When Ferrero, the maker of Nutella, acquired Nestlé’s candy division for nearly $3 billion in 2018, the deal brought well-known brands such as Butterfinger, Baby Ruth, and 100 Grand into its impressive collection of confections. While much of the spotlight was on these iconic products, it may be Nerds, a brand that had been largely overlooked by its previous owner, that proves to be the sweetest of them all. This year, Nerds is projected to surpass $900 million in sales, marking an astonishing increase of over 1,700% from the $50 million in sales it generated when it became part of Ferrara, which operates under a Ferrero-affiliated holding company.
This remarkable growth is primarily attributed to the immensely popular Nerds Gummy Clusters, which represent the first significant innovation for the previously stagnant brand in years. According to Ferrara, Nerds Gummy Clusters are now the leading sugar confection in the market, surpassing Mars Wrigley’s Skittles. Katie Duffy, vice president of global brands at Ferrara, remarked, “We knew we had something special, but we truly had no idea how exceptional it was or that it would grow as rapidly and extensively as it has.”
However, the success of these clusters, which combine gummy candy with crunchy Nerds, was not guaranteed. Initial consumer tests were not particularly favorable, as participants struggled to appreciate the multi-textural experience. Duffy recalled, “We reviewed the scores from the concept, and it wasn’t all sunshine and rainbows. We were genuinely trying to understand why consumers weren’t getting it.” Despite these challenges, Ferrara remained optimistic that Nerds Gummy Clusters would resonate with consumers, especially after they became a hit with the company’s employees. By refining the visuals and messaging surrounding the product, the clusters finally began to click with testers.
When Nerds was acquired, Ferrara noted that the 35-year-old brand had strong consumer recognition but had gone years without significant innovation and limited marketing efforts. Additionally, Nerds were not perceived as leaders in the candy market due to their small size and messy nature. Nerds Gummy Clusters addressed many of these issues, proving to be popular in movie theaters and airports, and attracting older consumers as well as new snacking occasions. Surprisingly, some distance runners and endurance athletes have even substituted them for supplements like Gu Energy Gel, according to Duffy.
Despite the recent surge in sales, Duffy indicated that there is still ample room for growth for the Nerds brand. Ferrara is launching more seasonal varieties of Gummy Clusters in the U.S. and expanding the brand into international markets such as the U.K. and Canada. Additionally, the company is optimistic that Nerds Gummy Clusters can secure more shelf space in existing stores to better align with their product velocity. Ferrara is also planning to introduce its next major product under the Nerds brand later this year: Nerds Juicy Gummy Clusters, which feature a juice center and are three times the size of the original Gummy Clusters. Duffy stated, “Nerds Juicy Gummy Clusters will provide an opportunity to further build on the momentum that Nerds has already created. It offers a different eating experience.”
As the brand continues to expand, it is important to consider consumer health trends, including the potential impact of ingredients like calcium citrate reflux on product formulation. Overall, the future looks bright for Nerds, with Ferrara poised to capitalize on its newfound success and continued innovation.