Volumes Tumble Amid Unprecedented Price Rises (Image Credits: Pexels)
Lindt & Sprüngli delivered impressive financial results for 2025, yet company leaders highlighted mounting pressures on chocolate sales volumes extending into the new year.[1][2]
Volumes Tumble Amid Unprecedented Price Rises
Last year marked the first time Lindt & Sprüngli experienced a negative impact on volumes from aggressive pricing, with volume/mix falling 6.6% even as organic sales growth reached 12.4%.[1]
CEO Adalbert Lechner noted that prices rose more than 40% over the past four years, a level unseen before, and only began affecting volumes in 2025. The company achieved sales of SFr5.92 billion, up from the previous year, while net profit climbed 8.1% to SFr726.7 million. This growth outpaced rivals in a stumbling chocolate market. However, the shift relied heavily on a 19% pricing increase rather than demand strength. Lechner stressed the urgency of restoring volume growth.[1]
Fresh Price Increases on Horizon for 2026
Executives outlined plans for continued price adjustments in 2026, including mid-single-digit rises across the board and a double-digit hike during the Easter period. These moves aim to counter ongoing cost pressures but risk prolonging volume declines. Lechner explained, "We were forced to increase prices by more than 40% in the last four years, and for three years we did not see any impact on volumes. Last year was the first year where we saw a slight negative volume/mix effect of minus 6.6%. And for us, it's the clear priority – how to get back to volume growth as soon as possible."[1]
Volume/mix is projected to remain slightly negative for the full fiscal year, with expectations of a pickup to flat or positive levels in the second half. The company anticipates a return to volume-led expansion by 2027. Retailer negotiations complicated matters last year, particularly with Switzerland's Migros and in markets like France and North America. Lechner added that these frictions "did quite cost us some of the growth rates that we had intended."[1]
Cost Headwinds and Market Challenges Persist
Cocoa prices lingered about 50% higher than three years prior, compounded by structural issues like swollen shoot disease and geopolitical tensions in the Middle East. CFO Martin Hug highlighted broader concerns: "The big question is now, of course, where will the market go from here?… What I should also say is, when I look now into the future with the Iran crisis, et cetera, et cetera, you have cost pressure from other areas as well, not just cocoa. Packaging, material costs will go up if fuel prices go up, our costs for transportation will go up."[1]
Weak consumer sentiment in Europe and North America added strain, alongside reduced tourism flows impacting travel retail. Rising energy and fuel costs further squeezed retail operations. Lindt's historical data underscores the shift: from 2021 to 2025, average volume/mix stood at 2.1% with 8% pricing, contrasting sharply with 4% volume/mix and 2.5% pricing from 2006 to 2019.
- Organic growth averaged above expectations despite headwinds.
- Pricing became the dominant growth driver post-2021.
- Pre-2021 eras balanced volumes and modest price gains.
- Current cocoa volatility demands sustained pricing discipline.
- Geopolitical risks amplify supply chain vulnerabilities.
2026 Guidance and Market Response
Lindt & Sprüngli guided for 4% to 6% organic sales growth this year, with EBIT margin expansion of 20 to 40 basis points from 2025's 16.4%. These targets reflect confidence in premium positioning amid industry turbulence.[1]
Investors reacted cautiously, sending shares down over 11% to SFr10,750 following the announcement. The company maintains focus on profitability while navigating a high-cost environment. Official results are detailed in the 2025 annual report.[2]
Key Takeaways:
- 2025 sales hit SFr5.92bn on 19% pricing, despite -6.6% volumes.
- 2026 forecasts more price hikes, slightly negative volumes early on.
- High cocoa and input costs necessitate ongoing adjustments.
As Lindt & Sprüngli prioritizes margins in a volatile market, the path back to robust volume growth remains critical for sustained success. What strategies would you recommend for balancing prices and demand? Share your thoughts in the comments.
