For decades, Ferrero International carved out a prominent niche in U.S. confections selling its iconic line of Nutella chocolate and hazelnut spread, golden-wrapped Ferrero Rochers and minty Tic Tacs.
In 2017, Ferrero started moving aggressively to expand its American portfolio by spending $1.3 billion for Ferrara Candy, the maker of Brach's, Lemonheads and Red Hots, and another $2.8 billion for Nestlé's U.S. chocolate business that included Butterfinger and Baby Ruth. And in April 2019, it doled out $1.3 billion for a suite of cookies, snacks and other baked goods from Kellogg, such as Keebler and Famous Amos.
But as quickly as those deals came, Ferrero has shifted from deal making to taking a deep dive into the brands they acquired to make them more relevant to today's consumer without losing what people love about the offerings — some of which are more than a century old. A major focus recently has been in Keebler, a 167-year-old cookie brand whose offerings include Chips Deluxe, Fudge Stripes and Sandies.
"These are iconic brands that really need to be thoughtfully brought along the journey with the consumer. You can not pivot from Point A to Point B in a drastic matter and then attempt to keep all of your existing consumers," said Natalie Hagstrom, general manager for cookies at Ferrara. The company has managed the cookie division since its purchase by Ferraro.
Hagstrom, who previously worked on modernizing the chocolate offerings Ferrero purchased, is bringing many of the same insight to rejuvenate its cookies by focusing on the ingredients, packaging and how the brands engage with consumers. "You have beloved brands, 150-plus years old, that the consumer will tell you they were part of their childhood, and in terms of relevancy have kind of lost their way a little bit," she said.
Hagstrom is quick to point out that Keebler and other brands in the company's cookie portfolio weren't necessarily in need of a sweeping overhaul, but rather stood to benefit from small changes that would increase consumer awareness and make shoppers want to purchase them more often.
The challenge, she said, was to modernize the offerings without putting in place too many changes that would make them unrecognizable to long-term customers or not provide enough incentive to woo new shoppers or people who may have not purchased the brands recently.
"When you talk to the consumer [and they tell you] that your brand is nostalgic, but it's not necessarily modern, that's an opportunity to talk to them in a new way," Hagstrom said. "Our cookies were always doing very well by consideration, just that we knew there was an opportunity if we wanted to increase" consumer purchases of our products.
Ferrara will now make Keebler Chips Deluxe with natural vanilla and more real chocolate. Its Fudge Stripes have real Keebler Fudge and the Sandies use Madagascar vanilla — all of this a nod to the growing consumer interest in better tasting and more authentic ingredients.
These ingredients are now being promoted more heavily on its packaging. For example in its Chips Deluxe, chocolate chips are shown just below a cookie and the promise of "made with more real chocolate" touted nearby. The company also shifted to using a single shade of yellow designed to help the product stand out on shelves and online and standardized how Ernie the Elf, the brand's defacto spokesman, is displayed and marketed.
Hagstrom said Ferrera started with Keebler, its largest cookie brand, but that its other offerings such as Famous Amos and Mother's Cookies, could eventually see similar changes. The current iteration of changes to the Keebler brand are making their way to stores shelves, but more updates are planned in the future. Hagstrom declined to say what was coming next.
Similar to other food brands, Keebler has seen a surge in consumption during the coronavirus pandemic as consumers spend more time at home and place a greater importance on buying products they are familiar with. Ferrera said Keebler cookie sales have risen 55% since early March.
Still, even without this tailwind, Hagstrom said the company is seeing an early uptick in sales following the recent changes to the Keebler brand. "When we normalize for COVID, we absolutely are seeing an impact of our products that have just started to flow through on shelves," she said. "So far, all of the signs are very positive and pointing that we are heading in the right direction."
