Just in time for Valentine’s Day a sweetheart of a deal was announced last week by chocolatiers The Ferrero Group and Nestlé. Based in Italy, Ferrero is the family-owned creator of popular hazelnut chocolate brand Nutella. They will acquire Nestlé’s U.S. chocolate and confectionary business for US $2.8 billion by end of first quarter 2018.
Nestlé’s U.S. chocolate bar sales had slipped in recent years and insiders believe they are now focusing on products that are being seen as healthier, a category of the market where they lagged behind competitors. Their U.S. confectionary sales accounted for about 1% of Nestlé’s total annual global sales.
Just last month Nestlé purchased Quebec-based Atrium Innovations for US $2.3 billion in cash, rolling their brands into Nestlé’s Health Science division. The Atrium brands include Wobenzym, Douglas Laboratories, Genestra Brands, and Trophic. In their press release last week, they mentioned infant nutrition and frozen meals as areas for planned future growth.
Ferrero’s acquisition appears to be part of their plan to gain a stronger foothold in the U.S. confectionary market, thought to be valued at $22 billion annually, and which will now see Ferrero become the third-largest confectionary company in the U.S.
Ferrero, which also owns Tic Tac mints and Ferrero Rocher praline products, will add some iconic American brands to their portfolio such as Butterfinger, BabyRuth, and Wonka.
Ferrero stated they, “will continue to operate through the offices in Glendale, California, as well as from its other current locations in Illinois and in New Jersey.”
