Chocoladefabriken Lindt & Spruengli AG N

Sugar prices have rallied sharply as expectations of abundant supply gave way to weather-related shortage concerns, with the benchmark sugar tracking price up 13% over the last six weeks and 38% higher year-to-date, and New York's most-active raw-sugar futures reaching their highest level since December 2024 earlier this week. Excessive rainfall has slowed harvesting and cane crushing in Brazil, India's weakest monsoon since 2015 has cut projected output to approximately 30M tons, and European sugar-beet yields are forecast 11% below their five-year average. The International Sugar Organization forecasts a 200K-ton global deficit for the 2026-2027 sugar crop, compared with a 1.1M-ton surplus in 2025-26, and identifies El Niño as the strongest threat to its production forecasts in the coming months. Analysts have flagged Hershey, Mondelez International, Nestlé, Lindt & Sprüngli, Mars and Ferrero as among the food sector names most exposed to sugar prices, while Rogers Sugar, Associated British Foods and Coca-Cola FEMSA have mentioned sugar prices on recent earnings calls.

Cocoa prices are rising again as climate conditions threaten the West African harvest, renewing pressure on chocolate makers still recovering from the historic 2024 spike. New York cocoa futures closed at $5,670 per metric ton Friday, reversing some of the previous session's decline, with traders focused on supply risks just weeks ahead of Halloween. Goldman Sachs warned last week that a potentially powerful El Niño could leave the cocoa market vulnerable to another supply squeeze, and analyst Lina Thomas said this year's growing season already resembles the run-up to the 2023-24 crisis, with excessive early rainfall followed by unusually dry weather. Cocoa first climbed above $11,000 per metric ton in April 2024 and reached a record $12,565 that December, after hedge funds and other traders bought a record $8.7 billion worth of cocoa futures contracts on the London and New York markets by early 2024. Thomas said the market may be more vulnerable to a poor harvest than in 2023-24, though she does not expect the same futures-market liquidity squeeze, and Kleos Advisory founder Tedd George said he does not expect another move to $12,000. Recent results show the strain: Lindt & Sprungli cut its 2026 sales-growth forecast, Barry Callebaut reported a 4.4% decline in the global chocolate confectionery market in its fiscal third quarter, and Nestlé blamed coffee and cocoa prices for reducing its gross profit margin by 20 basis points to 46.4%.

Lindt & Sprüngli cut its full-year organic sales growth forecast to 0%-2% from 4%-6%, citing weaker demand in Germany, Switzerland and Austria after price increases and an unusually hot summer. The Swiss chocolate maker said higher consumer price sensitivity led to lower-than-expected orders, particularly in seasonal products, in those three markets. Lindt maintained its 2026 target for a 20-40 basis point improvement in its EBIT margin from the previous year. Group CEO Adalbert Lechner said necessary price increases due to historically high cocoa prices in recent years, and subdued consumer sentiment, led to weaker-than-expected order volumes in certain European markets, particularly in seasonal businesses. Performance was stronger in North America and Asia, providing some offset to weakness in its core European markets, and the company expects positive volume growth in 2027 supported by changes to its pricing strategy, higher brand investment, new products and cost savings. Lindt reiterated its medium- to long-term target of 6%-8% organic sales growth and annual EBIT margin expansion of 20-40 basis points from 2028 onwards, and reported sales of 5.92 billion Swiss francs in 2025.