Lindt & Sprüngli claims innovation and consumer confidence as key results growth drivers
Lindt at Sprungli at Sweets & Snacks Expo in Chicago. Pic: Neill Barston
Swiss premium chocolate brand Lindt & Sprüngli has cited key product innovation and increased consumer confidence visiting its stores as core drivers in creating organic growth of 10.8% to CHF 4.97 billion, reports Neill Barston.
The company acknowledged that it had been ‘another challenging financial year,’ but it expressed confidence in noting that its global regions had all performed positively, with a 15.7% uplift in results for North America and 16.6% ‘Rest of the World’ to further boost its annual performance.
Furthermore, Lindt & Sprüngli reported an increase in consumer traffic in its own stores and in the travel retail business at the start of the year thanks to the easing of health-related restrictions. Triggered by inflationary price increases and major geopolitical uncertainty, however, the economic environment and, consequently, consumer sentiment dampened in the key markets over the further course of the year.
In addition, the business also believed that the growth in its e-stores was also significant in creating added momentum for the business, which brought about an enhanced programme of engagement with online retailers. For this, it asserted that it had delivered clear positioning with high-quality products in the premium chocolate market.
Another significant aspect came in a tangible shift in consumer behaviour, with more people spending time with friends and family, which has positively impacted gifting sales, which it said had risen notable. Its flagship Lindor series grew strongly in all markets, a development that was further supported by the launch of new flavours. Further innovations in the praline, chocolate bar and seasonal product ranges also supported to accelerate growth.
As the company noted, currency effects, in particular the weakening of the euro and pound sterling, led to a slightly lower result in Swiss francs. In reporting currency, sales growth therefore amounted to 8.4%.
In terms of its precise breakdown of results, the company’s “Europe” region reported organic growth of 5.3%, which resulted in sales of CHF 2.30 billion, which was due to currency effects slightly below the previous year of CHF 2.33 billion. In Europe, Germany, France, the UK and Italy remain the most important markets, with good growth from a high sales base. For its part, the “North America” region, Lindt & Sprüngli posted organic growth of 15.7%, resulting in sales of CHF 2.03 billion (previous year: CHF 1.69 billion). All subsidiaries – including Russell Stover – recorded double-digit growth year-on-year.
The “Rest of the World” region reported growth with sales of CHF 0.65 billion (previous year: CHF 0.57 billion), with the business also reporting solid performance for other high potential markets including Brazil, Japan and China, as well as travel retail progressing well. As a result, the company concluded that it was confident of meeting its half-year results of gaining profit margins around 15% for the complete financial year.