Barry Callebaut Slashes Profit Outlook as Cocoa Prices Collapse and Geopolitical Tensions Mount

Barry Callebaut, the global leader in chocolate production, has issued a significant profit warning, citing a volatile combination of falling raw material costs and structural industry challenges. The Zurich-based company now expects its earnings before interest and tax (EBIT) to decline by a "mid-teens" percentage for the 2025-2026 fiscal year. This guidance represents a sharp reversal from projections provided just three months ago, when the firm indicated it was preparing for a return to growth. CEO Hein Schumacher attributed the downgrade to the rapid decline in cocoa bean prices and competitive overcapacity. While lower input costs can typically benefit margins, the speed of the price collapse combined with volume declines has severely hampered profitability. Commodity data highlights the severity of the downturn; cocoa prices have fallen 41.6% since the start of the year and 57.6% over the last 12 months, recently trading at $3,537.28 per tonne. While stronger harvests have kept a ceiling on costs, the company noted that the closure of the Strait of Hormuz and conflict in Iran have created supply disruptions and increased operational costs. Investors reacted sharply to the news, with shares falling as much as 17% on Thursday. Schumacher described the current environment as a "turbulent period" of industry disruption, though he maintained that the company's market position remains unparalleled as it prioritizes restoring volume to lead the market back toward growth.