NCA State of the Industry Conference 2018

Ferrero yet to determine Nestlé US confections’ position

By Douglas Yu contact

- Last updated on GMT

Nestlé agreed to sell its US candy business to Ferrero for $2.8bn In January.  Photo: Dzenina Lukac
Nestlé agreed to sell its US candy business to Ferrero for $2.8bn In January. Photo: Dzenina Lukac

Related tags: Nestle, Ferrero, Us

Ferrero says it is still figuring out how to run the Nestlé’s US confectionery business under its portfolio.

The Nutella maker announced the $2.8bn deal​ earlier this year, which includes Butterfinger, Baby Ruth and Raisinets. Yet, the acquisition completion date is yet to be determined

Speaking at the recent NCA State of the Industry Conference in Miami, Carlos Velasco, president of confections and global foods division of Nestlé USA, said: “We don’t know when that is going to be finalized because we are right now in the government approval process.

“We’re hoping it’ll be done by April [2018], and by that time, my responsibilities at the NCA will be terminated. I’ll no longer be part of NCA’s board.”

For now, Velasco remains a member of the NCA’s board of trustees, and he said Nestlé US is still part of the association, which contradicts an earlier report that says the company already left the NCA​ by the end of 2017.

Sources who declined to be identified said Ferrero headquarters had never thought about acquiring other brands before the recently appointed Lapo Civiletti took the helm of the company. Civiletti is said to be Ferrero’s first non-family leader.

“It’s never been part of [Ferrero’s] growth strategies, but I guess they now want to grow the business quickly in America,”​ one source said.

Velasco told ConfectioneryNews Nestlé’s divestment of its US candy business is “very good”​ to the industry.

“Ferrero is really going to consolidate and grow its business here in the United States with the acquisition of Ferrara and the Nestlé brands,”​ he said. “They are going to be an important player after Mars and Hershey.”

Velasco also shared a positive outlook for Nestlé’s US candy business and he believes the resources Ferrero would provide are valuable.

Peeps maker ‘not surprised at all’ at the acquisition

Hershey, Leaf Brands, and Peeps maker Just Born were among the bidders for Nestlé's US confectionery arm. Just Born said it was interested in buying some brands​ from Nestlé to create a stronger theatre box company.

As Ferrero secured the entire unit , Just Born’s senior VP of sales and marketing Matt Pye said: “I’m not surprised at all… Nestlé wanted to sell the whole thing. We’re a mid-size, family-owned candy company, we could never absorb the whole thing.”

“There were brands that I individually and other companies were looking at,”​ he added. “[Ferrero] is absorbing it, and let’s see where it goes.”

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