Barry Callebaut, the Swiss giant that leads the world in chocolate manufacturing and counts Nestlé, Hershey, and Mars among its major clients, has sharply reduced its profit outlook for the 2025-26 fiscal year. The company blamed plunging cocoa prices, widespread overcapacity in the sector, and potential supply chain disruptions from the Iran war for the downgrade.
Executives now expect earnings before interest and tax to fall by a mid-teens percentage by mid-2026, a dramatic shift from the growth prospects they signalled only three months earlier. As the processor of more than 40 per cent of global cocoa beans, according to company filings and industry reports, Barry Callebaut remains highly exposed to these volatile market forces.
Hein Schumacher, who stepped in as CEO in late January, acknowledged the challenges but emphasised the firm’s strengths. He described its unparalleled market position and long-term growth opportunities, even as the industry faces a turbulent period of upheaval.
“In the first half of our fiscal year, cocoa bean prices decreased, which is encouraging for future chocolate market momentum and supported strong free cash flow generation,” Schumacher said in a statement.
“Yet the unique speed of the market decrease combined with a competitive overcapacity market, volume declines and supply disruption impacted EBIT performance and adjusted our profitability outlook for the year as we prioritise restoring volume and leading the market back to growth,” he added.
Investors responded harshly, sending Barry Callebaut shares down as much as 17 per cent on Thursday before they closed about 15.8 per cent lower in late morning London trading.
The cocoa slump reflects bumper harvests in key producers Côte d’Ivoire and Ghana, which the International Cocoa Organisation projects at 2.1 million tonnes combined for 2025/26. Prices dipped 0.72 per cent on Wednesday to $3,537.28 per tonne, down 41.6 per cent year-to-date and 57.6 per cent over the past year, reversing 2024’s shortages that drove peaks above $10,000.
Geopolitical strains add further pressure. The closure of the Strait of Hormuz has inflated shipping and insurance costs for African cocoa exports, much like its toll on energy markets.
Rabobank analysts predict another 10-15 per cent hit to volumes if issues continue, forcing firms like Barry Callebaut to balance cost controls with efforts to revive consumer demand amid higher retail prices.