M&A, Corporate Finance. Managing Partner @ Bondo Advisors. I can help you sell your company!
🍫Lindt & Sprüngli vs. 🍬 The Hershey Company: The only universal truth is that everybody likes chocolate. 𝐂𝐡𝐨𝐜𝐨𝐥𝐚𝐭𝐞 Market🌍 The global chocolate confectionery market was valued at $127B in 2023 and is projected to grow to $169B by 2029 (Statista). 𝐅𝐨𝐜𝐮𝐬 🎯 🍫Lindt & Sprüngli is all about high-end chocolate with a highly international focus. Nearly 100% of their revenue comes from premium chocolate, and they’re strengthening their focus on direct-to-consumer sales through 523 branded stores worldwide. 🍬Hershey’s, on the other hand, is very US-centered and has diversified significantly into gum, mints, protein bars, and salty snacks with acquisitions like Dot’s Pretzels and SkinnyPop Popcorn 𝐌𝐚𝐫𝐤𝐞𝐭𝐬 📊 🍫Lindt & Sprüngli: Europe: 46.3% (Germany 14.7%, France 8%, UK 6.3%) North America: 40.6% (U.S. 34.8%, Canada 5.3%) Rest of the World: 13.1% 🍬Hershey’s: North America: 91.5% Rest of the World: 8.5% In the U.S. chocolate market, Hershey’s leads with 45.4% market share, followed by Mars (26.8%), Lindt (9.4%), and Ferrero (7.7%). 𝐃𝐢𝐬𝐭𝐫𝐢𝐛𝐮𝐭𝐢𝐨𝐧🚚 🍫Lindt & Sprüngli: A strong direct-to-consumer strategy with 523 owned stores in 24 countries and a growing presence in travel retail (airports), which saw 20% growth in 2023. 🍬Hershey’s: Focuses on traditional distribution, with 28% of its 2023 sales coming from McLane Company, Inc., which distributes to convenience stores, Walmart , and other mass retailers. 𝐅𝐢𝐧𝐚𝐧𝐜𝐢𝐚𝐥𝐬 💰 🍫Lindt (2023): $6.2B in revenue, 19% EBITDA margin. 🍬Hershey’s (2023): $11.2B in revenue, 26% EBITDA margin. Hershey’s benefits from scale, diversification, and dominance in its home market. 𝐺𝑟𝑜𝑠𝑠 𝑀𝑎𝑟𝑔𝑖𝑛𝑠: 🍫Lindt: 67% (premium positioning pays off!) 🍬Hershey’s: 44% (diversification and lower-priced products dilute margins). 𝑅𝑒𝑣𝑒𝑛𝑢𝑒 𝑝𝑒𝑟 𝐸𝑚𝑝𝑙𝑜𝑦𝑒𝑒: 🍫Lindt: $308,000 🍬Hershey’s: $546,208 Hershey’s streamlined focus on one market and its scale advantage drive higher employee productivity. 𝐌𝐲 𝐭𝐚𝐤𝐞 🧁 🍬Hershey’s remains the larger player in both size and profitability, benefiting from its concentration in the U.S. market and streamlined cost structure. Its strategy to diversify beyond chocolate into snacks, and mints provides additional growth avenues. 🍫Lindt, on the other hand, has chosen to remain focused on chocolate and is pursuing growth through internationalization and direct-to-consumer channels, including their branded luxury stores. This strategy is paying off in top-line growth, but it hasn’t yet translated to bottom-line profitability on par with Hershey’s. By the way, I’m a huge fan of Lindt & Sprüngli España y Portugal! I especially love the Gianduiotti—I can’t stop once I start eating them.
Very interesting! Joshua Novick just out of curiosity , you never mentioned Mondelez (especially for the Us Market - is there a specific reason why?). Tkk
Interesting
It will be interesting to see how they both navigate this year's cocoa price boom. How much of this input cost will they need to absorb in margin reduction vs pass on to consumers? How well are they hedged? And how well can they predict these impacts and set expectations accurately for the financial markets?
Absolutely! Hershey’s is more profitable and better positioned due to its U.S.-focus, scale, and product diversification. Lindt, on the other hand, has long-term growth potential through its premium strategy and global expansion. If it continues to optimize direct-to-consumer sales and strengthen its brand in new markets, Lindt could reach profitability similar to Hershey’s with a different strategy.
Very interesting, Joshua. In addition to these stats, Mondelez International announced the acquisition of Hershey, aiming to enhance its portfolio in the confectionery market. This deal, valued at approximately $23 billion, is expected to leverage Hershey’s iconic brands while reinforcing Mondelez's growth strategy in emerging markets.
Claudio Rota
1w
very interesting. If we just look at the chocolate segment, Lindt wins perhaps?
Thanks for sharing this, Joshua. Lindt’s premium image has definitely taken a hit with the revelations about heavy metals and misleading claims about their ingredients. Do you think this could hurt their long-term trust with consumers as awareness grows?
Joshua Novick great summary and take. These days I read Mondelez is planning Hershey’s acquisition. I can only imagine the footprint of such merge….
Both brands are global benchmarks, each excelling in their respective market segments. I’m particularly struck by The Hershey Company debt and its ability to generate FCF—it’s incredible! Thank you, Joshua for sharing this 🙏
Interesting contrast in strategies Joshua Novick: The Hershey Company’s seems to be winning on profitability with its focus on the U.S. and diversification, while Lindt & Sprüngli is playing the long game by expanding globally and investing in premium experiences. It’ll be fascinating to see if Lindt’s push eventually closes the profitability gap. Of your interest: César Lara, Paloma Gutiérrez Caraveo, Gerardo Kneeteman Fraccarolli, Timothy S. McCoy, Sherry Ulsh, Gino Caponi, Anthony J. Southard, Yadira Sierra, Joseph Tlachi, Vinny Rinaldi, Ana Sagaon, SHRM-SCP, Charlie Chappell, Haydee Vera, David Hulays, Camila George, Luigi Mirri, Eric Brewer, Seth Nadel, Rodrigo Antonio Chávez Romero, Katya Hernández Hernández, The Hershey company, Hershey India, Hershey Mexico, Hershey Food Service Mx