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Ferrero to acquire US confectionery business Ferrara

Confectionery giant Ferrero Group is to acquire Ferrara Candy Company, which claims to be the third largest US non-chocolate confectionery company.

The move expands Ferrero’s US business and establishes its presence in what it describes as attractive confectionery categories – gummy and seasonal candies.

Ferrara is best known for its Trolli, Brachs and Black Forest Organics brands, while Ferrero is the third-largest company in the global chocolate confectionery market and best known in the US for Tic Tac breath mints, Ferrero Rocher pralines, Nutella hazelnut spreads, and the Fannie May and Harry London chocolate brands.

Ferrero expects to operate Ferrara as a separate unit and keep Ferrara’s headquarters in Oakbrook Terrace, Illinois. The company noted that Ferrara has consolidated its manufacturing and distribution footprint to four plants in Bellwood and Forest Park, Illinois, and Reynosa and Vernell, Mexico, two distribution centres in Bolingbrook, Illinois and Grand Prairie, Texas, and an engineering and R&D centre in Bellwood, Illinois. Ferrero intends to maintain and leverage this existing footprint with no further planned consolidation.

Ferrero recently introduced Tic Tac gum and Kinder Joy to the US market, with both products scheduled to be available in stores in January 2018. The company has also opened the world’s first Nutella Café in Chicago, offering a range of Nutella-based products, along with beverages, sandwiches and soups.

Giovanni Ferrero, executive chairman of the Ferrero Group, notes, “With this acquisition, we are continuing to increase our overall footprint and product offering in the important US market, establishing a presence in new confectionery categories with attractive growth prospects, including gummy and seasonal candies. We look forward to continuing to grow the Ferrara business, investing in its brands to support expansion plans, leveraging its US manufacturing plants and distribution centres, and creating opportunities for its talented people.”

Ferrara CEO Todd Siwak, adds, “Joining forces with Ferrero gives us the opportunity to accelerate our growth plans in the US and international markets and share best practices as part of a larger, stronger organisation.”

The transaction, which is subject to customary closing conditions and regulatory approvals, is expected to close in the fourth quarter of 2017. Terms of the deal have not been disclosed.

Commenting on the US confectionery market, Euromonitor analysts explain, “International companies have been able to find success in the US sugar confectionery market, including Haribo (Germany) and Perfetti Van Melle Group (Italy). In fact, the US subsidiaries of these companies (Perfetti Van Melle USA and Haribo of America) reached a combined value share of 6% across sugar confectionery 2016, up from a combined 5% share in 2012.

“Perfetti Van Melle’s Airheads brand has proven to be a source of growth, and in February 2016 the brand celebrated its 30th anniversary with the launch of a limited edition birthday cake flavour. Haribo also had a big year in 2016 with the launch of its new Twin Snakes brand in April. The presence of these international companies is particularly pronounced in the rapidly growing pastilles, gums, jellies and chews category, as Perfetti and Haribo held a combined value share of 13% in this category in 2016.”

 

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