Innovation

Ferrero, in innovation mode, stays true to power brands’ global appeal

By Kristine Sherred contact

- Last updated on GMT

The Golden Gallery box marks Ferrero's first foray into assorted premium chocolates, or pralines, as the Italian company calls them. Pic: Ferrero Group
The Golden Gallery box marks Ferrero's first foray into assorted premium chocolates, or pralines, as the Italian company calls them. Pic: Ferrero Group

Related tags: Ferrero, Chocolate

We sat down with company leaders sculpting new products and market strategies for three of the Italian confectioner’s iconic names: Ferrero Rocher, Kinder and Tic Tac.

The Sweets and Snacks Expo, sponsored by the National Confectioners Association, packed thousands of brands and hundreds of product launches into three days in Chicago. Not to be outdone by newcomers or fellow established confectioners, Ferrero highlighted two major product innovations and one highly anticipated US launch in an interview with ConfectioneryNews.

‘Synonymous with celebration’

Ferrero entered the US market in 1969 with Tic Tac, waiting until the 1980s to debut its line of hazelnut pralines known as Ferrero Rocher.

As a chocolate brand, Ferrero has long focused on its signature product, Shalini Stansberry, marketing director for Ferrero’s premium chocolate, told ConfectioneryNews, introducing various pack types and sizes. These decisions have helped make it the number-three brand at Valentine’s Day, she said, but “it’s a lot of one type of thing.”

“To be the brand that’s synonymous with celebration,” ​Ferrero decided to reach into the fast-growing segment of assorted chocolate boxes, which account for more than 20% of box sales. Mono-flavored boxes account for 17%, noted Stansberry.

Jumping into this segment of the business was not a snap of the fingers for Ferrero, as plenty of companies like Russell Stover, See’s Candies and Godiva have snagged market share. Consumers have ‘grown up with these tastes,’ admitted Stansberry, “but we also know there are different need-states, budgets and pressures.”​ Sometimes, consumers will splurge for a little something extra, and the Golden Gallery box aims to give shoppers another reason to turn to Ferrero.

“We have the credentials,”​ she added, emphasizing that the variety box is a standalone brand that ‘intentionally omits Rocher.’

In selecting the specific variety of white, milk and dark chocolates – a box of 12 holds six styles, a box of 24 holds eight – Ferrero tested each one with consumers. Ultimately, at least two-thirds of testers approved of the winning flavors.

Ferrero quick facts

Pietro Ferrero established his namesake company in 1942 in Alba, Italy – still home to its global headquarters. Its North American office is located outside of New York City in Parsippany, New Jersey.

In addition to the US, Ferrero’s 3.5% sales growth in 2018 -- about $12.4bn, making the Italian confectioner the world’s second-largest, behind Mars Wrigley – stemmed largely from Germany, France, Italy, Poland and the UK.

Globally, three Kinder products – the Joy, Bueno and Chocolate – lead Ferrero’s growth, alongside Ferrero Rocher and Nutella.

Too many assorted boxes include flavors that few consumers enjoy, said Stansberry, referencing company data that affirmed people’s penchant for sticking their thumb into the bottom of a chocolate to determine what’s inside – before eating it.

“We want to be the antithesis of that.We want to ensure that we’re striking that balance, and make sure no one is disappointed.”

Golden Gallery will stand as the master brand for what will become a line of premium assorted chocolate boxes, ideal for gifting.

‘Can I have a Tic Tac?’

“This is our big bet for this year,”​ Felipe Riera Michelotti, Tic Tac’s VP in North America, told ConfectioneryNews. “It’s beyond where we usually play.”

The brand celebrates its 50th​ anniversary of its US launch this year, and it hopes the larger, more potent mint will compete with Ice Breakers, the category leader. “We didn’t fight for that consumer,” ​said Riera, referring to those who prefer a stronger mint flavor, offered by the likes of Ice Breakers and Altoids, for example.

FerreroRocher-GettyImages-136105279_Lionel Ng
Ferrero Rocher has become an esteemed brand in part through clever marketing campaigns, such as this life-sized tree of candies on display at Christmastime in Singapore. Pic: Getty Images/Lionel Ng

Tic Tac accounts for about 20% of US sales, but the curved mini-mint has unparalleled brand recognition: eight in 10 consumers recognize Tic Tac based solely on the rectangular box, without the label. They also instantly catch the ‘iconic rattle,’ added Riera. He pointed to the brand’s wildly successful marketing campaigns that have etched into the minds of consumers the tagline, “Can I have a Tic Tac?”

The texture of the X-Freeze matches that of the original, though the mint itself is 50% larger and features ‘cooling crystals’ inside. In September, Ferrero will introduce the new ‘strong mints’ in its signature Fresh Mint flavor as well as Spearmint.

Riera, who also spearheads new category development in sugar confectionery for Ferrero in the Americas, told this site that Fresh Mint is the brand’s number-one flavor, followed by Orange – its second-ever flavor – and then its fruit varieties. “Flavor innovation will always be part of what Tic Tac is,”​ he said, noting that the brand’s foray into gum was the first major innovation in a half-century.

“We do look at it in a very sustainable and long-term approach,”​ he said. 

Kinder not just for kids

For a brand with only one SKU in the world’s biggest candy market, Kinder – a $5bn brand globally – has made major waves in the US since debuting its surprise-inside children’s treat, Kinder Joy.

The brand has found success worldwide with the Joy, sold elsewhere since 2001 according to Noah Szporn, VP of marketing for Kinder North America, and of course with its older sister treat, Kinder Surprise. In fact, in warmer months, many retailers switch to selling Joy because the chocolate does not melt around the toy, noted Szporn.

 “The products are designed for children and marketed to mom,” ​he said.

Europeans’ love of the Bueno, which Kinder will launch stateside in November, has made it a top-three chocolate bar, garnering $1bn in sales.

“It’s different from other bars,”​ continued Szporn, emphasizing out the product’s ‘unique delivery format’ of easily breakable pieces. The smaller portion sizes make it ideal for kids, but the hazelnut wafer bar also carries a ‘broader appeal’ to families, he added. Packaged in two-finger or four-finger sizes, each bar comes individually wrapped in clear film: “each bite is a first-taste experience.”

“The big reason why Bueno was next is that we really wanted to lead with our best,” ​he confirmed. “Kinder Joy set the stage for Bueno.”

Ferrero opted to build a strong foundation for the Kinder brand in the US with its most iconic treat, after CEO Lapo Civiletti – who took the reins in September 2017 – laid out an ‘aggressive’ US strategy.

It seems to have paid off: Kinder Joy topped the list of ‘pacesetters’ in IRI’s annual rankings, garnering more than $120m in sales in the first 13 months on the shelf.

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