Barry Callebaut and Hershey: Strategic partnership

The Hershey Company and Barry Callebaut AG, Zuerich, announced a strategic supply and innovation partnership. The co-operation will enable the companies to work together to drive long-term growth in the global chocolate market.
The companies will partner on a wide range of research and development activities with a focus on driving innovation in new chocolate taste experiences, premium chocolate, health and wellness, ingredient research and optimization. Under the agreement, Barry Callebaut will construct and operate a facility to provide chocolate for Hershey’s new plant in Monterrey, Mexico. Barry Callebaut will also lease a portion of Hershey’s Robinson, Ill., plant, and operate chocolate-making equipment at the facility. The partnership includes a long-term global agreement under which Barry Callebaut will supply Hershey with a minimum of 80,000 tons per year of chocolate and finished products. The two parties expect the final agreements to be signed by the end of May 2007.


The agreement will significantly increase Barry Callebaut’s production capacity in the Americas. Over the next three years, production capacities will increase by 130,000 tons, with a significant portion of this production dedicated to supplying Hershey. The total investment by Barry Callebaut will amount to USD 50 million (CHF 65 million). The two companies also will work together on efforts aimed at building a sustainable cocoa supply, including the World Cocoa Foundation’s Sustainable Tree Crops Program, the International Cocoa Initiative Foundation and industry efforts to implement a certification system in West Africa. Hershey will also participate in Barry Callebaut’s proprietary corporate social responsibility and sustainable cocoa-bean sourcing programs.


In February, the largest US candy-maker said it will eliminate 1,500 jobs and one-third of its existing production lines over the next three years. According the US newspaper “The Herald Tribune”, Hershey will close its candy factory in Naugatuck, Connecticut, which employs about 200 people. Hershey spokesman Kirk Saville said the Naugatuck plant is operating at less than 40 percent of capacity. The proportion of Hershey s manufacturing in the United States and Canada will shrink, from 94% now to 80% by 2010, the company has said.