Ferrero Rocher

This week in the world of public relations lots of big things happened, one of the biggest may be that the Italian candy company, Ferrero, most commonly known for Nutella and Tic Tac. Has acquired many different iconic American brands from Kellogg for $1.3 billion. This acquisition consists of Kellogg’s cookie, fruit snack, ice cream cone, and pie crust business. These combined areas generated a combined $900 million in 2018. The Ferrero group has been on a spending spree since early 2015 from an aggressive new approach by the CEO in order to expand and get more business. The CEO Giovanni Ferrero had said that his goal is to double revenue every 10 years meaning more acquisitions are to come. The Kellogg group that is very well known for the elves making Keebler cookies, actually wanted to get rid of its cookie brand since November 2018, this is due largely to the fact that Kellogg wants to keep its attention towards its main brands of cereals because it is said that the cookie industry is already a very crowded industry.

With Ferrero making so many strong acquisitions you start to wonder if the company is becoming a Monopoly and who are if any, the competitors for this billion dollar company. Some competitors consist of Hershey, Mars, Lindt, Nestle, and Godiva. When you look at all these companies you start to think that they are huge competitors because their brand is so well known. But, Ferrero’s aggressive acquisition style has led it to be in many different industries including cookies, chocolates, candies, and breath-savers. This is a huge competitive advantage for Ferrero because they have dipped their toes in so many different industries while their competitors tend to only be in one or two big industries.

The backstory of how Ferrero created its first top seller is actually very interesting. The company started as a modest coffee and pastry shop during WW2. Back then the shop had to make some tough decisions because cocoa was so scarce during the war, this caused Ferrero to start implementing hazelnuts, cocoa butter, and vegetable oil which was turned into a paste. This paste became very popular among the people coming to the pastry shop and was later named Nutella. It is interesting to look at where the company started and how they were so scarce on materials that they had to switch to other cheaper materials which inevitably lead to an amazing new product.