Ferrero Group in Packaged Food (World)

STRATEGIC EVALUATION
SWOT: Ferrero Group
STRENGTHS
WEAKNESSES
Ferrero brand equity
Financial independence
Developed market bias
 Ferrero Rocher, Kinder
and Nutella enjoy a
high-profile presence in
their respective
categories and the
company's product
range boasts a loyal
consumer base.
 Ferrero's finances are
private but it possesses
the muscle to mount
major growth. A strong
degree of fiscal
independence is pivotal
to any future deal,
however.
 Ferrero is reliant on the  89% of Ferrero's
economically fragile
confectionery sales are
Western Europe market. generated in chocolate,
The developed market
and as a major
bias reaches almost
confectioner it is missing
80% in total, including
out on the growth trends
North America and
in sugar confectionery
Australasia.
and gum.
OPPORTUNITIES
Emerging markets
Narrow category focus
THREATS
Smaller pack sizes
Intensifying competition
Shift to healthier snacks
 Economic growth and
 Investment in the
 Not only does Ferrero
 A continuing trend for
rising demand for richer
development of smaller
face rising competition
wellbeing is expected to
products are fuelling
pack sizes allows Ferrero
in the premium
increasingly encourage
demand for premium
to tap into key trends,
chocolate arena, from
consumers to switch
chocolate in key
such as convenience and
the likes of Godiva and
from chocolate
emerging markets.
portion control, and to
Guylian, it must also
confectionery to
Attractive target markets remain within the budgets contend with private
healthier snacks such
are, for example, Brazil
of core market cashlabel products in fiscally as snack bars or nuts.
and India.
strapped consumers.
fragile core markets.
© Euromonitor International
PACKAGED FOOD: FERRERO GROUP
PASSPORT 1
COMPETITIVE POSITIONING
Ferrero's premium portfolio underperforms recovering market
2010: Rising competition –
Ferrero falls below packaged food
growth due to rising competition in
premium confectionery and
softening economic conditions in
core European markets.
© Euromonitor International
2011: Global packaged food and
confectionery experience stronger
growth in 2011. Despite
accounting for a relatively small
proportion of company sales,
emerging markets also boost
Ferrero's sales. However,
Ferrero's decline in a number of
troubled European markets, such
as Greece, Spain and Portugal,
contributes to the company's
below market level performance.
PACKAGED FOOD: FERRERO GROUP
2012: Ferrero's packaged food
sales growth slows, largely
caused by weaker performance in
a number of core European
markets, such as Italy, Germany,
Spain and Portugal. However,
growth remains strong in
emerging markets, especially in
China and India.
PASSPORT 2
COMPETITIVE POSITIONING
Ferrero slips outside top 10 global packaged food players
2009
2010
2011
2012
Packaged Food: Top 12 Global Players by Value
Share and Ranking 2009-2012
%
share
2012
Nestlé SA
1
1
1
1
3.4
Mondelez
International
-
-
-
2
2.2
PepsiCo Inc
4
4
3
3
2.0
Unilever Group
3
3
4
4
1.9
Mars Inc
5
5
5
5
1.5
Danone, Groupe
6
6
6
6
1.4
Kraft Foods Group,
-
-
-
7
0.9
Kellogg Co
8
7
8
8
0.9
General Mills Inc
9
8
7
9
0.8
Lactalis, Groupe
13
11
9
10
0.7
Grupo Bimbo
11
9
10
11
0.7
Ferrero Group
10
10
11
12
0.6
Companies
© Euromonitor International
 Acquisition has been the driving force behind much of
the growth of the top global packaged food players,
and, with the exception of Unilever, all executed
global-scale purchases and integration of new assets
during 2008-2012.
 The Kraft/Cadbury merger in 2010 led to the splitting
of the company into two independently listed entities,
Mondelez International and Kraft Foods Group, both
large enough to rank among the global top 10 players.
 Nestlé has in recent years concentrated on bolt-on
acquisitions, with a focus on emerging markets but it
also purchased Pfizer's baby food assets in 2012.
 Lactalis pursued the most intense acquisition policy,
making multiple acquisitions per year during the
review period in many European markets. In 2011, it
acquired Parmalat's assets worldwide.
 More recent are General Mills' purchase of Yoplait
globally and Kellogg's acquisition of the Pringles
brand, adding almost US$1 billion to its sales in North
American sweet and savoury snacks.
 In this consolidating environment, Ferrero's purely
organic growth strategy and the weaker performance
in core, recession-hit markets led to the company's
exit from the top 10 ranking in packaged food.
PACKAGED FOOD: FERRERO GROUP
PASSPORT 3
BRAND STRATEGY
Ferrero's portfolio vs global confectionery market performance
© Euromonitor International
PACKAGED FOOD: FERRERO GROUP
PASSPORT 4