Shares of Swiss-Belgian chocolate maker Barry Callebaut climbed sharply on Monday after a Reuters report said the company is exploring options to separate its cocoa processing division, a move that could reshape the world’s largest chocolate manufacturer as it grapples with volatile cocoa prices.
The stock rose as much as 6.5%, making it one of the top performers in European trading, as investors welcomed the prospect of reducing exposure to sharp swings in raw material costs.
Early-stage talks on cocoa division separation
According to Reuters, Barry Callebaut is in the early stages of examining a potential separation of its global cocoa unit from the rest of the group, citing three people familiar with the discussions.
The deliberations are aimed at improving the company’s financial profile and shielding parts of the business from the volatility that has rocked cocoa markets over the past year.
Options under consideration include spinning off the cocoa division and selling a minority stake at a later stage.
Other possibilities include forming a joint venture or merging the unit with another business, while a full sale has not been ruled out, two of the sources said.
The cocoa unit sources and processes cocoa beans, supplying both Barry Callebaut’s own chocolate operations and external customers across the industry.
Focus on higher-margin chocolate business
Separating the cocoa arm could allow Barry Callebaut to focus more sharply on its higher-margin chocolate business, which includes contract manufacturing for major brands such as Nestlé’s KitKat and Unilever’s spun-off Magnum ice cream brand, the sources said.
The move could also help protect the group from commodity price swings, which have weighed on earnings and cash flows.
Cocoa prices surged last year after crop diseases in the Ivory Coast and Ghana triggered a global shortage, before easing in 2025 as demand softened and output increased in other regions.
One person familiar with the matter said the company has held talks with advisers in recent weeks to explore the feasibility of a separation, while another noted that a split could allow each business to tap different sources of financing better suited to their respective risk profiles.
Analysts flag complexity of carve-out
Analysts cautioned that a separation would be complex, given Barry Callebaut’s deep vertical integration.
Kepler Cheuvreux noted that around two-thirds of the cocoa division’s gross sales come from internal transfers to the chocolate side of the business, making a clean carve-out challenging from an operational standpoint.
However, the broker added that a separation could make sense financially, describing the cocoa unit as a low-margin and volatile earnings stream that absorbs a significant amount of invested capital.
Vontobel echoed that view, saying it no longer excludes any strategic option, given the company’s willingness to surprise markets in recent years.
Barry Callebaut declined to comment directly on the report, saying it does not respond to market rumours.
A spokesperson said the group continues to make strong progress on its BC Next Level strategic investment programme, with priorities including deleveraging, preparing for renewed sustainable growth and reducing exposure to volatility.
Barry Callebaut’s ingredients are used in roughly one in four chocolate and cocoa products consumed worldwide.
Its operations span global cocoa sourcing, chocolate production for food manufacturers and premium solutions for gourmet and speciality customers.
For now, the reported talks underline how sustained turbulence in commodity markets is pushing even the most established food groups to reconsider long-standing business models.
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