Nestlé and Ferrero struck a deal regarding the former’s American chocolate division. The Nutella manufacturer will pay 2.4 billion euro to become the world’s third largest chocolate manufacturer. At the same time, Nestlé can turn its attention to healthier options in the United States.
Ferrero follows ‘American dream’
Italian Ferrero, known for its chocolate paste Nutella and its Ferrero Rocher pralines, will buy Nestlé’s American candy division for 2.8 billion dollars. That is a huge investment, because the Swiss group’s candy factory generates a 760 million euro turnover and only contributes one percent to Nestlé’s total turnover. Looking at the United States, chocolate candy only contributes three percent to the company turnover.
Most analysts thought Hershey would acquire the division, as it is already the chocolate candy market leader in the United States. However, it seems the Italians have won the battle. The company seeks rapid international growth and already acquired two other companies in the United States over the course of the past twelve months. According to Euromonitor, it will now become the third largest chocolate manufacturer, both in the United States and worldwide.
More food, health and welness at Nestlé
Nestlé aims to focus more on “food, health and wellness”, according to CEO Mark Schneider. Consumers want healthier products, which is also true for American consumers. Those that still want to sin, will turn their gaze towards premium products and brands more often. Nestlé’s candy bars, which includes BabyRuth, Butterfinger and Crunch in the United States, therefore face more pressure.
Even the Swiss company says it will continue its candy division outside of the United States, bankers and analysts think it may sell even more brands or even the entire division. Schneider knows his way around the health industry and has already steered Nestlé towards acquisitions in the vitamin supplement industry. Only last week, Nestlé has also put up the Violet Crumble chocolate brand on sale in Australia.
