However, the sweet triumph comes with a bitter twist—the company achieved this feat by passing the costs onto its devoted customers, reigniting the heated debate over corporate ‘greedflation’ tactics.”

Amidst sky-high energy and grain prices fueled by Russia’s Ukraine invasion and lingering COVID-19 disruptions, turning a profit in the chocolate industry seemed like an impossible feat. A cocoa crisis in Western Africa further darkened the outlook.

But Lindt & Sprüngli managed to post a 10.3% rise in sales in 2023, according to its latest results.

Despite major pressures on the cost of key input cocoa, the group said it was able to offset some costs through improved efficiency at its factories. 

The rest of the costs fell on the group’s sweet-toothed customers.

“Through close collaboration with our trade partners, we subsequently passed on the remaining costs through price increases,” Lindt & Sprüngli said. 

The price of cocoa increased to 44-year highs toward the end of 2023 as a climate change-induced rot lay waste to farmers’ crops across the Ivory Coast and Ghana.

The world’s biggest chocolate manufacturers, including Nutella-maker Ferrero and Cadbury-owner Mondelez, have all felt the pinch from these higher raw material costs, as have their customers.

Analysis by consumer group Which? Found the price of some chocolates has risen as high as 67% in U.K. supermarkets as a result of these cost pressures.

While Lindt only revealed sales data in Tuesday’s release, the group said it expected to improve its profit margin compared with last year thanks to its price rises. The chocolate maker also expects sales growth as high as 8% and further profit increases in 2024. 

Lindor pralines, the group’s famous spherical chocolates, drove sales for Lindt with double-digit growth in all of its regions. 

Customers’ continued appetite for Lindt’s candies despite hard-to-swallow markups could be a sign of shoppers turning to small luxuries during a cost-of-living crisis that has made bigger outlays difficult to justify.

The phenomenon, known in economic circles as the “lipstick index,” would make Lindor’s pralines, which retail at more than $7 a box, prime candidates for a mini splurge among cash-strapped consumers.

While those customers might bristle at backing up Lindt’s record sales, investors cheered the group’s ability to defy weakening consumer sentiment, which had been battered by months of high inflation and rising interest rates.

Shares in Lindt rose more than 5% after European markets opened Tuesday.

A representative for Lindt & Sprüngli told Fortune: “Lindt & Sprüngli has made a concerted effort to compensate for these increased costs by increasing efficiency as much as possible and through a forward-looking purchasing strategy.

“However, since the rising trend in cocoa has persisted over a more extended period, we have to increase prices again 2024.”

‘Greedflation’ debate continues

COVID-19 restrictions hit global supply chains in 2020 and led to several logjams that took years to unwind.

Soon after, Russia’s invasion of Ukraine led to historic sanctions and cut off supplies of oil and gas to the West, affecting businesses’ energy and transportation costs. 

Meanwhile, Ukrainian grain, a vital input for several food manufacturers, put an added strain on supermarket shelves. These all helped inflation across Europe, the U.K., and the U.S. hit their highest levels in decades.

Suppliers and retailers have used these pressures as justification for price rises in recent years, as they balance the conflicting priorities of their customers and their shareholders.

However, more scrutiny is being placed on how much of those increases were made in a bid to avoid losses, and how much was driven by profiteering aimed at improving a company’s bottom line and share price. 

Late last year, the IPPR and Common Wealth launched the world’s largest study of “greedflation” in a bid to understand how much the price rises experienced in 2022 were a result of profiteering instead of merely higher input costs.

The results after monitoring 1,300 of the globe’s biggest companies were unsettling, if not surprising. 

The December research suggested a significant share of inflation was a result of price rises in advance of higher costs, with profits rising 30% in 2022, compared with around 11% inflation.

The think tanks found that several companies, including Shell, ExxonMobil, and Kraft Heinz, used the opportunity to hike prices while blaming cost pressures on everything from COVID-19 to Russia’s invasion of Ukraine.

The debate has been complicated by arguments between suppliers and retailers over who should bear the burden of rising costs. 

PepsiCo and French supermarket giant Carrefour are in a dispute that has seen the supplier’s Doritos and 7up disappear from the retailer’s shelves, sparking a debate over who dumped who first. 

But for Lindt and several other suppliers, it appears the tradeoff between their customers’ wallets and the happiness of their investors has yet to come to a head.