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Ferrero Group
Tagline
Net Worth
$23,000,000,000
Started in (City)
Alba
Started in (Country)
Italy
Incorporation Date
01st December, 1946
Bankruptcy Date
-
Founders
- Pietro Ferrero
About
The Ferrero Group, or Ferrero SpA, is an Italian owned chocolate and confectionary manufacturing company worth billions, with several subsidiaries all over the world. It has several manufacturing and distribution facilities dotted around the globe. From its humble beginnings in the Italian hills in a small shop, it is now among the top tier elites when it come to the manufacturing of sweets and other confectionaries. It is the product of an innovative entrepreneurial spirit in a time of war and shortages.The company saw a period of tremendous growth and success under Pietro's son Michele Ferrero, who in turn handed over the daily operations to his sons, Pietro Jr. and Giovanni Ferrero (the founder's grandsons). Pietro Jr., who oversaw global business, died on 18 April 2011 in a cycling accident in South Africa at the age of 47. The Ferrero Group worldwide – now headed by Executive Chairman Giovanni Ferrero – includes 38 trading companies, 18 factories, and approximately 40,000 employees, and produces around 365,000 tonnes of Nutella each year.
Beginning
The origin of Ferrero is in Italy, during a time when the world was recovering from the destruction of World War I. After serving in the military during the war, Pietro Ferrero opened a pastry shop in Dogliani, in northwestern Italy in 1923. Soon after that he married 21-year old Piera Cillario, and she gave birth to a son, Michele, in 1925. This marked the start of the soon to be family-owned global brand. Their family did not remain in Dogliani for long. They moved from one city to another. As Pietro gained more skills in sales at the shops he worked, he gained enough confidence in himself to finally move to East Africa when the Italian Kingdom took over Africa. There, he tried his luck at selling biscuits to Mussolini’s Italian troops. However, that venture was a dud. His return back home after this failed venture was followed by World War II, right after he had settled in Alba with his family. It was here in the subdued hills of Alba where the precursor for Nutella, a star product of Ferrero, would be invented and the climb to the top would begin. With his younger brother Giovanni Ferrero’s encouraging cue, Pietro began experimenting to come up with affordable alternatives for chocolate as it became very rare in Italy during the war. The blend that he created with molasses, hazelnut oil from the abundant hazelnut where he lived, coconut butter and a small amount of cocoa, that he called “Giandujot”, was satisfactory enough for him and so he wrapped it in wax paper, and began selling it around Alba.
Road to Success
We have to return to the ‘40s to discover the roots of this success. These were the years when Piera and Pietro, Michele’s parents, transformed a pastry shop into a factory. The Ferrero’ Family was the first Italian manufacturer after World War II to open production sites and offices abroad in the confectionary sector, turning the Company into a truly international Group. These first and decisive steps forward were thanks to the products “invented” by Pietro Ferrero and his son Michele, who was then very young. Another key to success was the effective sales network organized by Giovanni, Pietro’s brother, who died in 1949. Ferrero's acquisition binge was punctuated in 2018 by its $2.8 billion purchase of Nestlé's U.S. chocolate business, a deal that added more than 20 American candy brands including Butterfinger, Baby Ruth, 100 Grand, SweeTarts and Nerds to the fold. A year earlier, it purchased Ferrara Candy, the maker of Brach's, Lemonheads and Red Hots, for a reported $1.3 billion, and Fannie May Confections for $115 million. The deals helped Ferrero dramatically increase its size. It leapfrogged Mondelez to become the U.S.'s third largest candy company, according to Euromonitor International, with sales in the year ended August 31, 2018 of roughly $12 billion, an increase of 2.1% from the prior year.
Challenges
The relaunch of Thorntons in wholesale has been a pivotal part of Ferrero’s strategy this year. By introducing a new core range, supported by a strong media investment, focused activity and exceptional in-depot execution, Thorntons products are now enjoying double-digit growth in wholesale. The confectionery category has been experiencing a period of decline. However, Ferrero continues to drive growth. We offer wholesalers a core range of products that are distinct and often unique, allowing us to drive incremental value in the category. Ferrero has a clear strategy on portion control and responsible treating, allowing our products to be enjoyed as part of a balanced and varied diet – more than 95% of Ferrero’s products contain fewer than 150 calories.
Failures
Failure Case Study: Ferrero Gran Soleil Dessert - Misaligned positioning failed to resonate with shoppers", is part of GlobalData's Successes and Failures research. It examines the details of and reasons behind Ferrero Gran Soleil's negative performance in Italy. It delivers the critical "what?", "why?", and "so what?" analysis to teach you crucial lessons that increase your chances of launching successful products. Despite being launched in Italy, which is one of the biggest ice cream markets and is home to consumers who are more experimental than the global average when buying ice creams, the new concept of a sorbet sold on the ambient shelves failed to entice Italian shoppers.
A Nutella factory in Normandy has been shut down as a precaution after “quality issues” were found in samples of the chocolate-hazelnut spread and Kinder Bueno candy bars, Italian parent company Ferrero reported.
Achievements
- Ferrero Group and its affiliate, Ferrara Candy Co., won at the 2019 Product of the Year Awards.
- Ferrero’s Tic Tac Gum won in the Gum category.
Subsidies
- Ferrara Candy Company
- Keebler Company
CEOs
- Lapo Civiletti
- Giovanni Ferrero