Ferrero tables bid for Delacre biscuit brand

Confectionery giant Ferrero has offered to acquire Belgian biscuit brand Delacre for an undisclosed sum – a move one analyst says is an attempt to reduce its over-reliance on chocolate.

In a statement sent to Confectionery Production, a spokesperson for Ferrero said, “We confirm that a Ferrero affiliated entity has made an offer to acquire the manufacturers of Delacre and Delichoc biscuits, Biscuits Delacre and United Biscuits Industries SAS, from United Biscuits.

“Standard procedures and steps for a transaction of this nature are being followed and the parties will provide further updates in due course.”

According to research firm Euromonitor International, Ferrero’s bid is an attempt to decrease its over-reliance on chocolate, which it believes is now facing a number of challenges both from supply and demand sides.

Pinar Hosafci, senior food analyst at Euromonitor, explains, “While Ferrero’s portfolio momentum has been going strong in the UK, the US and China, sales have suffered in Germany, Italy and France, which together account for 41% of the company’s packaged food revenue. As a result, the company has been investing in markets with higher potential such as China, the UK and the US.”

In Western Europe, the price gap between premium mass players such as Ferrero and store-based premium players like Godiva and Hotel Chocolatier is narrowing. Hosafci believes Delacre is a relatively safer bet for Ferrero as the company specialises in premium biscuits, which has “obvious synergies” with chocolate and complements Ferrero’s image as a premium player.

Delacre also has a store in Belgium, Hosafci says, aiding Ferrero’s goal of store-based expansion as seen both by the takeover of store-based Thorntons and the growing number of Nutella cafés which are opening in Middle Eastern markets.

While the majority of Delacre’s sales stem from Belgium and France, the brand also has a presence in the US and Canada.

“This holds a strategic opportunity for Ferrero, which has been struggling to increase its footprint in North America in the face of the strong competition from Lindt, which has doubled its revenue within less than five years to reach 9% of the chocolate market in 2015, and Godiva, which – unlike in Western Europe – is sold in mass retailers in the US including Walmart,” Hosafci notes.

“By bringing its chocolate-based innovation to the biscuits category, Ferrero could use Delacre as a tool to crack open the North American market which to date still remains the world’s uncontested leader in snacks.”

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