November 12, 2009

Callebaut buy Chocovic

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Written by: Martin Christy

Swiss giant Barry Callebaut, the choco-saurus of the chocolate world, has swallowed up Spanish fine chocolate maker Chocovic for an undisclosed sum. Pending European competition rulings, the deal should be complete by the end of the year.

We’ve all eaten Callebaut chocolate at some time or other, usually unknowingly in one of the many private label bars or products currently on sale around the world by an endless list of chocolate companies, brands and chocolatiers. Now that reach will be extended a little further, with a significant hit to competition in the bulk high end couverture business.

Questions are left as to what extent the Chocovic brand will maintain it’s own distinct style, and how this will affect the many smaller Spanish businesses that Chocovic supply, such as Cacao Sampaka – a chocolatier chain born with the support of Chocovic, and others such as Enric Rovira. Will they now just be Callebaut customers, or will they still be buying a distinct couverture?

Perhaps in time, Chocovic will be positioned within the Callebaut range in a similar way to the ‘Barry’ name, now used for a few of the companies better country origin chocolates. The other big question on everyone’s lips is … who next?

About the Author

Martin Christy
Martin Christy is Seventy%’s editor and founder and is a leading voice in the chocolate industry, promoting the cause of fine chocolate and fine cacao and those who produce them. With twenty years’ experience of fine chocolate, he has travelled extensively visiting cocoa plantations and meeting the world’s top producers and is a consultant to the fine chocolate and cacao growing industries worldwide. Martin is Judging Director of the International Chocolate Awards, which he founded in the UK with Kate Johns of Chocolate Week. He is also Acting Chairman of the new fine cacao and chocolate industry association, Direct Cacao and is a member of the Heirloom Cacao Preservation Initiative Tasting Panel. He is also a freelance writer about fine chocolate, contributing to UK magazines and several books about fine chocolate.



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One Comment

  1. Alexander Rast

    Many years ago, GM was formed by one car company successively buying up various other car manufacturers. Then, in a stroke of marketing genius, they decided not to amalgamate all the cars under a generic GM banner, but keep separate companies with very distinct market positions. Thus they had an escalating scale: Chevrolet, Pontiac, Oldsmobile, Buick, and Cadillac. Each one was clearly segmented and offered clear car choices in their market segment. We might hope Callebaut adopts a similar strategy. One might then think of the Callebaut brand as the “Pontiac” of chocolate, Barry as the “Oldsmobile”, and Chocovic could be the “Buick”. Then to complete the stable they could buy one consumer company like Cadbury’s or Hershey – to be the “Chevrolet”, and one high-end company like Valrhona to be the “Cadillac”. As long as clear segmentation and management were maintained, that would leave the central office only with the job of managing overall strategy.

    However, as we know GM went terribly wrong, because at some critical point they decided to “extend” their ranges, with Chevrolet gaining models more aimed at a higher-end clientele, like the Corvette, and Cadillac descending somewhat into a more consumer-orientated market. It didn’t take long to decide thereafter that by standardising components, frames, etc. they could build what was basically the same car using different external bodywork and brand it as a separate model, saving in their view manufacturing costs while maintaining the illusion of separate brands. This effectively blurred everything, and buyers weren’t fooled: it didn’t take long for most people to realise there wasn’t much point in buying, say, a Buick when you could get the exact same car as a Chevrolet for less money. Those who were more discriminating, meanwhile, equally well understood that a name like Cadillac now meant nothing, that if they wanted real luxury they needed to look to companies like Mercedes or BMW who had at least maintained a high-end manufacturing tradition. This is the risk that I think we all fear with Callebaut, that they may decide that in the interests of better economies of scale they ought to centralise bean buying, roasting, etc. As the GM case shows, this entirely misses the point: economies of scale are only relevant if the product in concern is undifferentiated. When clear differentiation exists, you have a different economy: the economy of market position. And unfortunately, once market position is given away, it is very, very difficult to recover. So let us hope Callebaut can see what is probably in their best interest: to keep the companies distinctly separate in fact as well as on the label, and save their strength for strategic planning rather that trying to manage everything centrally.

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