Toms Group targets low single-digit growth as CEO navigates cocoa volatility and GLP-1 shifts

Toms Group has reaffirmed its forecast for low single-digit sales growth this year, aiming to replicate the DKr1.80bn ($283m) top-line revenue achieved in 2023. Chief Executive Annette Zeipel stated that the Danish confectionery manufacturer is prioritising operational efficiency and international expansion over immediate price adjustments, despite navigating a complex landscape of geopolitical risks and input cost inflation. The company reported a 7% increase in sales last year, contributing to a net profit of DKr41m, and remains focused on consolidating its position within the European Union.

To improve cost structures, Toms Group is consolidating production into its newer, more efficient factory in Poland, which began operations in late 2020. This move allows the company to phase out its older, high-maintenance headquarters in Ballerup, Denmark, which has been in use since 1962. Zeipel described the shift as a major structural improvement for profitability, eliminating the costs associated with maintaining two parallel chocolate factories and leveraging significantly lower operational expenses in Poland.

The company is directing its growth efforts toward key EU markets, specifically Germany and Poland. In Poland, Toms Group recorded a 40% growth rate last year, despite having a limited presence in only a few retailers, indicating substantial room for expansion. In Germany, the group is leveraging its portfolio of brands such as Hachez and Feodora, alongside its premium Anthon Berg line, through strengthened distribution partnerships. Zeipel noted that these markets offer significant overlap with the company’s broader product range, including marzipan and liquorice.

Amidst broader industry concerns regarding GLP-1 weight-loss drugs, Zeipel argued that the core consumer desire for indulgence remains intact. While acknowledging that demand may eventually shift toward functional benefits such as higher protein and lower sugar content, she indicated that near-term innovation is focused on flavour extensions, texture, and informal sharing formats rather than a complete departure from traditional confectionery. She observed that while awareness of GLP-1 drugs is high in Denmark due to the presence of Novo Nordisk, actual drug penetration lags behind the United States.

Toms Group is currently absorbing rising energy and packaging costs rather than passing them on to consumers, despite high volatility in cocoa prices. Zeipel highlighted that structural issues in the cocoa supply chain, including ageing trees and climate impacts, will likely sustain price fluctuations for the foreseeable future. However, she emphasised that the immediate inflationary pressure is driven more by energy costs and supply chain disruptions than by raw cocoa material prices, allowing the company to maintain current pricing strategies while monitoring the evolving macroeconomic environment.