Lindt seeks sweet spot with boutique

Image source: Lindt Chocolate - South Africa on Facebook

With the local chocolate market valued at more than R5bn, middle-and upper-income consumers are increasingly developing a taste for premium chocolates and confectionery.

Although Lindt has retail partners such as Woolworths, Clicks and Pick n Pay, its retail stores are becoming important as a new business opportunity.

Lindt & Sprüngli SA CEO Nicolas Thoenen said the local chocolate market was consistently growing by more than 10% year on year.

"The premium chocolate segment, in which we have a driving force, has seen strong improvements over the last years and in which we see still lots of growth potential," he said.

The Switzerland-listed company has made similar moves in other developing economies, including Brazil. The Lindt retail store, which opened in Sandton City, offers boxed chocolate, slabs and a Lindor pick and mix assortment.

Derek Engelbrecht, retail and consumer products sector leader at EY financial consultants, said chocolate was an impulse purchase.

"Impulsiveness is not linked to planning and saving, hence confectionery and sweets generally benefit from higher volumes, lower price, but appealing to the sweet tooth from a value perspective.

"Arguably, Lindt suffers from a perceived price premium perspective. This probably explains expanding their footprint through widespread availability via established retailers," he said.