Ferrero's secret strategy for cutting and shaping their range of frozen baked goods and candy items
Nutella and the Italian Confectionery Giant: A Success Story
By Angélique Vallez, Chief InvestigatorPublished on
In a world where prestige and royalty often intertwine, an unusual bond links Ferrero, the esteemed Italian confectionery company, and two influential figures - Michel-Edouard Leclerc and Charles of England. Yet, this connection stems not from shared business ventures or historical relations but from personalized Nutella jars bearing their first names.
The grandson of the founder of the hazelnut empire, Giovanni Ferrero, has earned his place as a standard-bearer of Made in Italy, setting his sights on international expansion while maintaining the company's intimate connection to Piedmont hazelnuts. However, the headquarters for Ferrero's accounts and Giovanni himself are located overseas in Luxembourg, Belgium, and Monaco, respectively.
Despite its sprawling geographical footprint, Ferrero remains a symbol of Italian excellence with its products enjoyed in 170 countries across the globe. With an 8.9% growth and a turnover of 18.4 billion euros for its 2023-2024 financial year, Ferrero leads Europe's confectionery market. Top-selling brands like Nutella, Kinder, Raffaello, and Tic Tac continue to drive the group's success, with the potential for a significant milestone in 2023, as the group could reach 20 billion euros in sales.
In France, Ferrero is recognized as the leading brand in the "chocolate" category, holding a quarter of the market. In a market landscape, the company outperformed other contenders by contributing substantially to the sales growth of French supermarkets in 2024, surpassing Mars Group's advancement.
Ferrero's rise to the top was not a swift ascent; it took intentional planning and innovation. Michele Ferrero, who helmed the group until his passing in 2015, laid the foundation for its international acclaim. Still, the company prides itself on maintaining an air of discretion - its leaders prefer the spotlight to shine on the products rather than themselves.
Innovation is the driving force behind Ferrero's continued growth, as the group consistently seeks to meet the evolving tastes of its primary consumer, the typical Italian consumer, whom Michele Ferrero valued highly. This approach has resulted in yearly product launches that consistently rank among the top detected by NielsenIQ. In 2023 alone, two Ferrero treats – Kinder Tronky Waffles and Nutella ice cream – made their mark on the top 10.
Nutella ice cream achieved the highest accolade, generating more than 15 million euros in sales within a year. The company's R&D teams, based in Alba and Chicago, work tirelessly to innovate and adapt to changing consumer preferences and market conditions.
As production volume grew, so too did Ferrero's focus on environmental sustainability. In an effort to address concerns about deforestation linked to the use of palm oil, Ferrero has taken steps to ensure the sourcing of its palm oil adheres to sustainable practices, a point commended by the WWF.
To maintain its prominent position, Ferrero employs effective marketing strategies. A robust salesforce, consisting of nearly 600 members in France, ensures visibility for Ferrero's products through targeted in-store promotions. The strategy has proven successful, with discounts accounting for 24% of sales in the chocolate aisle, 33% for spreads, and even reaching 53% for cereal chocolate bars.
Although it weathered its first health crisis nearly unscathed in 2022 due to swift action and transparency, Ferrero continues to expand its portfolio through strategic acquisitions. Latest acquisitions include the Belgian Delacre in 2016, Michel et Augustin in 2023, and Eat Natural's fruity snack bars in an attempt to venture into the healthier products sector.
As Ferrero looks to the future, it aims to expand its presence beyond supermarkets into the cafés, hotels, and restaurants segment. The ultimate goal is to recreate the memorable ambassador receptions with Ferrero Rocher pyramids in new settings.
- The growth of Ferrero, a pioneer in the global food-and-drink industry, has caught the attention of investors, as the company is expected to reach 20 billion euros in sales in 2023.
- With an emphasis on entrepreneurship and innovation, Ferrero's research and development teams, based in Alba and Chicago, continue to adapt their product lines to meet changing consumer preferences and market conditions.
- In the realm of finance, Ferrero's strategic investments in real-estate, such as the acquisition of Belgian Delacre in 2016 and Michel et Augustin in 2023, are aimed at expanding its portfolio to cater to a wider audience, including those seeking healthier alternatives.
- On a broader scale, the company's commitment to environmental sustainability, shown through practices like ensuring sustainable sourcing of palm oil, demonstrates its dedication to responsible business practices and growth in the Fintech industry.
- In an effort to maintain its dominant position in the confectionery market, Ferrero employs a diverse marketing strategy, including targeted in-store promotions and expanding its presence into the cafés, hotels, and restaurants segment.
- As a global leader in the food-and-drink industry, Ferrero's products, such as Nutella and Kinder, are enjoyed in over 170 countries, marking a significant impact on the lifestyle and cuisines of nations worldwide.
