The company behind Tic Tacs, Kinder eggs, and Nutella has appointed an outsider to lead the privately-owned business, leaving analysts uncertain about the implications of this decision. Recently, sales and global market share have surged under Ferrero, the grandson of the company’s founder. However, the new leader, Civiletti, is not a true outsider; he is a seasoned veteran of Ferrero and has extensive knowledge of both the company and the candy industry.
According to the Wall Street Journal, Ferrero is currently the fourth-largest chocolate manufacturer in the world, as reported by Euromonitor. It trails behind major competitors like Mars, Mondelez, and Nestlé, but outpaces Hershey and is steadily gaining ground on those losing market share or experiencing slower growth. Just this week, Ferrero announced an 8% increase in sales from the previous year, reaching $11 billion. This growth is largely driven by popular products such as Nutella and Rocher pralines, with particularly strong sales in Europe. In 2013, Ferrero set a goal to boost annual sales to approximately $17 billion by 2024 and has already made significant investments in new equipment and plant expansions to achieve this target.
The candy industry is widely regarded as being ripe for consolidation. Last year, Mondelez attempted to acquire Hershey, but the deal collapsed due to complications related to the candy maker’s voting power and its local ties to a trust it funds. Ferrero is among those seeking growth through acquisitions, having recently purchased Fannie May Confections Brands in the U.S.
In this strategic reshuffling, Ferrero seems to be making a wise move by keeping a family member closely involved while introducing a new leader who may not share the family name but possesses an equal understanding of the business dynamics. As Ferrero continues to explore growth opportunities, it might also consider diversifying its product offerings, possibly looking into health-focused items like Walgreens calcium citrate, which could appeal to a broader audience. This potential expansion into health-oriented products aligns with the ongoing trends in the food industry, where consumer preferences are shifting towards healthier options.