Lindt posts 7.8% organic growth and remains optimistic in 2025 as it raises prices to combat cocoa costs
With cocoa prices rising 180% in the past year, Lindt’s latest results show strong organic growth of 7.8% to CHF 5.47 billion ( ($6bn)). They suggest that charging consumers more for their chocolate has not deterred them at the checkout.
Reporting its sales results in 2024, the Swiss chocolate maker said: “This increase was supported by mid-single-digit price increases to offset higher cocoa prices, as well as solid volume/mix development. All regions contributed to the sales growth.”
The Lindt & Sprüngli Group said it looks back on a challenging year characterized by record-high cocoa costs, substantial price increases, and weakened consumer sentiment.
“The cocoa market was volatile in the reporting year, with cocoa prices remaining at a historic high by the end of 2024. Offsetting the high cocoa costs forced the Group to adjust its pricing, which will be further required in 2025.”
Vontobel analyst Jean Philippe Bertschy told Reuters: "Very robust sales growth, demonstrating Lindt's pricing power, which led to further market share gains. We believe that Lindt is very well positioned to navigate through 2025, which will be a very challenging year for the chocolate industry.”
The company expects its annual operating profit margin to be at least 16.0%, the top of its earlier forecast range.
Mars UK doubles its profits
The UK arm of Mars Wrigley Confectionery, the parent company behind chocolate brands including Snickers, Bounty, and M&M’s, has announced its profits jumped almost 100% from £105 million in 2022 to £206.2 million ($251.71m) in 2023.
“The performance for the period reflects the investment into products, brands, processes, and consumer relationships as part of our ongoing strategy to reflect and adapt to anticipated changes in consumer attitudes and behaviour, as well as increase the focus of key areas of the marketplace,” it said in its earnings release.
Mars has been expanding its business in the UK through high-profile deals, including the takeover of luxury high-street brand Hotel Chocolat for £534 million.
Hershey headhunters begin search for a new CEO
Following the news earlier this week that Michele Buck, Hershey CEO and president, is to retire in the summer, cocoaradar.com understands executive search firm Egon Zehnder will lead its search for a new chief executive officer.
In the meantime, The Hershey Company announced two leadership appointments. Andrew Archambault has been named president of the US Confection, and Veronica Villasenor has been named president of Salty Snacks.
Both appointments are effective 3 February, 2025.
Archambault, who joins Hershey from Keurig Dr Pepper (KDP), and Villasenor, a 22-year veteran of the company, will be part of Hershey's Executive Committee. They will work closely with the team to continue advancing the company's priorities and play key company-wide leadership roles. Villasenor succeeds Kristen Riggs, who left Hershey after 20 years to pursue other opportunities.
Cocoa prices fall slightly
Cocoa prices fell moderately on the markets due to the concern that high prices are causing demand destruction for cocoa. On Tuesday, Brazil reported that Q4 cocoa processing fell -5.5% y/y to 59,589 MT.
Q4 European, Asian, and North American cocoa grinding reports will be released later in the week.
Shrinking global cocoa stockpiles are limiting losses in cocoa. ICE-monitored cocoa inventories held in US ports have been trending lower for the past 1-1/2 years and fell to a 20-year low Tuesday of 1,300,731 bags.
Traders report that global cocoa shortages are so large that it's now cheaper to take delivery of supplies through the New York exchange than buying in the physical market.
Recent heavy rain in West Africa has led to reports of high mortality rates of cocoa buds on trees, pushing the prices sharply higher.