Lindt’s slice of the British chocolate market was cut last year despite efforts to keep prices low amid the rocketing cost of cocoa.
Revenues at the UK arm of the Swiss chocolatier grew 10% to £294m in the year to 31 December 2023, according to filings at Companies House. This was mainly due to the strong performances of its Lindor and Excellence brands.
However, its operating margin fell to 11.8% from 13.3% as it invested money in trying to maintain sales through low prices and advertising. Still, pre-tax profits rose to £38m, from £29m in 2022.
Lindt said the chocolate market was “highly competitive” and its market share had slipped from 7.7% to 7.1%.
Chocolate manufacturers have battled soaring prices for the past two years due to a global cocoa shortage coming from west Africa. In New York, cocoa prices doubled to hit record highs in 2024 after a 67% rise the year before.
Lindt had tried to compensate for the increased costs through manufacturing efficiencies, cost savings, and a forward-looking purchasing strategy, said a company spokesman.
“The remaining costs were subsequently passed on through price increases with the high cocoa price being the main reason.”
Moving into 2025, the price hike in cocoa will require further price increases assuming that global prices remain at current levels, the spokesman added.
In the global company’s half-year results in July, Lindt & Sprüngli Group said it had increased organic sales by 7% to £1.9bn supported by mid-single digit price hikes to offset the surge in cocoa prices.
Lindt said it would partly mitigate the impact of rising cocoa prices through strict cost management, but added further price increases would be needed.
“While energy prices and supply security have stabilised, and prices for other raw materials and packaging have remained constant, the cost of cocoa continues to be a challenge, reaching record levels,” Lindt said.
No comments yet