Callebaut’.
Expected to launch in autumn 2025, the rebrand appears to signal a broader repositioning, but it is a huge gamble that will signify the end of its world-famous, 180-year-old French 'Cacao Barry' Brand.
- CocoaRadar understands Callebaut’s tagline ‘Crafted in Belgium from bean to bar’ is being replaced with ‘Crafted from bean to bar.'
- ‘Sourced from 100% traceable beans’ will now read ‘Traceable and sustainable cocoa beans’—potentially to accommodate multi-origin sourcing and global manufacturing beyond Belgium.
“It’s a shift that clearly paves the way for Callebaut-branded chocolate to be produced in any of the company’s factories around the world,” one source told CocoaRadar.
Outlook: Win-Win or Lose-Lose?
Barry Callebaut’s challenges are emblematic of a broader reckoning in the cocoa and chocolate industry:
- Historic commodity price swings have made even the most robust pricing models vulnerable.
- Large, B2B-facing manufacturers are caught between producer price inflation and consumer pushback on retail costs.
- Efficiency programmes like BC Next Level offer long-term promise—but require stability that remains elusive.
For Feld, the coming quarters may define his legacy. Can the company regain its footing—or is Barry Callebaut at risk of losing its premium positioning in a rapidly shifting global chocolate landscape?
One thing is certain: with profit erosion, investor jitters, and internal restructuring still in flux, the pressure is on.
Peter Feld will speak at the ECA Forum in September. CocoaRadar is the event's official media partner
Editor’s Note: This feature is part of CocoaRadar’s ongoing coverage of market resilience, corporate transformation, and leadership impact in the global cocoa and chocolate supply chain.
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