Italy’s richest family wants to conquer America’s breakfast tables

By Flavia Rotondi and Chiara AlbaneseBloomberg

The final time a Kellogg’s cereal model ran a Tremendous Bowl business, Barack Obama had simply turn into president and Donald Trump was nonetheless a actuality TV star.

So much has modified in 17 years – not least at Kellogg’s. On February 8, it returns to the Large Recreation with a Raisin Bran advert, endorsed by the corporate’s new proprietor: Italy’s Ferrero Group, the family-run maker of Nutella that launched WK Kellogg Co. final yr. purchased.

People can count on extra from Ferrero, an organization greatest identified for its signature cocoa-hazelnut unfold, at the same time as its portfolio has expanded to incorporate American manufacturers like Butterfinger, BabyRuth and Keebler cookies.

Low-profile billionaire Giovanni Ferrero has led Italy’s richest household because the dying of his father Michele in 2015, who popularized Nutella and turned Ferrero – which began as a pastry store within the nation’s northwest – into one in all Europe’s largest sweet makers.

Giovanni, 61, has prioritized U.S. acquisitions in a decade-long enlargement drive that has doubled gross sales and made Ferrero the world’s third-largest maker of candy packaged meals. The corporate spoke to Bloomberg Information about its U.S. technique, capped by the $3.1 billion WK Kellogg deal.

Grain “has a penetration of greater than 90% in American households. Are you able to think about how vital it’s for a shopper items firm to be current at the moment?” Monetary director Daniel Martinez Carretero stated this in an interview. “Kellogg’s offers us the door to come back in.”

Having fiber-rich raisin bran, together with cereals like corn flakes and rice krispies, strengthens Ferrero’s presence on the breakfast desk of American shoppers searching for more healthy meals selections. Though Kellogg’s additionally makes Froot Loops and Frosted Flakes, the deal helps diversify a lineup dominated by sweet, cookies and ice cream, treats which are even much less aligned with wellness tendencies.

Ferrero sees nice alternatives for cross-pollination – between European and American manufacturers, throughout all meals classes, and by leveraging its rising American manufacturing footprint. After shopping for Wells Enterprises, the maker of Bomb Pop and low-calorie Halo High ice cream, three years in the past, Ferrero has spent almost half a billion {dollars} renovating a manufacturing facility in upstate New York the place it now produces Nutella and Kinder model ice lotions.

U.S. shoppers can count on “loads of innovation” from Ferrero’s ice cream and cookie companies within the coming years, Martinez Carretero stated.

Advertising is one other lever to tug: Ferrero’s Kinder Bueno chocolate bars will make their Tremendous Bowl promoting debut on Sunday, selling the European sweet to a big American TV viewers.

One high-profile transfer is the upcoming launch of Nutella Peanut, a variation on the unfold on the coronary heart of Ferrero’s 80-year-old origin story. To create a model particularly tailor-made to American tastes, Ferrero added peanuts to the unique cocoa and hazelnut mix, borrowing peanut experience from its Butterfinger model (acquired from Nestle SA’s US confectionery enterprise in 2018). Nutella Peanut will likely be obtainable in American supermarkets within the spring.

“The purpose is to create a product that turns into a staple in North American households,” stated Thomas Chatenier, International President of Nutella, in a separate interview. “One thing you possibly can count on on each kitchen shelf within the area.”

Ferrero has no plans to cease there. For now, the corporate is targeted on integrating the operations of WK Kellogg and Wells. Martinez Carretero stated Ferrero “has capabilities in most classes,” together with ice cream, cookies and “Higher for You” merchandise akin to Energy Crunch protein snacks, which it acquired final yr. Going ahead, the corporate will take into account extra potential mergers and acquisitions, he stated.

Ferrero stated Friday that gross sales for the fiscal yr ending in August rose 4.6% to €19.3 billion ($22.8 billion). In keeping with regulatory information, internet revenue was €703.9 million, up from €1.15 billion in fiscal 2024.

The 2025 figures exclude Kellogg’s, which was acquired in September after the top of the fiscal yr. The standalone grain firm generated $2.7 billion in income in 2024, the final yr reported.

The US has turn into extra outstanding for Ferrero within the decade since govt chairman Giovanni, the grandson of co-founder Pietro Ferrero, sought to cut back the corporate’s dependence on mature markets akin to Europe.

Giovanni Ferrero and his household have a internet value of almost $58 billion, in line with the Bloomberg Billionaires Index. Based as a confectionery in 1946 by two brothers within the city of Alba, the corporate now stands alone behind Cadbury’s proprietor Mondelez Worldwide Inc. and M&M’s maker Mars Inc. within the €630 billion candy packaged meals class, together with cookies, ice cream, sweet and desserts, Ferrero stated, citing analysis from GlobalData.

Fannie Could goodies and Ferrara Sweet’s gummies had been added in 2017, adopted by the Nestle US confections unit and Kellogg Co’s cookie manufacturers. akin to Keebler and Well-known Amos. In 2022, the US, Canada and the Caribbean accounted for 18% of Ferrero’s income, rising to 24% in fiscal 2025.

Kellanova, the previous snack firm of Kellogg Co. which incorporates Pringles and Pop-Tarts, was spun off from cereal in 2023 and acquired individually by Mars final yr.

Like different international meals corporations, Ferrero has been working to localize operations, with places of work and manufacturing in additional than 50 international locations. This has considerably insulated it from President Trump’s tariffs, however not fully.

“With the brand new administration we’ve seen some volatility, and an instance of that is the tariffs,” Martinez Carretero stated. “Our agenda has not modified.”

Ferrero, which has about $6.5 billion in debt, has constructed up its U.S. enterprise at a time when rivals and shoppers have retreated from sugary meals. These tendencies are solely growing due to in style anti-obesity drugs and Make America Wholesome Once more initiatives, akin to phasing out some meals dyes.

The Italian firm inherits a Kellogg’s enterprise with declining gross sales, going through fierce competitors, fluctuating commodity costs and an unsure geopolitical atmosphere, Morningstar analyst Erin Lash stated.

As an unbiased contractor, WK Kellogg had much less bargaining energy with retailers than Basic Mills Inc. and Submit Holdings Inc., she added.

“The corporate’s greatest threat is the abundance of nutritious and handy breakfast alternate options competing for a share of the shelf and abdomen,” says Lash. “We do not suppose these aggressive pressures are prone to diminish even after years of consuming away on the cereal class.”

The selection of Raisin Bran for the Tremendous Bowl advert (as a substitute of Frosted Flakes, promoted in 2009) is an indication of the corporate’s response to altering shopper well being issues. Star Trek actor William Shatner, 94, drops by followers to present irreverent message of assist to Raisin Bran to battle ‘America’s Fiber Hole’.

Kellogg’s has taken different steps to handle People’ well being craze. Particular Okay now has a no-sugar-added model, and the corporate has promised to take away sure dyes from its merchandise.

Ferrero’s second spot throughout Sunday’s recreation between the New England Patriots and Seattle Seahawks will promote Kinder Bueno, its hazelnut-filled chocolate bars. They’re in style in Italy, however not but within the US.

Kinder Bueno is available in small, individually wrapped parts – one thing the corporate sees as splendid for individuals attempting to restrict their calorie consumption.

Regardless of the headwinds, Ferrero has some respiration room, stated Kevin Ryan, CEO of retail marketing consultant Malachite Technique & Analysis. The corporate has a historical past of shopping for uncared for manufacturers in steady industries, and of investing in advertising and marketing in addition to bettering high quality, he stated.

The personal possession offers the corporate “an prolonged timeline” to place Kellogg’s cereals as premium merchandise whereas additionally specializing in protein snacks, Ryan stated.

“They will wait. They’ve a historical past of ready,” he stated. “Kellogg by no means did that.”