McKinsey: How much of this success with Dubai-style chocolate was due to “smart marketing” versus having the superior product? Daniel Studer: Product quality is always the top priority for Lindt. However, this success was also largely driven by our brand’s reputation and our quick response. From decision to execution, it took just two to three months to get the product in stores. Leveraging social media and creating exclusivity also played a key role in amplifying the buzz. McKinsey: How have the macroeconomic challenges of the past months affected your marketing priorities? Ricardo Azenha: Chocolate is a resilient category. Even during tough times, consumers seek small indulgences. Category value is actually up, driven by high cocoa prices, while volumes are slightly down. In this context, our focus remains on quality and maintaining consumer trust. Instead, we see this as an opportunity to strengthen our brand equity. We also stay consistent in our media planning, prioritizing long-term investments over short-term performance marketing. McKinsey: How are you handling overall marketing spending in these times? Daniel Studer: With rising raw material costs, we had two choices: protect margins by increasing efficiencies and passing on remaining cost increases or cut investments to stay competitive. We chose to protect margins and continue investing in our brand. As a premium brand, it’s critical to maintain our equity and desirability. McKinsey: What are your guiding principles for where to spend your budgets? Ricardo Azenha: We prioritize three things. First, we invest more into geographies with high growth potential. Second, our key franchise brands, Lindor and Excellence, receive the most investments, but we also strongly support new innovations where the business case justifies it. For these we very rigorously track if the investments achieve the required payoffs. Third, in paid media we focus on high-reach, high- quality channels, allocating the majority of our budget there. We also dedicate spend to ‘test-and-learn’ initiatives, which, if successful, become part of our long-term strategy. McKinsey: How do you coordinate this learning agenda? Ricardo Azenha: We have a global Center of Expertise, a team of media experts that pilots and coordinates test-and-learn initiatives across markets. These insights are then rolled out across the group. McKinsey: How do you approach marketing ROI measurement? Ricardo Azenha: We focus on long-term ROI, particularly brand equity and mental availability. In essence, how distinctive and meaningful our brand is compared to competitors. After each campaign, we review its impact on the brand and benchmark its effectiveness over time. While we also use tools like marketing mix modeling for fine-tuning budget allocations, our main goal and KPI is to build long-term equity. McKinsey: What role do consumer insights play in driving the effectiveness of your marketing activities? Ricardo Azenha: Strong consumer insights are the foundation of good execution. For instance, we learned that younger US consumers often find dark chocolate too bitter, which can deter them from buying it later in life. Based on this, we launched a campaign encouraging consumers to try dark chocolate and overcome negative associations they had with it, which has been effective in recruiting new buyers. We also research channel-specific insights, especially relating to the level of attention certain channels get. In our media planning we are carefully picking channels with high reach and the right attention levels. 36 Past forward: The modern rethinking of marketing’s core