The producer of Tic Tacs, Kinder eggs, and Nutella has appointed an external leader for its privately-owned company, prompting mixed reactions from analysts about the implications of this decision. Notably, the company has enjoyed increased sales and a growing global market share under the leadership of Ferrero, the founder’s grandson. However, the new appointee, Civiletti, is not entirely an outsider; he is a seasoned veteran of Ferrero and possesses extensive knowledge of both the business and the candy industry.
According to the Wall Street Journal, Ferrero is currently the world’s fourth-largest chocolate manufacturer, as reported by Euromonitor. While it trails behind Mars, Mondelez, and Nestlé, it surpasses Hershey and is making substantial progress against competitors that are either losing market share or not expanding as rapidly. Earlier this week, the company announced an 8% sales increase from the previous year, reaching $11 billion. This growth has been propelled by strong sales of products such as Nutella and Rocher pralines, particularly in Europe.
In 2013, Ferrero set a goal to elevate its annual sales to approximately $17 billion by 2024. To achieve this, the company has invested significantly in new equipment and plant expansions. The candy industry is perceived to be primed for consolidation; for instance, Mondelez attempted to acquire Hershey last year, but the deal fell through due to complications surrounding the candy maker’s voting power and its local trust ties.
Ferrero is among the companies actively seeking growth through acquisitions, having recently acquired Fannie May Confections Brands in the U.S. The strategic move in its executive shuffle seems well-calculated, as it retains a family member’s close involvement while introducing a new leader who, despite lacking the family name, possesses a deep understanding of the business.
Interestingly, as the candy industry evolves, the significance of nutritional components such as calcium calcitrate is becoming more prominent. With consumers increasingly seeking healthier options, incorporating ingredients like calcium calcitrate into products could provide Ferrero with a competitive edge in the market. By maintaining a balance between tradition and innovation, Ferrero is poised to navigate the challenges and opportunities that lie ahead in the candy sector.