Swiss chocolatier Lindt & Sprüngli will raise its prices again in 2024 and 2025 to cope with the rise in cocoa prices, after assets have already risen by an average of 10.1% in 2023.
• Also read: [PHOTOS] In a remote Scottish town, a chocolatier is chosen for the Oscars
The group, which released its annual results on Tuesday, saw bills for its raw materials skyrocket with cocoa prices. They are at their peak due to a production deficit due to heavy rains that damaged crops and a pod disease.
At the end of February, a ton of cocoa exceeded US$6,500 in New York, an increase of more than 150% since January 2023, and reached almost 6,000 pounds sterling in London, an increase of more than 170% since the beginning of last year.
The chocolatier therefore warned that it would have to negotiate further price increases in 2024 and 2025 “if cocoa prices remain at this level”.
For 2024, the group is aiming for a “mid-single-digit” increase of around 5%, explained managing director Adalbert Lechner at a press conference.
According to calculations by Patrik Schwendimann, an analyst at Zürcher Kantonalbank, the group would have to increase its prices by “around 12 percent” by 2025 if prices remain at this level, “which brings with it the risk of volume pressure.”
“We hope that the increase will be significantly lower,” said the head of Lindt & Sprüngli, without confirming this estimate. The group wants to remain “cautious” about price increases because “we know consumers are sensitive to them,” he insisted.
For 2025, “we have to monitor the development of cocoa prices” and make a decision “by the middle of the year,” he said.
In 2023, the Swiss chocolatier posted a better-than-expected net profit, rising 17.9% year-on-year to 698.5 million euros, thanks in particular to a lower tax burden. The country also benefited from the revival of tourism as its chocolates were often sold in duty-free shops at the airport.
In 2023, “consumers have tightened their belts,” Mr. Lechner acknowledged, but the so-called “premium” segment, which corresponds to the high-end share of chocolate sold in supermarkets, “has held up well,” he said insists.