COMMENT - Lindt in crisis: The chocolate conglomerate needs a generation change

Lindt in Crisis: The Chocolate Conglomerate Needs a Generational Change Everything at Lindt & Sprüngli depends on the 80-year-old company patron Ernst Tanner. He made the company large. But now he should prepare for his succession. He who is too late is punished by life. For a long time, Ernst Tanner believed that for three decades, the almighty figure at Lindt & Sprüngli, the success story of the Kilchberger chocolate conglomerate would continue as long as he was at the top. But now the 80-year-old must realize: Lindt has slipped into a crisis. Weak sales, declining share price The last expression of malaise is that the chairman of the supervisory board Tanner summarily dismissed the operational head of the company, Adalbert Lechner, to the street on Monday. But the underlying problems remain. Lindt & Sprüngli has entered a sales crisis because the company has raised the prices for gold rabbits and Lindor balls too much in recent years. Especially in Germany, Austria, and Switzerland, customers are now holding back their purchases. Management underestimated the seriousness of the situation for a long time and spoke sweetly. But then it had to correct the sales expectations twice: first – slightly – in March, a second time – strongly – at the end of September. With that, the Lindt management has also lost a lot of trust among investors. The share price, which seemed to only go up under Ernst Tanner for a long time, has plummeted by 40 percent this year. Lack of succession planning The hasty replacement of the CEO Lechner demonstrates a lack of resolve. At Lindt & Sprüngli, one is actually proud that leaders remain in the company for decades and recommend themselves for higher positions. But now chairman of the supervisory board Tanner has not managed to present a replacement for Lechner from within his own ranks immediately. Instead, Dieter Weisskopf must take the helm as interim CEO. The 71-year-old led the company from 2016 to 2022 and has since been on the supervisory board. He knows the business, but he is also a representative of the old guard at Lindt & Sprüngli. Prudent succession planning looks different. Ernst Tanner's achievements for Lindt & Sprüngli are undisputed. He built the company into the world market leader for premium chocolate since the 1990s. Tanner managed to sell an industrially produced mass product like Lindor balls as "affordable luxury" to consumers – also thanks to the clever marketing strategy of the maître chocolatier with the white hat. And the consumers flocked to it: Under Tanner, the company's revenue more than quintupled. Deficiencies in governance But over time, Lindt & Sprüngli also became a company built around Ernst Tanner. The patron still sits at all the levers. He is the executive chairman of the supervisory board with involvement in operations. He leads the most important shareholder group of Lindt & Sprüngli, two welfare organizations for the employees. He chairs the foundation behind the chocolate museum in Kilchberg. Whoever unites so much power is jointly responsible for the recent problems. Tanner has made himself practically unassailable. Due to a voting rights restriction, critical shareholders can hardly oust the chairman of the supervisory board. Tanner is surrounded by many acquaintances in the supervisory board; there are too few independent members in the body. Shareholders have complained about this governance structure as deficient for years. In the end, there is no other way: Tanner must come to the realization that a generational change is now necessary. First, there needs to be a convincing solution for a permanent CEO. Then Tanner should prepare his own succession in the chairmanship of the supervisory board. It is perhaps his last chance to pass on his life's work. Because he who is too late is punished by life.