Basel, Switzerland – April 11: Easter Rabbits of Chocolate Lindt are seen in a store on April 11, 2025 in Basel, Switzerland.
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Cocoa prices will remain high despite potential declines in a contribution and sustainable cost, said Adalbert Lechner, Confectionery Company Lindt and Sprüngli, Adalbert Lechner.
“Cocoa prices will drop,” Lechner to Carolin Roth from CNBC on April 11, adding that he did not believe that cocoa prices “will never come back to the levels where they were before.”
The factors including the increase in input costs, including sustainability programs and fair trade initiatives, mean that the “cocoa price must be higher than before,” he said.
Lechner's remarks follow an increase in cocoa prices to record vertices in 2024, driven by bad weather, illnesses and epidemics of pest in West Africa which caused a supply deficit. With increasing cocoa planting and high prices destroying demand, chocolate manufacturers are faced with a double -edged sword.
“We see a drop in chocolate markets as in the United States last year, (leading to) more than 5% (of) volume decreases,” he said.
However, it is not only the resumption of the supply that reduces demand, told Rabobank Oran Van Dort, raw material analyst in Rabobank, told CNBC “Squawk Box”.
“Higher retail prices, confectioners using different methods for making chocolate that uses less cocoa, an increase in weight loss drugs”, “cause a” destruction of demand, “he said.
Lindt & Sprüngli showed resilience despite the record volatility of cocoa markets with an impact on the chocolate industry. The company announced an operating profit more than planned for the year in full year in 2024, with sales up 5.1% in Swiss francs during the period.
Lechner allocated this performance to “high premium brands with high desirability for consumers”.
Throughout the industry, chocolate prices have increased, noted Van Dort de Rabobank, “many major chocolate confectioners have mentioned that they had increased prices and transmitted them to consumers”.
He added: “They could intend to do it more in the future.”
While Lindt & Sprüngli is “very cautious” about the transfer of cocoa costs raised to consumers, Lechner has recognized that “the extent of these increases in raw material has also forced us in recent years to spend a certain amount to consumers”.
However, he said that his business “had never participated in a price” and that consumers paying “ten cents or 20 cents more do not make a difference. You buy this product because you want to show the appreciation”.
Price
Speaking in front of the 90 -day break from US President Donald Trump on prices for countries such as Switzerland, the CEO said that he did not expect a significant impact on Lindt's affairs.
“We employ nearly 4,000 people in the United States, we run five factories there,” he said. “Thus, the impact of all these prices and the trade war is relatively limited to us.”
The United States has previously pointed out the leniency towards foreign companies that establish local production facilities, which has incentives to encourage operations in the United States rather than abroad.
However, he added that, despite localized production “because cocoa, unfortunately, does not develop in the United States, there is a 10%tariff plan, so it would further increase chocolate prices in the United States”
“(The increase in cocoa bean migration costs and production caused by prices will mean that” consumption and grounding (cocoa) will suffer if the reciprocal rates remain in place “, declared Van Dort to CNBC.” The prices will lead a lot to higher prices. “
By reflecting on the global macroeconomic environment, the CEO of Lindt recognized a relaxation in the feeling of consumers, as well as the insecurity of employment and an uncertain inflationary environment.
“Consumers are not sure at the moment,” he said, noting that customer confidence in China has also been “relatively low”.
However, his prospects for the future have remained optimistic.
“I think that the 90 -day postponement is a very optimistic sign,” Lechner told CNBC. “It is very positive. Obviously, the American government is open to negotiations, and I would say that I am optimistic that we will see less impact as we expected a week ago.”
