The more costs this chocolate giant passes on to customers, the more expensive your indulgence potentially becomes https://t.co/pBSMMhpVjn ...

From its discreet headquarters in Zurich, But after years of steady growth, Barry Callebaut is navigating one of its rockiest stretches. The company’s shares have nearly halved over the past two years, hit by soaring cocoa prices, higher financing costs and a leadership shakeup.Today, Barry Callebaut is Switzerland’s most heavily shorted stock, with about a quarter of its free float in the hands of bearish investors. Though shares have rebounded in recent weeks, the volatility has rattled investors, who’ve ...

Swiss chocolate maker Barry Callebaut, a major supplier for Nestlé and Hershey, is positioning for a comeback after its stock nearly halved in value https://t.co/spcxV6iIhG ...

Core Viewpoint - Hershey's shares are now considered to have a "compelling" risk/reward profile due to improved market trends and cost pressures already being priced in, prompting Goldman Sachs to upgrade the stock from Sell to Buy with a 30% price target increase [2] Company Summary - Goldman Sachs has given Hershey a double upgrade, reflecting confidence in the company's future performance [2] - The stock's new rating indicates a positive outlook for Hershey amidst favorable market conditions [2] Industry Summary - The overall market trends are improving in favor of Hershey, suggesting a potential recovery or growth in the confectionery sector [2] - Cost pressures that previously affected the industry are now seen as already accounted for in the stock price, indicating a stabilization in the market [2]

Core Viewpoint - Hershey shares experienced a 3% increase in premarket trading following a double upgrade from Goldman Sachs, which raised its rating from sell to buy and increased its price target from $170 to $222 [1] Company Summary - Goldman Sachs issued a rare double upgrade for Hershey, indicating a significant shift in sentiment towards the chocolate maker [1] - The new price target of $222 represents a substantial increase from the previous target of $170, reflecting positive expectations for the company's future performance [1]

Cocoa Market Overview - Cocoa prices experienced a significant rally, with December ICE NY cocoa closing up 3.02% and London cocoa up 2.15%, reaching a 1.5-week high due to weather concerns in West Africa [1] - Heavy rainfall in the Ivory Coast has hindered farmers' access to cocoa fields, while dryness in Ghana and Nigeria has negatively impacted crop conditions [1][6] Supply and Inventory Dynamics - ICE-monitored cocoa inventories in US ports have decreased to a 4.25-month low of 2,092,823 bags, supporting higher cocoa prices [3] - Cocoa exports from the Ivory Coast have shown a slower pace, with shipments totaling 1.82 million metric tons (MMT) this marketing year, reflecting a 5.8% increase from last year but a decline from a previous 35% increase [3] Quality and Production Concerns - Quality issues regarding the Ivory Coast's mid-crop cocoa are contributing to price support, with an estimated mid-crop of 400,000 MT, down 9% from last year's 440,000 MT [7] - Nigeria's cocoa production is projected to decline by 11% year-on-year to 305,000 MT for the 2025/26 crop year, which may also support cocoa prices [8] Demand Trends - Weak global cocoa demand has been a bearish factor, with European cocoa grindings falling 7.2% year-on-year and Asian grindings down 16.3% year-on-year, marking the smallest Q2 amount in eight years [9] - In contrast, Ghana's cocoa production is expected to increase by 8.3% year-on-year to 650,000 MT, which could exert downward pressure on cocoa prices [10] Future Projections - The International Cocoa Organization (ICCO) has revised its global cocoa deficit for 2023/24 to 494,000 MT, the largest in over 60 years, while forecasting a surplus of 142,000 MT for 2024/25 [11]

Group 1: Cocoa Price Movements - Cocoa prices closed lower on Friday, with December ICE NY cocoa down 1.43% and December ICE London cocoa down 1.73% [1][2] - The decline in cocoa prices was influenced by a stronger dollar, leading to long liquidation in cocoa futures [2] - Cocoa prices had previously reached one-week highs due to weather concerns in West Africa, including heavy rain in the Ivory Coast and dryness in Ghana and Nigeria [2][4] Group 2: Supply and Demand Factors - Tighter cocoa inventories are supportive for prices, with ICE-monitored cocoa inventories in US ports falling to a 4.25-month low of 2,092,823 bags [4] - The Ivory Coast's cocoa exports showed a 5.8% increase year-on-year, but this was a slowdown compared to a previous 35% increase [4] - Weak global cocoa demand has negatively impacted prices, with significant declines in cocoa grindings reported in Europe, Asia, and North America [10] Group 3: Crop Conditions and Quality - Optimism about this year's cocoa crop harvest in West Africa is present, with a cocoa pod count reported to be 7% above the five-year average [6] - Quality concerns regarding the Ivory Coast's mid-crop cocoa are supportive of prices, with a projected decline of 9% in this year's mid-crop compared to last year [8] - Ghana's projected cocoa production for 2025/26 is expected to increase by 8.3%, which may exert bearish pressure on cocoa prices [11] Group 4: Global Cocoa Deficit and Future Projections - The International Cocoa Organization revised its 2023/24 global cocoa deficit to -494,000 MT, the largest deficit in over 60 years [12] - A forecasted global cocoa surplus of 142,000 MT for 2024/25 marks the first surplus in four years, with production expected to rise by 7.8% year-on-year [12]

Core Viewpoint - Cocoa prices have increased due to weather concerns in West Africa, impacting supply and quality, while global demand remains weak, creating a complex market environment [1][4][10]. Group 1: Price Movements - December ICE NY cocoa closed up +73 (+0.99%) and December ICE London cocoa closed up +68 (+1.33%) on Wednesday [1]. - Cocoa prices fell to 1.5-month lows on Tuesday due to expectations of growing supplies amid weakening demand [4]. Group 2: Supply Factors - Heavy rain in the Ivory Coast has hindered farmers' access to cocoa fields, reducing cocoa movement to ports [1]. - Tighter cocoa inventories in US ports fell to a 4-month low of 2,115,411 bags [3]. - The slowdown in cocoa exports from the Ivory Coast showed a shipment of 1.81 million metric tons (MMT) this marketing year, up +5.8% from last year but down from a larger +35% increase seen in December [7]. - Quality concerns regarding the Ivory Coast's mid-crop cocoa are supportive of prices, with an average estimate of 400,000 metric tons, down -9% from last year's 440,000 metric tons [8]. Group 3: Crop Conditions - Optimism about this year's cocoa crop harvest in West Africa is noted, with a cocoa pod count reported to be 7% above the five-year average [5]. - The past 60 days for West Africa cocoa were the driest on record since 1979, impacting cocoa pod retention before the main crop harvest [6]. - Nigeria's cocoa production is projected to fall -11% year-on-year to 305,000 metric tons for the 2025/26 crop year [9]. Group 4: Demand Dynamics - Weakness in global cocoa demand has been a bearish factor, with Q2 European cocoa grindings falling -7.2% year-on-year to 331,762 metric tons [10]. - The Cocoa Association of Asia reported a -16.3% year-on-year decline in Q2 cocoa grindings to 176,644 metric tons, the smallest amount for a Q2 in 8 years [10]. - Higher cocoa production by Ghana is seen as bearish for cocoa prices, with a projected increase of +8.3% year-on-year to 650,000 metric tons for the 2025/26 crop [11]. Group 5: Global Cocoa Deficit - The International Cocoa Organization revised its 2023/24 global cocoa deficit to -494,000 metric tons, the largest deficit in over 60 years [12]. - The 2023/24 global cocoa production is expected to fall by 13.1% year-on-year to 4.380 million metric tons [12].

Britons are feeling the pinch from double-digit increases in the price of beef, chocolate and coffee, as bad weather and higher production costs risk worsening a recent cost-of-living squeeze https://t.co/G2EdevZ45c ...

Financial Data and Key Metrics Changes - The company reported good Q2 results with strong pricing, although volume mix remained flat after accounting for downsizing [5] - The bottom line was slightly better than expected, indicating overall financial health [5] Business Line Data and Key Metrics Changes - The chocolate category showed significant pricing increases and revenue growth management (RGM) actions aligning with expectations [6] - The biscuits category in North America is experiencing a decline in volume, while emerging markets are showing double-digit growth [10][12] Market Data and Key Metrics Changes - North America is facing consumer anxiety and a focus on essential items, leading to a decline in the biscuits category [9][10] - Emerging markets, particularly Brazil, India, and Mexico, are experiencing sustained volume and value growth despite softer consumer confidence [11][12] Company Strategy and Development Direction - The company aims to boost productivity and implement incremental pricing in North America to counteract inflation and improve profitability [14][16] - There is a focus on maintaining share gains in alternate channels such as club and dollar stores [16] Management Comments on Operating Environment and Future Outlook - Management does not anticipate a material rebound in the North American category for the remainder of the year, citing ongoing consumer sentiment challenges [13][17] - The company remains cautious about the impact of cocoa prices and consumer behavior on future earnings, with a focus on maintaining gross profit dollar growth [45][46] Other Important Information - The company is actively managing its debt and share repurchase strategy, indicating a pragmatic approach to capital deployment [65] - There is no significant impact from GLP-1 drugs on current volumes, with economic factors being the primary driver of consumer behavior [67][69] Q&A Session Summary Question: Insights on key geographies and North America actions - Management highlighted a strong quarter in Europe but acknowledged challenges in North America, emphasizing the need for demand-driving actions [4][6] Question: Clarification on guidance for the second half - Management confirmed that the guidance reflects a realistic view of the tougher areas, particularly in chocolate and the U.S. market [20][23] Question: Cocoa market outlook and pricing strategy - Management discussed favorable cocoa market fundamentals and potential pricing strategies for 2026, indicating a cautious but optimistic approach [25][44] Question: Impact of consumer behavior on pricing and volume - Management reassured that the planned pricing increases are selective and aimed at protecting key consumer price points [54][56] Question: Retailer destocking in North America - Management attributed retailer destocking to cash flow management and a slowdown in consumption, indicating a strategy to shift focus to value channels [75][76]