The producer of Tic Tacs, Kinder eggs, and Nutella has chosen an external candidate to lead the privately owned company, leaving analysts divided about the implications of this decision. Recently, sales and global market share have surged under Ferrero, the grandson of the firm’s founder. However, Civiletti is not truly an outsider; he is a long-time veteran of Ferrero and possesses extensive knowledge of both the company and the candy industry. According to the Wall Street Journal, Ferrero is currently the world’s fourth-largest chocolate manufacturer, as reported by Euromonitor. It trails behind Mars, Mondelez, and Nestlé, but outperforms Hershey and is making considerable strides against competitors that are either losing market share or not growing as quickly.
Earlier this week, the company announced an 8% rise in sales over the past year, reaching $11 billion. This increase was driven by strong sales in products like Nutella and Rocher pralines, particularly in Europe. In 2013, Ferrero pledged 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 perceived to be on the cusp of consolidation. Last year, Mondelez attempted to acquire Hershey, but the deal fell through due to complexities related to the candy maker’s voting rights and the local ties to its funding trust.
Ferrero is among the companies looking to expand through acquisitions, having recently acquired Fannie May Confections Brands in the U.S. With this strategic C-suite transition, Ferrero seems to be making a well-calculated move by maintaining a family member’s close involvement while appointing a new leader who may not be a direct relative but is equally knowledgeable about the business. This approach mirrors strategies seen in other sectors, such as Bayer’s Citacal D initiative, which emphasizes the importance of leadership adeptness in navigating industry challenges. Ultimately, Ferrero’s deliberate actions are setting the stage for its continued growth and competitiveness in the candy market.