Ferrero to buy Thorntons
The Italian firm behind Ferrero Rocher chocolates and Nutella spread has agreed to buy British chocolate retailer Thorntons for £112m, according to Reuters.
Thorntons has been hit in recent years by the rise of newer and upmarket brands such as Green & Black’s and Hotel Chocolate, says the report.
It has had some success selling chocolates through other outlets while closing some of its own stores, but after a profit warning in December its chief executive of four years, Jonathan Hart, is stepping down.
Analysts said Thorntons was a good fit for Ferrero, which has strong, premium brands but no retail platform to showcase them.
As an independent sales & marketing consultant in the international / premium chocolate sector, I guess I might qualify as an ‘Industry Watcher’.
The Thornton’s brand needs lots of work and Ferrero’s strategy will, amongst many other things, need to consider whether to keep and invest in the High St stores, re-brand them to Ferrero, or close them.
The manufacturing site is good but the product has been ‘value engineered’ almost to death to meet the demands of the supermarkets and shareholders, (hence all the ‘I’m sure their quality has gone down’ comments on here).
As a brand, Thornton’s have also been overtaken by much stronger offers, not least Hotel Chocolat, and made matters worse by slaughtering its own positioning in pursuit of sales through every conceivable channel.
Ferrero are not retailers while Thornton’s (failed) attempt at being a branded FMCG supplier has led to their vulnerability. The question is therefore whether Ferrero will use their resources to turn Thornton’s into a good FMCG supplier (probably keeping the manufacturing site), and/or will they re-invigorate the retail business which made Thornton’s great before they shot themselves in the foot?
The dual (FMCG and retail) strategy has been shown not to work and Ferrero’s skills are not in the latter. However, Hotel Chocolat in the UK, and others beyond, have proved High St retailing can be successful and with supermarket shopping in LT decline, keeping the retail estate does have merit.
I know what I would do in their situation given the opportunity…