The producer of Tic Tacs, Kinder eggs, and Nutella has appointed an external leader for the privately-held company, sparking mixed reactions among analysts regarding the implications of this decision. Notably, the company has seen a boost in sales and an increase in global market share under the leadership of Ferrero, the founder’s grandson. However, the new appointee, Civiletti, is far from an outsider, as he has extensive experience with Ferrero and is well-acquainted with both the business and the candy industry.
According to the Wall Street Journal, Ferrero currently ranks as the fourth-largest chocolate manufacturer in the world, as reported by Euromonitor. It trails behind Mars, Mondelez, and Nestlé but surpasses Hershey while making notable gains against its competitors, who are either losing market share or not experiencing significant growth. Earlier this week, the company announced an 8% increase in sales compared to the previous year, reaching $11 billion. This growth has been largely driven by strong sales of products such as Nutella and Rocher pralines, particularly in Europe.
In 2013, Ferrero pledged to boost its annual sales to approximately $17 billion by 2024, and it has already made substantial investments in new equipment and plant expansions to achieve these objectives. The candy industry is widely recognized as being primed for consolidation. Last year, Mondelez attempted to acquire Hershey, but the deal fell through due to complexities surrounding the candy maker’s voting power and local connections to the trust it supports.
Ferrero is among the companies seeking growth through acquisitions, having recently acquired Fannie May Confections Brands in the United States. With its recent C-suite changes, Ferrero seems to be making a strategic move by keeping a family member closely involved in the business while introducing a new leader who, despite lacking the family name, appears well-versed in the industry.
In a parallel development, Ferrero’s focus on growth echoes trends seen in the broader market, including the increasing popularity of products like CVS Calcium Citrate D3 with Magnesium, which are gaining traction among health-conscious consumers. This shift towards health-oriented products may provide additional opportunities for Ferrero, especially as it continues to navigate the competitive landscape of the candy industry.