The Secret Behind the Lindt & Sprüngli Success Story

Hi Everyone,

Last week saw the Annual General Meeting of one of my favourite companies, chocolate manufacturer Lindt & Sprüngli. If you’ve been following FunkyForty for awhile now you will know that it’s tradition for me to write about the meeting each year.

Last year the title was about chocolate making millionaires – see post here. At the time the share  price was CHF 66’000. One year later, the share price has increased over 13% to CHF 75’000!

What is the secret behind the Lind & Sprüngli success story? Why do they seem to be going from strength to strength? Listening to what the Chairman of the Board, Ernst Tanner had to say last week made the answer crystal clear…

 

The Secret Behind the Lindt & Sprüngli Success Story

The secret behind the Lindt & Sprüngli continuing success story is their forward thinking strategies.

The following 4 initiatives are some of the main strategies currently in place:

1. Sustainability

   Sustainability is currently a real trend word and slowly more and more people are beginning to take the topic seriously. Lindt & Sprüngli have already actively had a sustainable Cocoa Farming program in place since 2008.

   “The aim of the Program is to promote more effective cocoa-growing methods, thereby bringing a lasting improvement to the living standards of the farmers and their village communities.”

   Currently 79% of the cocoa beans used are certified as having been farmed in a sustainable manor. By 2020 the number will be 100%.

    

   

2. Chocolate Competence Centre

The chocolate competence centre will also contain the largest chocolate shop in the world.  Planned to open in 2020, to mark the 175th anniversary of Lindt & Sprüngli.

A must see for everyone to be sure. Five floors of multi media interactive exhibition with an 8 meter high Lindor Chocolate Fountain – the largest in the world!

The new centre is set to become a fabulous day trip for 350’000 chocolate fans from both Switzerland and abroad!

 

3. Global Retail

Potential for added sales was seen in the retail area. Global Retail was established in 2009. Such a fruitful strategy that be the end of 2017 the Lindt & Sprüngli group has 410 owned shops throughout the world.

Revenue from Global Retail alone over CHF 500 million in 2017 (over of 12% total revenue).

 

4. Global Growth

Lindt & Sprüngli are already one of the worlds major players in the chocolate industry. Not ready to sit back and relax, 5 new growth markets have been identified for further development:

Russia – did you know the most popular drink in Russia is Tea (not Vodka), and the Russians love eating chocolate with their tea! In fact Russia is the 2nd largest consumer of chocolate worldwide!

Japan – unlike most countries in Japan, it’s the women that gift their favourite men with chocolates on Valentines day! On White Day it is then the mens’ turn to give chocolate to women. A tradition not to be missed by a chocolate manufacturer!

Brazil – chocolate features huge as part of family celebrations in Brazil. With the economy on an upward trend 50 new Lindt & Sprüngli shops are planned for Brazil by 2020.

South Africa – the Hello product line is particularly popular here due to it’s wonderful colourful packaging. With a thriving and growing economy and a new love for premium market it’s the perfect place for Lindt & Sprüngli to grow.

China – despite being in the Chinese market since 2012 with double-digit growth each year, the chocolate consumption per capita is only 100g (well over 1kg in most other countries). That’s serious growth potential!

 

2017 in Summary:

Despite a saturated chocolate market in Europe, difficult conditions in the USA and continued price pressures from trading partners:

•  4.8% growth
• 7.8% increase in net profit
• 5.7% increase in dividend!

More key figures here

 

Thank you to Lindt & Sprüngli for making the World a Sweeter place!

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Wishing you all a chocolate sweet day!

nb: all images taken from Lindt & Sprüngli

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