Lindt & Sprüngli reports impressive organic GTR growth for 2023

By Benedict Evans |

 

Lindt Chocolate

Despite challenges globally, demand for premium products remained strong in all regions, especially the North American market.

Premium confectionery brand Lindt & Sprüngli has reported 20.1% organic sales growth for its GTR business in the financial year 2023. The growth in the reporting period was supported by strong performances in all regions, which benefitted from a return to high passenger numbers. 

“Consumers are reaching for our Lindt, Ghirardelli and Russell Stover brands, even in a challenging environment, as demonstrated by the positive development in the past financial year,” noted Ernst Tanner, Executive Chairman of the Board of Directors of the Lindt & Sprüngli Group.

The ‘challenging environment’ Tanner references was (and still is) multiple in nature; the ongoing war in Ukraine, other geopolitical issues, the inflationary environment and depressed consumer sentiment in many countries saw a slowdown in the global chocolate market.

In spite of these challenges, Lindt & Sprüngli (Lindt) achieved organic double-digit sales growth for the third consecutive year, as the group’s sales rose 10.3% to CHF 5.2bn (£4.6bn) and operating profit (EBIT) margin increased from 15% to 15.6% in 2023.

Lindt says these results were driven by the launch of its Category Vision and numerous other novelty activations, with highlights from the 2023 financial year including: Lindt’s largest activation to date in travel retail at Heathrow Airport; an extended Diwali campaign and several product innovations appealing to different target groups and demand moments (think Lindor Salted Caramel and Swiss Masterpieces Pralines).

Lindt FY23

FY23 marks a third consecutive year of double-digit organic growth for the confectionery brand, which saw a 6.1% reduction in 2020 following the onset of the pandemic.

Peter Zehnder, Head of Lindt & Sprüngli Global Travel Retail commented: “As demonstrated by the results, 2023 proved to be a remarkable year for our Travel Retail business. With consumer demand for premium chocolate continuing to prevail, we are well positioned to meet the different needs of travelers, leveraging our varied portfolio and Category Vision.

We are committed to growing the premium confectionery segment in 2024 and beyond. We are looking forward to another strong year filled with strategic launches and activations that captivate travelers and enchant the world with chocolate.”

Regional breakdown

Lindt saw its highest sales growth in Europe.

Accounting for its withdrawal from the Russian market, European sales grew by 4.9% to CHF 2.4bn (£2.1bn). The region grew organically by 9.1%, drive primarily by success in Switzerland, Italy, the UK and Eastern Europe.

In 2023, the “North America” segment increased sales by 4.1% to CHF 2.11bn (£1.9bn) and in a letter to shareholders, Lindt added it is gradually expanding its presence in the US, the world’s largest chocolate market.

Lindt’s FY23 report noted the US market was largely unaffected by the high inflation rate and that its focus has and will continue to be on the premium segment, which centres around the Lindor, Ghiradelli, and Russell Stover brands.

Lindt also released its non-dairy “Lindor Oatmilk” truffles in the US in a bid to promote the use of its innovation program, which combines existing brands and products with new flavours and packaging.

Lindt Diwali

Lindt heavily invested in TV advertising and digital media in 2023, while continuing to promote region-specific activations like its Diwali offering.

In the “Rest of the World” segment, sales increased by 5.8% to CHF 683m (£606m), while organic growth sat at 12.9%.

Japan and Brazil were key markets along with Australia, which maintained its position as the top-selling country in this segment.

In contrast Lindt underperformed in China owing to depressed consumer sentiment, though it is confident results will improve.

“All regions contributed to our positive result last year. This shows that our long-term strategy is effective and that we are well-prepared for 2024,” said Adalbert Lechner, CEO of the Lindt& Sprüngli Group.

Lindt & Sprüngli Farming Program 

About 131,000 farmers in seven cocoa producing countries are now part of the Lindt & Sprüngli Farming Program.

In 2023, Lindt expanded its responsible sourcing activities, sourcing 72.3% of its cocoa, which includes beans, butter, powder, and chocolate mass, through its own Farming Program or other sustainability programs.

By 2025, Lindt is targeting is 100% procurement via its farming programme.

Lindt farming program

 The Program aims to increase the income of farming households and to con- tribute to the conservation of biodiversity and natural ecosystems. The program is also designed to address and, if possible, prevent child labor in the cocoa supply chain.

Furthermore, Lindt says it is committed to achieving near and long-term science-based climate targets and reaching net-zero greenhouse gas emissions across the value chain by 2050.

The Science Based Targets Initiative (SBTi) validated Lindt & Sprüngli ’s targets in 2023.

Bonuses for the board of directors are now linked to achieving selected sustainability goals, and recently it decided to expand group management with the addition of Nicole Uhrmeister as the new Chief Human Resources Officer.

Lindt says this move acknowledges the high level of importance of its employees.

READ MORE: Lindt welcomes the Year of the Dragon with gifting-focused activations

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