Analysts believe Ferrero would be “third largest player” in US chocolate if Nestle candy business acquired

Should Ferrero successfully acquire Nestle’s US candy business, which – at time of writing – is expected to be completed before the 21st January, they would become the ‘third largest player in chocolate confectionery in the US’, according to Euromonitor.

Currently, Ferrero is the fifth largest chocolate brand in the US, however their market share is only around 3% – which is significantly less than the 7.9% Nestle are at, the 9.3% position Lindt & Sprungli have got themselves into, and way behind Mars and Hershey, who have a 27.1% and 31.5% share in the market respectively.

Raphael Moreau, Euromonitor’s senior food and nutrition analyst, believes that Nestle have kept pace with their rivals over time, however they are very dependant on America.

“Nestlé has performed in line with its rivals over the years with a CAGR of 3.5% in overall packaged food,” Moreau said. “Yet, for confectionery, it relies heavily on the US, representing 15% of the company’s sales in 2016.”

However, Moreau added that “in this market (US), Nestlé in fact suffered from disappointing sales in 2016, impacted by the competitive environment and low growth in the mainstream chocolate market.”

Moreau also is of the belief that Ferrero is much more competitive than Hershey, as well as other private equity firms, when it comes to the Nestle deal.

“It is likely that Ferrero would be willing to pay a higher price premium in order to achieve its strategic goal of boosting its presence in the US,” Moreau explained.

Ferrero have established themselves as a chocolate giant, and own brands such as Nutella, Tic Tac fresh mints, and Ferrero Rocher, have made a host of acquisitions over the past two years in order to make the Italian brand a lot stronger in the US.

In 2016, Delacre biscuits were obtained from Yildiz Holding, while 2017 saw Ferrero purchase Chicago-native premium chocolate brand Fannie May as well as gummy maker Ferrara.

Subscribe to our newsletter

Don't miss new updates on your email
Scroll to Top