The end-of-year celebration now accounts for 18% of the company’s revenue, while the more traditional chocolate season, Easter, represents 21%.
“Christmas is almost like Easter for Cacau Show,” said Alexandre Costa, founder and CEO of the largest chocolate company in Brazil. He made this statement during an event on Tuesday (November 12) to present the company’s new Christmas product line and share insights into its operations. Costa revealed that revenue from the Christmas season is expected to grow 41.9% compared to 2023, driven by a strong focus on panettone production.
Christmas already contributes 18% of the company’s revenue, while Easter accounts for 21%.
Panettone Production to Reach Record Levels
For the Christmas season, Cacau Show plans to produce approximately 12.5 million panettones, with 10 million coming from its Itapevi factory in São Paulo and 2.5 million from Linhares, Espírito Santo. Last Christmas, 10 million units were produced. Panettones will account for 50% of expected holiday sales, followed by chocolates, small gifts, and “giftable” products.
Costa announced that starting in 2025, 100% of the company’s panettone production will be centralized in its second factory, recently reopened after a major fire in November 2023. Half of the burned facility was rebuilt at a cost of R$150 million. “It’s the most technologically advanced chocolate factory in South America. Very few people are involved—everything is automated,” said Costa.
Rising Costs of Raw Materials
During the event, Lilian Rodrigues, Cacau Show’s marketing director, noted that all the raw materials for chocolate production, including cocoa, milk, liquor, and butter, have become more expensive over the past year.
Despite these cost increases, Rodrigues explained that the company has not passed the full price hike on to consumers, leading to a reduced profit margin in 2024. This aligns with Costa’s earlier predictions, made during an interview with Valor in April.
“Cocoa is the most critical raw material, and we haven’t changed any product formulations. By not increasing prices, we’ve had to operate with smaller margins,” she stated.
Cocoa Prices and Self-Sufficiency Goals
Last week, cocoa prices closed at $8,504 per ton on the New York Stock Exchange, marking a 2% drop. Despite this, cocoa remains at historically high levels, nearly doubling from $4,000 per ton just a year ago.
In response to rising costs, Cacau Show aims to expand its cocoa farming operations. “We’re working toward becoming increasingly self-sufficient by acquiring more farms, as we are still highly dependent on market prices,” Costa explained without providing specifics.
Currently, the company consumes 15,000 tons of cocoa annually, with 3% of that total grown on its own farms in Linhares (ES).
Expansion and Innovations
Cacau Show is Brazil’s largest franchisor, and by November, it will open its 4,700th store, with 532 new stores planned for 2024. According to Costa, the company expects to achieve a 30% increase in revenue this year.
For Christmas, Cacau Show has prepared 11 new product launches, with pistachio-flavored items leading the pack due to their growing popularity. Other notable additions include Sicilian lemon-flavored products and a partnership with Warner Bros. for a “Harry Potter Panettone.”
