Ferrero is an Italian confectionery company, privately owned by the Ferrero family. The Reputation Institute’s 2014 survey ranked it as the 22nd “most reputable company in the world”. Ferrero holds 9.5 percent of the world’s chocolate market. Ferrero is the leading chocolate brand in Western Europe. You will shock to know, Its turn over in fiscal year 2020 was $13.1 billion, a 7.8 percent rise from the previous year, and the company employs nearly 38,700 people from 120+ nationalities.
Quick overview of this blog’s content
- Origin
- Ferrero’s Expansion
- Ferrero’s deep product research
- Taping into “Biggest & most diversified market.. India”
- Taping into Australian Market
- Ferrero’s Acquisition
- Beyond Profit & Loss.. “Ferrero’s unconditional service”
1) Origin of ferrero
The success story of this remarkable company begins in 1946 with a small patisserie in Alba, Italy. There, Pietro Ferrero invented a 50 percent hazelnut, 50 percent cocoa confection. Because taxes on cacao beans were extremely high in post-World War II Italy, pure chocolate was not readily available. Alba was known for the production of hazelnuts, and Ferrero’s cheaply produced pasta gianduja block, made from readily available ingredients, suitably satisfied consumers’ cravings for sweet foods. The product was a hit, and by 1951 the Ferrero family had decided to turn the pasta gianduja block into a creamy spread.
By 1951 Ferrero was marketing this as Supercrema. In 1963, Pietro’s son Michele, by then CEO, modified the recipe and marketed it as the immensely popular Nutella. Ferrero now sells more than 67,000 jars of Nutella a year in Italy alone. While it offers a limited product range, Ferrero’s offerings are nonetheless consumable at all times of day, from breakfast (Nutella) to dessert (Ferrero Rocher) and any time in between (Kinder chocolates-Bueno and Surprise and the ever-popular Tic Tac). The emphasis is on quality, and it is certainly part of the key to Ferrero’s success.
2) Ferrero’s Expansion
Ferrero began expanding into Europe in 1956 by setting up a factory in Germany, where chocolate was extremely popular. This early understanding of global trends allowed the company to swiftly expand into French, Australian, Canadian, Asian, Puerto Rican, Ecuadorian, and finally the U.S. markets.
In 1974, Ferrero established operations in Australia with the mission of delighting customers with unique products of the highest quality and integrity, and contributing to the well-being of employers, customers, and the company.
3) Ferrero’s core value- “Quality & High standard delivery”
The firm concentrates on meeting high standards; thus, it manufactures only in places where it is sure it can deliver consistently and establish a secure retailsupply chain, meaning it will never let consumers down. Managing Director of Ferrero Australia, Craig Barker, launched a CSR report in late 2013 that high lighted Ferrero’s commitment to maintaining excellence in quality, freshness, and innovation. The company seeks to promote a balanced diet and lifestyle, including regular physical exercise, and offering great products at the same time.
4) Ferrero’s deep product research
Ferrero’s focus on consumers is accompanied by its emphasis on quality, integrity, product innova- tion, and passion. The company strives to understand market preferences. Ferrero Australia does extensive testing of its products in the Australian market before bringing them to market. First, it carries out internal taste testing to see whether consumers rate the product to the same high standards of the company. Then Ferrero conducts market testing in one state before going national. Ferrero test-marketed three products in the Kinder line in Victoria for two years before nationally marketing them) By understanding the insights of the market, Ferrero has ensured constant growth since the 1940s.
5) Taping into “Biggest & most diversified market.. India”
When Ferrero entered India in 2004, the country did not really have a ready market for premium chocolates. Indian consumers are very price sensitive. Within 10 years, Ferrero transformed the chocolate market with premium brands accounting for 27 percent of the market. Ferrero’s main competitors in India are Cadbury, Nestle, Hersey, Lindt, and Mars.
Ferrero has around 6% of the Indian chocolate market and they are credited with making premium chocolate work in India. Ferrero launched Rocher in 2007 and Tic Tac and Kinder Joy two years later. In late 2011, the company set up its first factory which now produces 20 million packs of Tic Tacs per day along with 1 million Kinder Joy eggs.
Continue to the success story of Ferrero…
6) Taping into Australian Market
In 2013, a $60-million hazelnut development business was approved in New South Wales inAustralia. Ferrero had been working on this for some time and the operation would see 1 million trees planted in two farms. The first commercial crop was expected in 2017 and the farms were expected to be in full production by 2021. This is seen as part of Ferrero’s long-term commitment to Australia and will provide vital jobs in the region.
At full production, the farms were expected to generate some 5000 tons of hazelnuts. The initiative should also help to convince other growers to reconsider hazelnuts as a cash crop. Potentially, the hazelnut export business is worth $170 million in Australia each year.
Ferrero uses its marketing insights to promote sales. The company’s 2010 promotion of Nutella included sponsorship of the Football Federation of Australia and the Socceroos, the Australian national soccer team, and was one of the biggest sponsorship exercises in the history of the brand. It also emphasized that Nutella was one of Australia’s best-known and most-loved brands by associating it with a sport that most Australians enjoy. The sponsorship program resulted in an increase of Nutella’s household penetration from 15.1 to 16.3 percent.
7) Ferrero’ Acquisition
Throughout 2013 there were persistent rumors that Nestlé was about to launch an audacious, and expensive, takeover of Ferrero. Ferrero consistently denied the rumors and Nestlé was surprisingly quiet about it. As the year went on, rather than being the subject of a takeover, it was Ferrero that was doing the taking over. In July they announced the takeover of Turkish hazelnut procurement, processing, and marketing firm Oltan Group. The Turkish business, based in the north of the country, was active in the main hazelnut growing regions. The company had five production facilities and generated annual sales in excess of $500 million. At a stroke, Ferrero had secured vital raw materials for its core products.
8) Beyond Profit & Loss…… “Ferrero’s unconditional service”
Finally, Ferrero Australia has also engaged in many community programs, such as a food bank that distributes food and grocery industry donations to welfare agencies to feed the hungry. It also supports Brainwave, a charity supporting pediatric neuroscience.
The company introduced the pink Tic Tac in celebration of Pink Ribbon Month to support breast cancer research and awareness along with the National Breast Cancer Foundation (NBCF). Ferrero also supports forest conservation methods and the abolition of child labor. It purchases cacao only from suppliers who grow and process without using child labor, and it purchases palm oil only from countries and areas not known for deforestation. Ferrero has been combating the issue of childhood obesity since 2008 by emphasizing Nutella’s role in a healthy and well-balanced breakfast and pledging not to target children in its advertisement.
So this was the untold story of world’s leading chocolate brand “Ferrero”. The success story of Ferrero doesn’t end here. Till today ferrero’s success story is going on.
key facts
For over 70 years, Ferrero have been creating products loved by generations. Thay have grown what started as a small Italian confectionery company into the 3rd largest chocolates producer in the world and quickest growing global player as of August 31, 2018. Similarly, Ferrero, with its related companies, is ranked as among the top three players in the Sweet Packaged Food segment as of December 31, 2018. And if we look at specific product categories – including Chocolate Spreads, Boxed Assortments, Chocolate with Toys, and Chilled Snacks, Ferrero is the undisputed leader.
