Significant increases in cocoa prices hit Baker & Baker’s financial performance during 2025.
Baker & Baker UK, which operates four manufacturing sites producing American-style sweet bakery products, reported a 2% increase in revenue from £251.3m in 2024 to £256.4m in 2025.
However, this was broadly as a result of increased prices, as volumes and gross profit both dropped. Volumes fell by 8.5%, a difference of 5.7 metric tonnes, while gross profit dipped by 4.8% from £31m to £29.5m over the year, according to its latest accounts filed on Companies House. The firm’s operating loss also deepened from £2.1m to £2.5m.
Baker & Baker UK described the external environment as ‘challenging’, noting ‘sustained inflationary pressure’ across key input costs as well as a cautious consumer backdrop and labour cost increases.
Cocoa was chief among these pressures driving up the price of chocolate-based raw materials.
CEO Matthew Acheson said the firm was anticipating “turbulent market conditions throughout 2025” and was pleased to deliver a “solid and highly resilient financial performance” despite the challenges.
“Cocoa was a key driver of inflation, and as this is a staple bakery ingredient across our key categories, we needed to be agile across our operations to maintain margins,” he added.
In response, management implemented pricing actions with customers where appropriate, alongside ‘continued focus on operational efficiency, cost control and product quality’. Pricing actions introduced during 2024 and 2025 supported revenue performance during the year, although cost inflation remained a key feature of the trading environment, it added.
These challenges were also reflected in the wider group’s performance. Considering its European operations and UK ones, Baker & Baker reported revenue of €624.2m (£535.3m), alongside a slight drop in gross profit to €83.4m (£71.5m) – a decrease of 7.5% year-on-year, although a similar performance to 2023, it noted. EBIDTA remained broadly stable at €31.6m (£27.1m).
Things improved in the final quarter of 2025 and 2026’s performance is expected to be brighter as inflationary pressures are ease.
“We were able to stabilise product volumes in the final quarter of 2025, and combined with a clear strategic plan which bearing fruit, we are seeing encouraging volume performance so far this year,” Acheson added.
The CEO also highlighted that Baker & Baker continued to invest in its manufacturing sites, noting that it is planning to “ramp up this investment” in 2026.
Approximately €10 million was invested during the year in operational projects across its 12 manufacturing sites. This included a range of capital initiatives, the most prominent of which was the first stage of an automation project relating to donut production at its German manufacturing site in Delmenhorst, which will total €3m once finished later in 2026.
The group also launched a major IT transformation programme to implement SAP S/4HANA Private Cloud across its manufacturing sites and offices, with in-year expenditure of €1.8m.
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