Ferrero Group: The Nutella Dynasty

Giovanni Ferrero, executive chairman of The Ferrero Group, makers of iconic brands like Nutella, Tic Tac, and Ferrero Rocher, was in the midst of an aggressive expansion into the competitive US confectionery market in October 2018, a decision that had been unpopular with his allies and critics alike. After acquiring Turkish hazelnut supplier Oltan Group, one of the first acquisitions in the company's seven decades of existence, Ferrero had turned from backward integration to expansion into the United States. In the past two years, the company acquired both the US candy business of Swiss confectionery giant Nestle and Ferrara (no relation to Ferrero), a mainly non-chocolate confectionery company based in the US.

The US had been a challenging market for Ferrero for years due to regulations barring its Kinder Surprise product and to the dominance of peanut butter, a staple of American culture that competed with Nutella. The recent acquisitions gave Ferrero a foothold in the US, but its new brands, though well-known, were declining, and the cheap, low-quality product was of a much different stripe than the gold-wrapped Ferrero Rocher chocolates or the beloved Nutella.

How was Giovanni to gain a foothold in an ultra-competitive US market while staying true to traditions that had made Ferrero successful? Which strategies were ripe for change, and which were core to the success of Ferrero's strategy? Ferrero had always been a globally minded brand, but would the US prove to be an entirely different challenge?