SCM Leaders Forum: Barry Callebaut's Chocolate Supply Chains
Industry IoT's SCM Leaders Forum served as a melting pot for progressive ideas in supply chain, manufacturing and sustainability, attracting an array of thought leaders dedicated to advancing these fields.
The event, held at the HP Innovation Centre in Barcelona, featured insightful presentations from prominent organizations like Bayer, Coca-Cola Europacific Partners, Danone, L'Oréal and McKinsey & Company.
Sustainability Magazine's sister title Supply Chain Digital caught up with Philippe Gretz, CFO for Global Operations and Supply Chain at Barry Callebaut, who discussed the need to navigate cocoa price volatility and why sustainability is crucial to the coffers.
Managing supply chain costs
Based in Switzerland, Philippe Gretz plays a pivotal role at Barry Callebaut, a giant in the chocolate production industry.
His responsibilities as CFO for Global Operations and Supply Chain are intricate and critical, focusing on cost management and optimizing supply chains for cost-effective delivery to customers.
"My day-to-day role is to manage our costs, supply chains and transportation, so we can deliver product to the customers at the most effective cost," Philippe explains.
His role has become increasingly challenging as the chocolate industry grapples with sourcing raw materials amid volatile cocoa markets, a scenario that complicates financial planning.
Navigating cocoa price volatility
The industry is currently facing intense cost pressures, which necessitate careful management and innovative procurement strategies.
Philippe continues: "For chocolate, you need cocoa beans and that's the major issue we have in the industry because, maybe a year ago, a ton of beans was £3,000 (US$4,000) and now it's £9,000 (US$12,000).
"So, you have scarcity of beans, you have less quality beans, but you have almost the same demands."
Barry Callebaut, as the world's largest cocoa bean purchaser, has had to revise its sourcing strategies in response to these challenging market conditions.
Making sustainability profitable
Philippe views sustainability as more than an ethical obligation; it is a necessity for the survival and profitability of the chocolate industry.
Without sustainable cocoa production practices, the business model itself is jeopardised.
"We are big on sustainability because, without cocoa beans, there's no chocolate – it's critical for us," Philippe emphasises.
He shares a compelling example from a recent trip to South America: "Three weeks ago, I was in Brazil on a farm talking to the farmer. She has developed sustainability in her farm and last year was actually the first year in 20 years that she was profitable."
The value of knowledge sharing
Events like the SCM Leaders Forum provide valuable opportunities for supply chain professionals to connect and learn from diverse perspectives.
Such gatherings expose participants to innovations they might otherwise miss.
Philippe certainly appreciates the breadth of topics covered at such events: "Everything is interesting, from sustainability to integrated business planning, because you are learning.
"If you look at your own shoes, you don't learn."
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