Nutella maker Ferrero is spending big to accelerate innovation and expand its fast-growing portfolio, better positioning the food company to take on Hershey and Mars as it looks to become the leader of the U.S. sweets market.
During the last decade, the Italian confectionery company has spent billions of dollars to fill its U.S. portfolio with everything from ice cream and bars to cookies and candy. Ferrero said it is spending $50 million in 2027 — double its figure a year ago — to promote its portfolio at U.S. sporting events including the Super Bowl, where it will debut new Kinder Bueno and Nutella advertisements.
“It may sound unrealistic or arrogant, but our goal is to be the largest and the best sweet package food company in the U.S.,” said Michael Lindsey, president and chief business officer for Ferrero North America. “We're not quite there yet. We're entering that powerhouse territory.”
Since entering the U.S. in 1969, Luxembourg-based Ferrero’s presence has been largely centered around its iconic Nutella chocolate and hazelnut spread, golden-wrapped Ferrero Rochers and minty Tic Tacs.
Under the leadership of chairman Giovanni Ferrero, Ferrero has moved aggressively to boost the innovation of these brands while spending more than $8 billion on acquisitions to enter new sweets categories. Today, Ferrero’s U.S. business includes everything from Keebler cookies and Halo Top ice cream to Rice Krispies cereal and Power Crunch protein bars.
Lindsey said many consumers and retailers are unaware of Ferrero’s size or the scope of its portfolio following its recent acquisition binge. The company’s Keebler line, for example, is now the fastest-growing cookie brand in the U.S. by a “reasonable margin,” while Kinder Bueno is the top chocolate brand in the world by sales, he said.
Total U.S. sales have surged from $300 million in 2017 to more than $11 billion last year, roughly the size of Reese's maker Hershey, when Ferrero's other units of Ferrara, Wells and WK Kellogg’s are included. Ferrero’s goal is to reach $20 billion within the next decade.
“We are now at a scale across the ecosystem that is equal to most of the very large competitors that we compete against, and it really all happened in the last, call it seven, eight years,” Lindsey said.
Ferrero's newfound scale in the U.S has created significant benefits across its supply chain, allowing the company to work more closely with retailers and suppliers while gaining a better understanding of what consumers want, Lindsey said. Ferrero also has invested billions of dollars to build an R&D lab, plants and other infrastructure in the U.S. to further grow its portfolio.
The company has rolled out new products at a rapid pace, including several innovations announced this week spanning both its decades-old brands as well as newly acquired assets.
The company expanded its Nutella spread into frozen waffles and brought its Tic Tac Two extension to the U.S. The sugar-free innovation, which features a combination of flavors and has proved popular in Europe, will be available in Raspberry & Lemon and Spearmint Cool & Mild.
Ferrero also announced a partnership with Marvel Superheroes on limited-edition flavors inspired by the franchise. Its first innovations include Butterfinger Green Apple Smash, inspired by the nostalgic apple slices dipped in peanut butter snack, and Crunch Infinity Chocolate, a new bar featuring cocoa crisp rice.
Lindsey said Ferrero's significant investment in the U.S., coupled with insight it has gained through acquisitions, have made some of its new innovations possible.
“No one cares about how big we are,” Lindsey confessed. “What's important is the scale that we can bring and the capability we can bring to the market because of the resources we have at our disposal, which now are significant.”
