Milling & Baking News Corporate Profiles - 2019 - 72

COMPANY OVERVIEW

The Ferrero Group
Acquisitions continue to propel U.S. footprint
ased in Luxemburg, The Ferrero Group
continued to increase its footprint and
product offerings in North America this
year, acquiring Kellogg Co.'s selected cookie, fruit
snack, pie crust and ice cream cone business in
July. The $1.3 billion transaction brought a portfolio that includes Keebler, Famous Amos, Mother's
and Murray cookies as well as Little Brownie Bakers, supplier of cookies to the Girl Scouts of the
U.S.A., into Ferrero's fold. Collectively, the businesses generated approximately $900 million
in sales last year, according to Kellogg. The deal
marked Ferrero's first foray into the growing U.S.
snack space.
"We're acquiring a portfolio of well-established brands that consumers love, with very
strong market positions across their respective
categories, allowing us to significantly diversify our portfolio and capitalize on exciting new
growth opportunities in the world's largest cookies market," said Lapo Civiletti, chief executive
officer of Ferrero.
The Ferrero Group is the world's third largest
chocolate confectionery company, with global sales
of more than $12 million and brands that include
Tic-Tac, Nutella and Ferrero Rocher.
The Kellogg deal was the latest in a series of acquisitions that began in 2017 with

the purchase of Ferrara Candy Co., maker of
Brach's Lemonheads and Red Hots, for $1.3
billion. Last year, Ferrero purchased Nestle's
U.S. chocolate business for $2.8 billion. The
deal added more than 20 candy brands to
the company's portfolio, including Butterfinger, Baby Ruth, Crunch, Laffy Taffy, SweeTarts
and Nerds.
The acquired Kellogg portfolio will be managed by Ferrara Candy Co., which also manages
the former Nestle U.S. confectionery business.
"About 90% of consumers that are eating
candy are consumers that are eating cookies,"
said Sarah Kittel, head of corporate communications at Ferrara Candy Co. "For a category in
snacks that's growing about 4%, we're able to
bring a lot of opportunity and growth potential
to our customers and cross-collaboration within
our business."
Ferrero has so far taken a paced approach
to making changes to the brands it acquires.

The company launched a revamped Butterfinger bar in February, making it the first of the
former Nestle brands to receive a makeover. The
new bar features higher quality ingredients like
jumbo peanuts and a higher cocoa to milk ratio
in the chocolate coating.
"We invested in quality ingredients and
quality packaging, and we also invested in advertising," said Kristen Mandel, senior director
of marketing at Ferrara Candy Co. "We tripled
the marketing spend that previously was behind Butterfinger, and our results honestly have
blown us and the category away."
The company plans to unveil an upgraded
version of the 99-year-old Baby Ruth candy bar
in 2020.
In addition to bulking up its offerings
through high-profile M.&A. deals, Ferrero is tapping into its legacy brands to boost sales and
widen its U.S. footprint. It entered the boxed
chocolate category in September with the launch
of Ferrero Golden Gallery Signature. Tic Tac XFreeze, a sugar-free mint that is 50% larger
than the original, also launched in September.
Ferrero also is expanding the internationally
popular Kinder brand in the United States with
the launch of Kinder Bueno, slated for a stateside debut in November. CP

Chief executive officer
Lapo Civiletti

Ferrero's buildup of brands
BRANDS RECENTLY ACQUIRED BY THE FERRERO GROUP INCLUDE:
Keebler, Famous Amos,
Mother's and Murray
cookies from the
Kellogg Co.

72 \ November 2019

Butterfinger, Baby Ruth, Crunch,
Laffy Taffy, SweeTarts and Nerds
from Nestle.

Brach's, Lemonheads and Red Hots
in the acquisition of
Ferrara Candy Co.

Milling & Baking News * Food Business News * Baking & Snack * Meat+Poultry * Pet Food Processing

Corporate Profiles

Milling & Baking News Corporate Profiles - 2019

Table of Contents for the Digital Edition of Milling & Baking News Corporate Profiles - 2019