Italian confectionery group Ferrero is seeking continued growth by investing in new products and entering new market segments, the company has revealed.
Turnover in the financial year to 31 August 2017 amounted to €10.5 billion, up 1.5% on the previous period, according to the consolidated financial report of Luxembourg-based holding Ferrero International.
Total investments were €744 million, mostly in property, plants and machinery in Italy, Germany, Poland, Canada and Luxembourg.
Product sales grew 2.2% in the period, driven by European markets such as Germany, Poland, the UK, and Eastern Europe, while the largest growth overseas came from the US, Canada and Mexico.
The results also include Fannie May, a US premium chocolate confectionery manufacturer of the Fannie May and Harry London brands, which Ferrero acquired from 1-800-Flowers.com.
Sales of Ferrero products (available in over 170 countries) were led by Nutella, Ferrero Rocher, Kinder Surprise, Kinder Joy, Kinder Bueno and Tic Tac.
Nutella Products
The popular Nutella hazelnut cream spread, which this year celebrates its 54th anniversary, accounts for 20% of total revenues, with an estimated 460,000 tonnes produced each year in 11 Ferrero factories across the world.
Due to its global success, Ferrero has opted to use Nutella as one of the key ingredients in a line of new products it is launching to expand its presence in the biscuit segment.
After the successful launch of Nutella B-ready in 2015, followed by Kinder Cards (a thin biscuit with a creamy milk and cocoa filling), Ferrero is now investing €50 to 65 million in a new production line at its Balvano plant near Potenza to produce Nutella Biscuits. Production will start this summer and new snack should be available in stores from 2019.
In order to secure the key ingredient of Nutella, Ferrero has launched Progetto Nocciola Italia, promoted by Ferrero Halzelnut Company, with the aim of increasing hazelnut production in Italy by providing support for Italian producers.
The aim is to develop 20,000 hectares of new hazelnut plantations by 2025, a 30% increase on the current 70,000 hectares. However, Ferrero has made it clear it will continue to source hazelnuts from other countries, such as Turkey, Chile and South Africa.
Currently, Italy is the second largest player in the world with a market share of around 12% of global nut production, lagging far behind Turkey, which accounts for 70% of the total market, and ahead of Georgia.
Organic Market
Ferrero has also recently entered the organic market, with the launch of Estathè Verde Bio, consisting of quality ingredients coming from controlled supply chains. The beverage consists of a specific variety of green tea, Gunpowder, which originates from the Chinese region of Shimen. Sicilian lemons and cane sugar are also obtained from raw materials grown and processed according to the principles of organic farming.
Estathé Verde Bio has obtained certification from Bioagricert, a control and certification body that verifies and ensures compliance with production requirements along the entire supply chain.
© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Branislav Pekic. Click subscribe to sign up to ESM: The European Supermarket Magazine
