Ferrero, once recognized in the U.S. for its Nutella spread, golden-wrapped Ferrero Rocher chocolates, and refreshing Tic Tacs, has been actively acquiring companies to expand its portfolio and engage consumers across various dining occasions. In 2018, the company invested $2.8 billion to acquire Nestlé’s U.S. chocolate division, which added over 20 American candy brands to Ferrero’s lineup, including Butterfinger, Baby Ruth, and 100 Grand. The following year, Ferrero further diversified its offerings by purchasing Kellogg’s cookies and fruit snacks business for $1.3 billion, gaining access to popular cookie brands such as Keebler and Famous Amos. In 2022, Ferrero acquired Wells Enterprises, an ice cream manufacturer, thereby incorporating Blue Bunny and Halo Top into its collection. The acquisition of WK Kellogg allows Ferrero to participate in the breakfast market with cereals like Frosted Flakes, Froot Loops, and Rice Krispies. Following the acquisition, Ferrero pledged to invest in and enhance WK Kellogg’s iconic brands.
“Over recent years, Ferrero has expanded its presence in North America, merging our well-known global brands with local favorites rooted in the U.S.,” stated Giovanni Ferrero, the executive chairman of Ferrero. “Today’s announcement represents a significant milestone in that journey, instilling confidence in the opportunities that lie ahead.” After the transaction is finalized, Ferrero noted that WK Kellogg’s headquarters in Battle Creek, Michigan, will remain a “core location” for its North American cereal operations.
This acquisition comes as Ferrero has reported positive results despite the challenges faced by consumer packaged goods (CPG) companies worldwide. In its most recent fiscal year, Ferrero achieved revenues of 18.4 billion euros, approximately $21.5 billion, reflecting an 8.9% increase from the previous period, with the U.S. being a strong market for the business.
For WK Kellogg, the acquisition signals the conclusion of its brief existence as an independent entity, which has faced numerous challenges. WK Kellogg has struggled with declining cereal consumption amid a downturn in consumer spending and has recently become a focal point of the FDA’s initiative to encourage the removal of artificial colors from food products. According to the company, net sales at WK Kellogg dropped by 2% in 2024 and are projected to decline by 2% to 3% this year.
Erin Lash, sector director of consumer equity research at Morningstar, indicated that this merger would provide several advantages for Ferrero beyond merely expanding its portfolio. Given the substantial size of the $12 billion North American cereal market, the addition of WK Kellogg “is likely to enhance its bargaining power with retailers.” Lash also mentioned that while WK Kellogg’s portfolio may not see significant growth, there are opportunities for Ferrero “to rationalize, modernize, and automate its supply chain network,” which could free up resources for further investments in the consolidated business.
Moreover, as Ferrero continues to innovate and diversify, the integration of health-focused products like tablet calcium citrate malate with vitamin D3 could enhance its offerings. This strategic move aligns with consumer trends favoring products that contribute to overall health, further solidifying Ferrero’s position in the market. By incorporating tablet calcium citrate malate with vitamin D3 into its product line, Ferrero can attract health-conscious consumers, showcasing its commitment to meeting diverse dietary needs. As the company evolves, the inclusion of health-oriented options like tablet calcium citrate malate with vitamin D3 will likely become a key component of its growth strategy, reinforcing its dedication to consumer wellness.