Chocolate manufacturer Barry Callebaut has today announced the signing of a long-term supply agreement with Latin American bakery firm Grupo Bimbo.
Under the agreement, Callebaut will supply Grupo Bimbo with up to 32,000 tonnes of chocolate products annually for its domestic market, through the company’s Mexican factories in Toluca and Monterrey.
It will invest €12m in the Toulca factory to increase its production capacity.
Raphael Wermuth, external communications manager for Barry Callebaut, told Confectionerynews.com that the deal was in line with the firm’s strategy and would allow it to seize upon emerging markets in Mexico and Latin America.
“The focus on outsourcing agreements is one of our strategic intentions to nurture further growth – with a special focus on emerging markets like Mexico.”
“The deal will further strengthen Barry Callebaut’s position in Mexico – in a very short period of time, we became the market leader in outsourcing in the Mexican market.”
Wermuth said that Mexico and the South American market could be a future growth driver for Barry Callebaut, with Grupo Bimbo the market leader in the country.
“In the whole Latin American Region, Mexico makes a big part of the relevant market – both in terms of size and growth.”
“Mexico is still a country where the chocolate consumption is expected to grow disproportionally,” he said.
He pointed to figures from Nielsen, which forecasts growth in each confectionery category between 5-15% from 2011-15. In contrast the world chocolate market is expected to grow on a long-term average of 2-3% per annum.
Latin America potential
“Countries in South America do have similar promising growth expectations in terms of chocolate consumption,” said Wermuth.
While chocolate consumption in Mexico is expected to rise 6.9%, according to Euromonitor forecasts, consumption in other Latin countries is forecast to rise even higher: Peru 38.2%, Chile 19.8%, Argentina 47.9% and Brazil 29.7%.
Wermuth said Barry Callebaut would supply Bimbo liquid compound chocolate products– as Mexico is a typical compound market.
He said that because of the size and specialisation of Grupo Bimbo, Barry Callebaut held no other supply deals with other bakery firms in the region.
The company previously signed a long-term agreement with Mexican manufacturer Chocolates Turin in n July last year, where it acquired a production facility near Mexico City.