Lindt & Sprüngli achieves strong annual growth despite pandemic pressures

Premium chocolate group Lindt & Sprüngli has reported significant growth for 2021, with sales increasing 14% to CHF 4.59 billion in spite of pandemic challenges, reports Neill Barston.

As the business noted, its improved position was driven by  above-average increase in demand for products of highest quality and was able to significantly increase revenues in all countries and channels.

Significantly, the business revealed there was also notable growth of products within home consumption and a recovery for products for gift-giving occasions. In addition, the trend of double-digit growth in the online business was confirmed.

Lindor, the most important product line of the Lindt brand, contributed strongly to the encouraging sales growth of the Group. The successful launch of Lindor Double Chocolate represented a special highlight.

Moreover, Lindt & Sprüngli adapted to changing consumer needs including with its Excellence Cocoa Pure – a bar made exclusively from components of the cocoa fruit – or the continuously expanding range of vegan and sugar-reduced chocolates. Furthermore, Lindt Squares and Nuxor were launched in additional countries and recorded good success.

The difference results from the acquisition of the long-standing retail partner in Italy and a weaker Swiss franc. However, the stronger Euro, British pound as well as the Canadian and Australian dollar overcompensated for the weaker US dollar.

The outstanding sales results not only filled the gap caused by the pandemic in 2020, but also clearly exceeded the good result of 2019 – the year before the pandemic.

The European segment delivered an organic growth of 13.8%, with sales totalling CHF 2.33 billion (previous year: CHF 2.01 billion). All markets contributed to this good result. This included a strong performance in Germany, Italy, the UK, and Switzerland, all of which recorded double-digit growth.

Sales of own shops were affected by temporary closures and low customer frequency in tourist regions. By contrast, the traditionally important seasonal business at Easter and Christmas recovered well, and the online business also continued to grow strongly.

According to the company, which recently opened its House of Chocolate museum (pictured), near Zurich, Switzerland, it also attained positive results in North America. There, it gained organic growth of 10.7% to sales of CHF 1.69 billion (previous year: CHF 1.54 billion). In the US, Lindt & Sprüngli was able to grow faster than the overall market and again increased its market share in the world’s most important chocolate market.

As a result, the positions as number one of the premium suppliers and number three in the overall market were clearly maintained. The brands Lindt and Ghirardelli were the driving forces behind this growth in both retail trade and online channels. Meanwhile, the Rest of the World segment achieved 19.7%, reaching CHF 0.57 billion (previous year: CHF 0.47 billion).

The markets of Brazil, China, and Japan reported particularly good growth and continue to promise great sales potential. Sales via distributors in many smaller markets around the world also recovered very well. Despite the massive consequences of the lockdown, considerable growth was achieved in Australia and New Zealand, the strongest sales region in this segment. Duty Free, by contrast, still has not returned to pre-pandemic levels, but showed a significant recovery and has the potential to continue positively once further travel restrictions will be lifted.

In its outlook, the company said that that it was confident of achieving its targets for growth regarding its  medium/long-term goals, targeting of 5-7%  annual increases, with an operating profit margin of 15%. In the following years, an increase in the operating profit margin of 20-40

As a result, Lindt & Sprüngli will continue to grow well above the overall market. This will be possible thanks to a number of projects in the areas of geographic expansion, development of the growing online trade, the launch of new products, and the ongoing strengthening of the leader products Lindor and Excellence as well as seasonal business.