Lindt & Sprüngli is a global leader in premium chocolate and prides itself on a tradition dating back 170 years which began in Zurich in 1845. Today, quality chocolate is made by Lindt & Sprüngli at its 12 production sites in Europe and the USA. Our products are sold all over the world by many subsidiaries and branches, as well as a comprehensive network of independent distributors spread across more than 120 countries. With a total workforce exeeding 13,000 employees, the Lindt & Sprüngli Group reported sales worth CHF 3.65 billion in 2015.
Switzerland
Chocoladefabriken Lindt & Sprüngli (Schweiz) AG achieved sales growth of CHF 359.0 million in 2015 (previous year: CHF 361.8 million). In the year under review, special focus was placed on LINDOR, with numerous marketing campaigns helping to generate additional growth.
In January 2015 the Swiss National Bank abandoned its exchange rate floor of CHF 1.20 per euro, triggering a sharp rise in the value of the Swiss franc. This inevitably had consequences for the Swiss economy, which was already struggling with a significant deterioration in consumer sentiment, more Swiss consumers shopping in neighboring Europe, falling tourist numbers at home, and subdued export activity. The overall chocolate market suffered a sharp decline in this challenging environment, with the exceptionally hot summer and late onset of winter intensified this development. Aggressive pricing and distribution through discount channels were therefore the main sources of competitive pressure. These difficult market conditions were also a challenge for Lindt & Sprüngli, with sales stagnating (–0.8 %) compared to the previous year. Despite this, the Swiss subsidiary hung on to its premium positioning and selective distribution, focusing consistently on quality and innovation as it continuously expanded its market share.
In the year under review, the main focus in Switzerland was on our top-selling brand LINDOR. Growth was boosted by a series of campaigns such as the launch of six new seasonal recipes, the sampling of one million LINDOR balls on Valentine's Day and the airing of a new TV advertising campaign. Not only LINDOR, but also the brand CONNAISSEURS posted record market shares, clearly confirming its market leadership in the assorted pralinés segment. A number of new limited editions were brought out to celebrate Valentine's Day, as well as seasonal offers for autumn and Christmas.
For decades now, our classic LINDT chocolate tablets have stood for a unique milk chocolate experience, top quality, and Swiss tradition. In the year under review, these core values were at the center of a publicity campaign with the slogan “Savor Switzerland”, designed to reinforce the dominant market position of these chocolate tablets. August saw the launch of the innovative GRAND PLAISIR tablets, whose crisp and crunchy texture provides an unforgettable taste sensation. Supported by a nationwide billboard campaign, the new chocolate tablets have established themselves extremely well in the Swiss market and exceeded our high expectations.
In the important seasonal business, LINDT managed to further extend its existing leadership through new product offerings and innovative marketing activities. Over the Easter period the traditional GOLD BUNNY once again proved very popular, achieving a new record of more than 6.5 million sold in 2015. A new promotion, “Give your GOLD BUNNY a name”, was launched in cooperation with several media partners. This targeted the major Swiss cities and generated over five million new contacts. At Christmas, the seasonal offering benefited from two new and trendy praliné creations in the popular CONNAISSEURS line.
Over the course of 2015 the capacity for chocolate mass production in Kilchberg was significantly expanded in order to strengthen Switzerland's standing as a production location in the long run. In addition, the Lindt Chocolate Competence Foundation plans to build a Chocolate Competence Center at our Kilchberg headquarters. The new center will not only focus on research and development, but also on showcasing and communicating know-how and expertise in chocolate-making, thereby helping to reinforce and enhance Switzerland's standing as a center of excellence for chocolatemaking.
Highlights
Switzerland
LINDT brand ambassador Roger Federer joins competition winners in making chocolate masterpieces.
Switzerland
The Lindt Chocolate Competence Foundation is planning a new Chocolate Competence Center in Kilchberg.
Germany
Our popular LINDT TEDDY is given a suitable outfit to tie in with Munich's Oktoberfest.
Germany
With sales worth EUR 458.1 million (previous year: EUR 428.1 million), Chocoladefabriken Lindt & Sprüngli GmbH once again reported above-average growth of 7.0 % and further increased its market share.
Germany's economy experienced a modest upturn, driven mainly by increased private consumption on the back of rising disposable incomes. Although the chocolate market as a whole was declining in volume terms, this was offset by price increases which produced modest growth overall. Chocoladefabriken Lindt & Sprüngli GmbH also managed to increase its sales by 7.0 %. This above-average result is attributable to the focus on successful classics such as LINDOR, EXCELLENCE and GOLD BUNNY, as well as a series of product innovations. The young lifestyle brand HELLO gave fresh impetus to the Easter business with a number of novelties. Our traditional GOLD BUNNY also caused a splash with a limited “animal print” edition. The new line “I mog di” (Bavarian for “I'm sweet on you”) was launched in autumn, while Christmas sales were boosted by a new “Owl” range of hollow chocolate figures.
The findings of a cross-industry survey to find the best product brand provided welcome confirmation of our successful marketing activities, with LINDT ranked in the top three out of a field totaling 279 brands from 39 branches.
The strategic expansion of the facilities at the Aachen production site was successfully continued, creating capacity for further growth. A new staff restaurant was opened in 2015 as part of this project.
FRANCe
Lindt & Sprüngli France SAS increased its sales by 4.9 % to EUR 329.5 million (previous year: EUR 314.0 million), once again making LINDT one of the fastest-growing chocolate brands in the French market.
The retail price war that has been waged for some years led to the merger of a number of trading partners. This has created a heavily concentrated retail scene, with inevitable effects on the prices of most consumer goods. In this challenging environment, the overall chocolate market suffered a modest decline in value terms. Despite this, Lindt & Sprüngli France SAS managed to position itself as the country's second- biggest chocolate manufacturer and achieve record growth in its market share.
LINDT further strengthened its position as the leading tablet brand by launching many product innovations. New taste variations were added to the key tablet lines EXCELLENCE and CREATION, and a completely new tablet concept, CONNAISSEUR, was launched with a new line of filled chocolate bars. This new product line is already very popular. In France LINDT has not only built a reputation as the most innovative chocolate brand, but has repeatedly finished top in the rankings of the most important innovations.
LINDT is also winning over consumers in the seasonal business with attractive new concepts. The very popular line of CHAMPS-ÉLYSÉES assorted pralinés was extended to include a limited edition in gold. The CONNAISSEUR range was enhanced by the latest creation from our Master Chocolatiers, SAVEURS DU MONDE pralinés, while the Christmas offering was spiced up with an eye-catching CREATION PETITS ÉCLAIRS box, a chocolate interpretation of the classic French delicacy.
In the year under review, LINDT's sales team received the Sales Force of the Year 2015 award from the trade paper “LSA Commerce & Consommation”. This award is recognition of the commitment of our sales team, which regularly visits around 6,700 shops to ensure that LINDT products are displayed to maximum effect.
After the capacity for manufacturing tablet chocolate was expanded at the Oloron-Sainte-Marie production site, additional investments were made in optimizing pralinés production. This is the core competence of our factory in south-west France, which exports specialty products worldwide.
ITALy
Lindt & Sprüngli SpA and Caffarel SpA achieved a consolidated result of EUR 216.6 million (previous year: EUR 216.1 million) and managed to expand their market share in a very challenging economic environment (+0.2 %).
After years of steady economic decline and rising unemployment, the Italian economy showed signs of stabilizing in the second half of 2015. Various measures taken by the government improved the labor market situation, boosting consumer sentiment in the process. The Expo 2015 world fair in Milan made a substantial contribution to this positive development.
Despite this, the overall chocolate market continued to stagnate and the commercial environment remained tense. There was a shift in consumption from milk chocolate to darker chocolate, while the long-term trend away from pralinés to chocolate tablets stabilized again in the second half of the year. The decision to focus marketing initiatives on the LINDOR and EXCELLENCE lines once again paid off for Lindt & Sprüngli SpA, with both key brands winning substantial market shares. Product innovations such as LINDOR Gianduja and EXCELLENCE Arabica Intense were well received by the trade, as well as by end consumers. EXCELLENCE did particularly well, achieving strong double-digit growth through its unique product offering in the popular dark chocolate segment, backed up by a TV advertising campaign.
LINDT played a prominent role at the Expo 2015 world fair in Milan, showcasing an impressive chocolate- making facility. This not only provided the opportunity to communicate LINDT values, but also to explain chocolate production and the unique properties of LINDT chocolate. Every day LINDT Master Chocolatiers worked on creations that sweetened the experience of around one million visitors in total.
Caffarel SpA continued to suffer from distribution occurring exclusively through the traditional trade in Italy, which once again posted a steep decline. However, the company is doing its best to combat the situation with measures such as the optimization of the product portfolio, the relaunch of selected key products, and a new presence at the point of sale. In the export business, markets in Japan and Saudi Arabia posted particularly impressive gains. CAFFAREL also had its own stand at Expo 2015 in Milan and was able to generate millions of new contacts during this time.
United Kingdom
Lindt & Sprüngli (UK) Ltd. looks after the markets in the UK and Ireland. Last year's sales of GBP 136.0 million (2014: GBP 121.0 million) reflected a very strong business performance, with impressive double-digit growth of 12.4 %.
Lindt & Sprüngli (UK) Ltd. is in charge of the markets in UK and Ireland and continued its strong performance of previous years, achieving double-digit growth in its home market. LINDOR generated an impressive rate of growth thanks to numerous new launches, targeted sponsoring activities and a comprehensive marketing campaign. Individual highlights included the successful launch of the new recipe “Milk Orange” as well as rising demand for its popular “Strawberries & Cream” recipe, especially around Valentine's and Mothers' Day. The LINDOR milk sticks, designed for snacking, also did very well and achieved significant growth in a challenging competitive climate for impulse buys. Thanks to a strong presence in the media and at selected events such as the “Taste of London” and the “BBC Food Show”, 2015 was another solid year for the EXCELLENCE line. The presence of our GOLD BUNNY was once again boosted by a nationwide treasure hunt campaign. As a result, substantial market share gains were achieved across the board.
Highlights
Austria
An eye-catching display with the LINDT TEDDY in the famous Tyrol department store in Innsbruck.
Italy
LINDT Master Chocolatiers display their chocolate-making skills to millions of visitors at Expo 2015 in Milan.
USA
LINDT adds a sweet note to the famous Golden Globes awards ceremony in Hollywood for the first time.
NORTH AMERICA
Together, Lindt & Sprüngli (USA) Inc., Lindt & Sprüngli (Canada) Inc., Ghirardelli Chocolate Company and Russell Stover Inc. generate cumulative sales of USD 1,626.6 million (previous year: USD 1,309.2 million), equivalent to growth of 24.2 % and contains the consolidation of Russell Stover for the entire twelve months in 2015 (2014: four months). This result strengthens the Group's presence and market position as clear no. 3 in the world's biggest chocolate market. The integration of Russell Stover into the North American business is progressing according to plan.
In 2015 the North American economy continued to pick up, as confirmed by the fall in unemployment and the increase in the US gross domestic product (GDP). By comparison, growth in the overall chocolate market was significantly weaker, mainly because manufacturers had to pass on rising raw material costs to consumers in the form of higher retail prices. By contrast, the premium chocolate segment yet again grew faster than the chocolate market as a whole, driven mainly by the Lindt & Sprüngli companies. LINDT and GHIRARDELLI were once more the fastest-growing premium chocolate brands in the USA and managed to expand their market shares.
With solid sales growth of 8.1 %, Lindt & Sprüngli (USA) Inc. further asserted its leadership in premium chocolate products, thereby making an important contribution to this segment's rapid expansion. Sales were driven by successful market launches and extended offerings, including a range of innovative taste variations under the LINDOR and EXCELLENCE labels. In the Easter business, another LINDT GOLD BUNNY Celebrity Auction was held for a charitable cause, further strengthening the GOLD BUNNY's market position as an Easter icon. The Christmas season opened once again with the presence of the LINDT Master Chocolatiers float at the traditional Macy's Parade in New York. This event is extremely popular and not only attracts big crowds, but is also watched on TV by millions of viewers. The most memorable highlight of 2015, however, was LINDT's debut appearance at the world-famous Golden Globes awards ceremony in Hollywood. On top of that, the company has developed its own marketing campaign for TV viewers. This is the perfect platform for inspiring even more American consumers to become fans of the LINDT brand. In addition, more investments were made in 2015 in the expansion of production facilities in Stratham, New Hampshire, as well as a new distribution center covering an area of almost 40,000 ft2 in Carlisle, Pennsylvania. These initiatives, along with many other investments in infrastructure and personnel, lay the foundation for further dynamic and successful growth at LINDT USA.
Ghirardelli Chocolate Company achieved sales growth of 7.1 %, maintaining its track record as one of America's fastest-growing chocolate companies. This growth was achieved through an increase not only in the volume but also the value of sales. Demand for premium chocolate was boosted in part by innovative “mini” formats. GHIRARDELLI MINIs are designed to appeal to a younger audience and further enhance demand for premium chocolate in new households. The flagship SQUARES line also had another impressive year, driven mostly by innovations and popular recipes such as caramel and mint. With its very high cocoa content, the INTENSE DARK line achieved double-digit sales growth, mainly thanks to innovative recipes and dark premium chocolate's growing appeal to consumers. GHIRARDELLI also has very extensive baking expertise. These skills helped to produce a strong and profitable result in this line of business, not only with professional customers such as kitchen chefs and baristas, but also with end consumers. GHIRARDELLI is the only premium brand in the US baking segment to achieve growth and win double-digit market shares with products such as chocolate chips, tablets, cocoa, and other innovations.
Russell Stover was in private ownership before being taken over by Lindt & Sprüngli in September 2014. Its integration into the Lindt & Sprüngli Group is progressing well and running according to plan. In the year under review, the opportunity was taken to perform a certain amount of restructuring in specific areas such as product development, sales, marketing, and finance. For example, the product range was optimized and promotions as well as activities that were either unprofitable or incompatible with the business strategy were eliminated. The company was able to further strengthen its dominant position in the boxed chocolate category during the very important seasonal business at Christmas, Easter and Valentine's Day. With more than 20,000 of its own product display stands, Russell Stover was able to continue to expand its sales presence in shops across the USA and Canada.
In the year under review, Lindt & Sprüngli (Canada) Inc. celebrated not only its 20th anniversary, but another set of excellent results. LINDT is still number one in Canada's premium segment, and consumer awareness of the brand has grown enormously. Thanks to the strongest brand value in the Canadian market, sales grew by 12.7 %, driven by an equal focus on the two most popular key brands LINDOR and EXCELLENCE. The strength of the brand, combined with exceptional customer loyalty, helped to drive sales momentum in a challenging market environment.
REST OF EUROPE
Lindt & Sprüngli (Austria) Ges.m.b.H. ended the financial year with sales growth of 5.3 %. Thanks to the focus on core products, as well as new product launches and solid advertising support, LINDOR and EXCELLENCE continued to be the main growth drivers. Sales of the GOLD BUNNY rose sharply once again in the important Easter business. Lindt & Sprüngli (España) SA managed to expand its market share in what is still a very price-sensitive Spanish retail environment, in both the tablet and pralinés segment. This was mainly attributable to the strong performance by the core brands LINDOR and EXCELLENCE. Lindt & Sprüngli (Nordic) AB once again reported strong growth in the double digits, driven mainly by the key markets of Sweden and Norway. With the launch of a suitable Pick & Mix range in food retailing, LINDOR has become more and more popular, while the EXCELLENCE brand also made significant progress. Lindt & Sprüngli (Czechia) s.r.o. continued to enjoy rapid growth, and was able to generate double- digit growth. The subsidiary gained market shares especially in the pralinés segment and from sales of the GOLD BUNNY. Lindt & Sprüngli (Poland) Sp. z o.o. reported satisfactory sales growth driven by the strong performance of LINDOR and EXCELLENCE. Lindt & Sprüngli (Russia) LLC. turned in impressive results in the very challenging Russian market, where it is the fastest-growing chocolate producer. LINDOR's sales growth was supported by the biggest tasting campaign ever, reaching some 2.8 million consumers. The EXCELLENCE brand also posted a rate of growth well above the average for that category, assisted by a strong marketing campaign.
REST OF THE WORLD
Lindt & Sprüngli (Australia) Pty. Ltd. reported impressive sales growth of 19.1 %. The key brands LINDOR and EXCELLENCE made the biggest contributions to this excellent result. The innovation LINDOR “Dark Sea Salt Caramel.” was well received by consumers and had an exceptionally positive impact on LINDOR's performance in general. Both LINDOR and EXCELLENCE increased their market share and confirmed their clear market leadership in their respective categories. In a dynamic market, LINDT expanded its market share in all categories and was once again the fastestgrowing brand.
The subsidiary Lindt & Sprüngli (South Africa) Pty. Ltd. managed to increase sales considerably, achieving double-digit growth. LINDT continues to be the fastest-growing chocolate brand in South Africa. This positive result was mainly due to the successful expansion of the HELLO range with additional retail partners, and the exceptional performance of the LINDOR brand. Lindt & Sprüngli's regional office in Dubai, which serves markets in the Middle East, India, and the rest of Africa, also reported solid growth. The increase in sales and market shares in the United Arab Emirates, Lebanon, Egypt, and Iraq is worth particular mention. The focus on building up new business units in emerging markets in sub-Saharan African countries helped us to treble the local business and break into a significant number of new national markets.
Lindt & Sprüngli (China) Ltd. reported satisfactory results in a challenging market environment. Business performance in China's biggest cities was satisfactory thanks to a consistent focus on LINDOR Cornets and EXCELLENCE tablets. LINDT had a good year in Hong Kong too, with strong growth in the seasonal business over the New Year. Thailand also managed to produce positive results in an adverse environment. In Singapore, LINDT has achieved substantial growth through its LINDOR and EXCELLENCE lines, and has established itself as a leading premium chocolate brand.
Lindt & Sprüngli Japan Co. Ltd. reported strong growth in the double digits. The 15 LINDT shops in Tokyo and Nagoya play a key role in raising brand awareness in this important chocolate market. As a result, Japanese retail sales of specialty products were very strong. Sales of LINDOR balls and the EXCELLENCE dark chocolate tablets rose significantly. In addition, over one million LINDOR balls were provided for sampling by Japanese consumers, winning over many new customers in the process.
In Latin America the Brazilian market stands out the most. The joint venture entered into with the CRM Group in the previous year led to a rapid pace of growth. The LINDT Global Retail concept has gone down well with Brazilian consumers, and another 16 Boutiques were opened in São Paulo and Rio de Janeiro over the course of 2015. Combined with distribution via local retail channels, LINDT is focusing all its efforts on becoming the leading premium chocolate brand in Brazil.
Highlights
AustraliA
Official opening of the 270,000 ft2 office building with a production and warehouse facility in Marsden Park, Sydney.
Canada
Our Canadian subsidiary celebrated its 20th anniversary with a range of different activities.
RussIA
Sampling of LINDOR truffles on a massive scale in Moscow at the traditional celebrations to mark the city's birthday.
DUTY FREE / TRAVEL RETAIL
In the Duty Free / Travel Retail segment, LINDT is represented at over 500 airports worldwide, allowing the presence of the LINDT brand to be continuously strengthened. Shop-in-shop concepts are located especially at strategically important airports with a high footfall such as Dubai, Delhi, São Paulo, and other major international hubs. The popular product range includes very appealing gift ideas and numerous new products. The product presentation is rounded off with exciting live demonstrations by LINDT Master Chocolatiers and attractive promotions. In view of the difficult economic and political situation in many countries, plus massive currency translation effects, 2015 was a very turbulent year for the Travel Retail chocolate market. Despite this, Lindt & Sprüngli managed to expand its market share thanks to a high percentage of innovation and promotional activities. Highlights included the double-digit growth achieved by the LINDOR range and the successful launch of the LINDT Diva range, which won the DFNI industry award for the best product innovation 2014 / 2015. This, plus many other attractive product offerings such as the LINDOR limited edition or exclusive travel edition of the NAPOLITAINS line, were significant growth drivers and made a major contribution to LINDT's leading position in this segment.
GLOBAL RETAIL
Global Retail can look back on another excellent financial year, with sales increasing to CHF 378.5 million, and has now become a major contributor to the success of the Lindt & Sprüngli Group. Distribution through our own shops and chocolate cafés play a key role in strengthening the image and awareness of the LINDT brand worldwide. Depending on the location, the range not only includes LINDT chocolate but also handmade specialties from the Master Chocolatiers, along with a big selection of popular Pick & Mix products. In order to promote this positive development and lay the foundation for additional growth, many new shops were opened in the year under review in Europe (Germany, France, Italy, Sweden, Switzerland, and Spain) and also in South Africa, Brazil, and Japan. GHIRARDELLI's own shop and restaurant chain attracted around 10 million visitors in 2015 and its presence was further expanded with the opening of a new flagship store in Chicago's landmark Wrigley building. The original Chocolate Shop on the famous Ghirardelli Square was refurbished in 2015, assuring its place as one of the most popular tourist destinations in San Francisco. Since 2015 the 35 or so Russell Stover / Whitman's own stores in America's central belt also belong to the Global Retail Division and are generating growth for that region. More information on Global Retail can also be found on page 41 onwards.
Procurement
Cocoa bean prices continued to rise in 2015. This was mainly due to persistent speculation on commodity futures exchanges and poor harvest yields in Ghana, the world's second-biggest producer of cocoa beans. In the dried fruit segment, prices for hazelnuts and almonds rose as a result of low yields caused by frost damage to the hazelnut crop in Turkey and the drought affecting the almond crop in California. By contrast, prices on the global milk market sank to historic lows in the year under review. This was due to falling demand in China and the embargo on sales to Russia, while production volumes were kept at the same level. Milk prices in Switzerland remained on a high level. Sugar prices continued to fall on the world market and in the EU due to abundant harvests and falling demand. Sugar prices in Switzerland only followed this trend to a limited extent. Prices of packaging materials were relatively stable and in some cases slightly down.
Sustainabilty
Sustainability and socially responsible business conduct are central features of Lindt & Sprüngli's corporate philosophy. All the related aspects are dealt with at top management level and, additionally, are monitored by the Board of Directors' committee. Detailed information on our activities and progress in the area of sustainability are provided in a separate publication, the Lindt & Sprüngli Sustainability Report. It can be downloaded online from the following link:
http://www.lindt-spruengli.com/media/publications/