Latest news with #Giovanni Ferrero
Reuters
15-07-2025
- Business
- Reuters
Ferrero poised to revive WK Kellogg sales for health-conscious Americans
July 15 (Reuters) - Nutella spread maker Ferrero, armed with experience in health-regulated European markets and a track record of revamping struggling brands like Keebler cookies, has a good chance of reviving WK Kellogg's (KLG.N), opens new tab legacy cereal brands with its $3.1 billion take-private deal announced last week. Ferrero, which makes sugary treats like Kinder chocolate eggs, Ferrero Rocher, and Tic Tac, has pursued an aggressive global expansion to boost revenue and diversify its portfolio beyond sweets into snacks, baked goods, and now breakfast cereals. Under Chairman Giovanni Ferrero, the company has invested heavily in product innovation, reformulation and packaging redesign to turn around some challenged brands it previously acquired such as Keebler from Kellogg. Meanwhile, demand has fallen for products made by WK Kellogg (KLG.N), opens new tab, whose cereals include Special K, Corn Flakes and sweetened offerings such as Froot Loops, Honey Smacks and Frosted Flakes. Consumers have traded down from its pricier cereals even as Kellogg has come under scrutiny for using artificial food dyes. "Ferrero's creativity can help jump-start sales in a sleepy (albeit higher margin) category," said Hank Cardello, executive-in-residence at the Business for Impact center at Georgetown's McDonough School of Business. Ferrero's expertise in cookies and confectionery could help create distinct new versions of cereal products, he added. Ferrero could reinvigorate WK Kellogg's portfolio which also contains healthier options such as Special K and Raisin Bran, touted for their high fiber content, as well as nutrient-rich cereals, granola and waffles under its Kashi brand. "I expect that (Ferrero) will preserve Kellogg brand recognition without too much dilution while also marketing a healthier and more consumer-friendly and appealing product line," Amrita Bhasin, CEO of logistics food and beverage company Sotira, said. In 2018, Ferrero bought Nestle's confectionery business for $2.8 billion, adding brands such as candy bars Butterfinger, Baby Ruth, and 100 Grand to its portfolio. In just a few years, Ferrero relaunched Butterfinger with higher-quality ingredients including peanuts, cocoa and milk and revamped packaging. The steps helped grow demand for the salted caramel bars. In 2019, Ferrero made a $1.3 billion acquisition of Kellogg's cookies, snacks and ice cream business. The Italian company revitalized these products by investing in new packaging and more marketing. In 2023, it also bought Fresystem Group and used the acquisition to grow its frozen food business and launch Nutella muffins and other baked goods. Ferrero declined to comment on the strategy for WK Kellogg. In April, WK Kellogg said, opens new tab it was reformulating its cereals served in schools to not include artificial dyes. Other packaged food makers such as PepsiCo (PEP.O), opens new tab, Kraft Heinz (KHC.O), opens new tab and Hershey (HSY.N), opens new tab have also started working to remove synthetic food dyes from their products, under pressure from U.S. Health Secretary Robert F. Kennedy Jr.'s Make America Healthy Again, or MAHA campaign. Analysts and industry experts noted that Ferrero has spent decades dealing with European regulators that have pushed back on additives, coloring and sugar. This could give the confectionery giant an edge dealing with Kennedy's MAHA campaign, they said. "Ferrero has been a pioneer in marketing smaller portions, which would fit in well with MAHA," Cardello said. For instance, as a founding member of the Always a Treat initiative in 2017, Ferrero committed to ensuring that half of its single-serve packs contain 200 calories or less to help consumers manage their sugar intake. As a private family-owned company, Ferrero is insulated from the pressures of quarterly earnings, giving it more flexibility to invest in long-term brand building and product innovation. Analysts said this could be critical in reshaping WK Kellogg's product lineup over the next few years. Still, MAHA could boost costs for Ferrero as it makes its expansion push in North America. "Ferrero will have to grapple with MAHA requirements across the company, not just in cereal, since much of its business is based on candy and sugary snack foods," said Sky Canaves, an analyst with market research firm Emarketer.
Yahoo
15-07-2025
- Business
- Yahoo
Analysis-Ferrero poised to revive WK Kellogg sales for health-conscious Americans
By Savyata Mishra (Reuters) - Nutella spread maker Ferrero, armed with experience in health-regulated European markets and a track record of revamping struggling brands like Keebler cookies, has a good chance of reviving WK Kellogg's legacy cereal brands with its $3.1 billion take-private deal announced last week. Ferrero, which makes sugary treats like Kinder chocolate eggs, Ferrero Rocher, and Tic Tac, has pursued an aggressive global expansion to boost revenue and diversify its portfolio beyond sweets into snacks, baked goods, and now breakfast cereals. Under Chairman Giovanni Ferrero, the company has invested heavily in product innovation, reformulation and packaging redesign to turn around some challenged brands it previously acquired such as Keebler from Kellogg. Meanwhile, demand has fallen for products made by WK Kellogg, whose cereals include Special K, Corn Flakes and sweetened offerings such as Froot Loops, Honey Smacks and Frosted Flakes. Consumers have traded down from its pricier cereals even as Kellogg has come under scrutiny for using artificial food dyes. "Ferrero's creativity can help jump-start sales in a sleepy (albeit higher margin) category," said Hank Cardello, executive-in-residence at the Business for Impact center at Georgetown's McDonough School of Business. Ferrero's expertise in cookies and confectionery could help create distinct new versions of cereal products, he added. Ferrero could reinvigorate WK Kellogg's portfolio which also contains healthier options such as Special K and Raisin Bran, touted for their high fiber content, as well as nutrient-rich cereals, granola and waffles under its Kashi brand. "I expect that (Ferrero) will preserve Kellogg brand recognition without too much dilution while also marketing a healthier and more consumer-friendly and appealing product line," Amrita Bhasin, CEO of logistics food and beverage company Sotira, said. In 2018, Ferrero bought Nestle's confectionery business for $2.8 billion, adding brands such as candy bars Butterfinger, Baby Ruth, and 100 Grand to its portfolio. In just a few years, Ferrero relaunched Butterfinger with higher-quality ingredients including peanuts, cocoa and milk and revamped packaging. The steps helped grow demand for the salted caramel bars. In 2019, Ferrero made a $1.3 billion acquisition of Kellogg's cookies, snacks and ice cream business. The Italian company revitalized these products by investing in new packaging and more marketing. In 2023, it also bought Fresystem Group and used the acquisition to grow its frozen food business and launch Nutella muffins and other baked goods. Ferrero declined to comment on the strategy for WK Kellogg. In April, WK Kellogg said it was reformulating its cereals served in schools to not include artificial dyes. Other packaged food makers such as PepsiCo, Kraft Heinz and Hershey have also started working to remove synthetic food dyes from their products, under pressure from U.S. Health Secretary Robert F. Kennedy Jr.'s Make America Healthy Again, or MAHA campaign. Analysts and industry experts noted that Ferrero has spent decades dealing with European regulators that have pushed back on additives, coloring and sugar. This could give the confectionery giant an edge dealing with Kennedy's MAHA campaign, they said. "Ferrero has been a pioneer in marketing smaller portions, which would fit in well with MAHA," Cardello said. For instance, as a founding member of the Always a Treat initiative in 2017, Ferrero committed to ensuring that half of its single-serve packs contain 200 calories or less to help consumers manage their sugar intake. As a private family-owned company, Ferrero is insulated from the pressures of quarterly earnings, giving it more flexibility to invest in long-term brand building and product innovation. Analysts said this could be critical in reshaping WK Kellogg's product lineup over the next few years. Still, MAHA could boost costs for Ferrero as it makes its expansion push in North America. "Ferrero will have to grapple with MAHA requirements across the company, not just in cereal, since much of its business is based on candy and sugary snack foods," said Sky Canaves, an analyst with market research firm Emarketer.
Yahoo
10-07-2025
- Business
- Yahoo
Ferrero Buys WK Kellogg (KLG) for $3.1 Billion in Push Beyond Chocolate
Ferrero has agreed to acquire WK Kellogg (KLG, Financials) for $3.1 billion, marking the Italian confectionery giant's largest deal in years and signaling its serious move into the U.S. breakfast aisle. The $23-per-share offer represents a 31% premium; shares of WK Kellogg jumped more than 30% to $22.85 on Thursday. The deal, expected to close in the second half of 2025, will bring Froot Loops, Frosted Flakes, and Special K under the same roof as Nutella, Tic Tac, and Kinder. The acquisition gives Ferrero instant scale in the U.S. grocery market and much-needed diversification; cocoa prices hit record highs last year, pressuring chocolate-heavy brands. Ferrero, led by executive chairman Giovanni Ferrero, has been on an acquisition spree; it bought Nestle's U.S. candy unit in 2018 for $2.8 billion. The company generated 18.4 billion ($19.2 billion) in revenue last year and continues to invest heavily in manufacturing and product expansion. Michael Ashley Schulman of Running Point Capital Advisors said the deal offers Ferrero U.S. shelf space and an iconic brand portfolio at a relatively good price. Kellogg's spin-off Kellanova, formed alongside WK Kellogg in a 2023 split, is also in play; Mars is reportedly close to acquiring it in a separate $36 billion deal. This article first appeared on GuruFocus.
France 24
10-07-2025
- Business
- France 24
Snap, crackle and pay: Ferrero to buy WK Kellogg for $3.1 bn
Ferrero, whose products include Nutella chocolate spread and Ferrero Rocher chocolate treats, will pay $23 per share in cash for WK Kellogg, which is known for Rice Krispies and Kellogg's Frosted Flakes, among other offerings. The transaction is expected to close in the second half of 2025, said a joint press release. On completion of the transaction, WK Kellogg will be a wholly owned subsidiary of Ferrero. The pricing of Kellogg represents a 31 percent premium to the company's closing price on Wednesday. Ferrero Chief Executive Giovanni Ferrero described the merger as "the coming together of two companies" with "generations of loyal consumers." "Over recent years, Ferrero has expanded its presence in North America," said Giovanni Ferrero. "Today's news is a key milestone in that journey, giving us confidence in the opportunities ahead." Ferrero, whose origins stem from its founding in Alba, Italy in 1946, has struck a number of deals in recent years to expand in North America, including the 2018 purchase of Nestle's US confectionary business for $2.8 billion in cash. Prior to the Kellogg deal, Ferrero had more than 14,000 employes across 22 plants and 11 offices in North America, according to the press release. Its US brands include Keebler, Famous Amos and Tic Tac. WK Kellogg is the cereal arm of Michigan-based Kellogg, which split itself up a couple of years ago, with its Kellanova snack brand being sold to Mars in August 2024 for around $36 billion. "We believe this proposed transaction maximizes value for our share owners and enables WK Kellogg Co to write the next chapter of our company's storied legacy," said Gary Pilnick, chief executive of WK Kellogg. "Joining Ferrero will provide WK Kellogg Co with greater resources and more flexibility to grow our iconic brands in this competitive and dynamic market." Kellogg dates its origins to 1894 when founder WK Kellogg invented the Corn Flakes cereal, the first of a series of offerings that later expanded to Raisin Bran and Froot Loops. Shares of WK Kellogg surged 30.9 percent in mid-morning trading.
Yahoo
10-07-2025
- Business
- Yahoo
Ferrero Nears $3 Billion Deal for WK Kellogg
(Bloomberg) -- Ferrero International SA, the Italian family-owned company known for its signature gold foil-wrapped chocolates, is close to acquiring cereal producer WK Kellogg Co. for about $3 billion, according to people with knowledge of the matter. Singer Akon's Failed Futuristic City in Senegal Ends Up a $1 Billion Resort Are Tourists Ruining Europe? How Locals Are Pushing Back Can Americans Just Stop Building New Highways? Denver City Hall Takes a Page From NASA Philadelphia Trash Piles Up as Garbage Workers' Strike Drags On Talks are advanced and a deal could be announced this week, the people said, asking not to be identified discussing private information. A takeover would combine the maker of chocolate nut spread Nutella with the company behind Froot Loops and Frosted Flakes cereals and further cement Ferrero's moves to carve out an empire of comfort foods and expand its presence in North America. Controlled by the low-profile billionaire Giovanni Ferrero, the confectionery company has been on an acquisition spree in recent years targeting brands often in the cross-hairs of health regulators and changing consumer trends. Within the last decade, Ferrero has bought Fannie May chocolates, which boosted its manufacturing capabilities and presence in the premium chocolate market in the US. It also snapped up rival Nestle SA's US confectionery arm, gaining well-known brands like Butterfinger and Baby Ruth, and Iowa-based Wells Enterprises, the maker of Bomb Pops and Blue Bunny ice cream. The latest move by Ferrero, which reported a near 9% jump in sales to €18.4 billion last year, sounds 'credible' given the company's multiyear strategy to expand its US presence, according to Robert Moskow, an analyst at TD Cowen. Shares in Kellogg rose as much as 57% in premarket trading on Thursday, after the Wall Street Journal reported Wednesday that the two companies are nearing a deal, building on previous speculation of takeover interest. The stock had declined 2.7% this year through Wednesday's close, valuing the company at $1.51 billion. Representatives for Ferrero and Kellogg didn't immediately respond to requests for comment. A takeover could boost a business that's been struggling to grow since Kellogg Co. was split in two, with the snacking business rebranded Kellanova and the cereal brands under WK Kellogg. In May, Kellogg cut its annual sales guidance with Chief Executive Officer Gary Pilnick calling out a 'challenging operating environment,' as consumers move away from sugary foods and gravitate toward cheaper private-label cereal options. Kellanova, the owner of Pringles and Cheez-It, has already been sold on to another family-owned company, Mars Inc., for nearly $36 billion including debt. Consolidation among consumer goods companies has been a trend for some time as businesses have grappled with inflation and surging commodity costs. More recently, US President Donald Trump's tariff war has created further headaches for companies that often operate on slim margins. Ferrero, which also makes Kinder Bueno chocolates and Tic Tac mints, traces it fortune back to a pastry shop in Italy owned by Giovanni's grandparents, Piera and Pietro, who used hazelnuts to stretch limited cocoa supplies. It was under Michele, Giovanni's father, that the business grew into a global powerhouse starting in the 1950s. Ferrero has been making efforts to diversify both its products and geographic spread, in part to help it manage surging cocoa prices. It is also demonstrating that it can build on and expand different brands it purchased, recently working with Wells Enterprises to launch new ice-cream bars that feature the confectionery brands it acquired from Nestle. The company is not only focused on sugary treats but has also bought healthy snack businesses like Eat Natural, a British manufacturer of cereal bars and granola, and FULFIL Nutrition, a vitamin and protein bar maker. The recent launch of FULFIL energy bars into the Italian market is a prime example of how Ferrero successfully expands existing brands, according to Sebastiano Grandi, management and marketing professor at Università del Sacro Cuore in Piacenza. Ferrero's 'rational and modern approach' looks for brands which are underused and relaunches them while'ensuring they remain authentic category leaders at the same time,' Grandi said. --With assistance from Daniele Lepido, Deirdre Hipwell, Alberto Brambilla and Subrat Patnaik. (Updates with premarket shares, adds further analyst comment and context.) Will Trade War Make South India the Next Manufacturing Hub? 'Our Goal Is to Get Their Money': Inside a Firm Charged With Scamming Writers for Millions Pistachios Are Everywhere Right Now, Not Just in Dubai Chocolate 'Telecom Is the New Tequila': Behind the Celebrity Wireless Boom SNAP Cuts in Big Tax Bill Will Hit a Lot of Trump Voters Too ©2025 Bloomberg L.P. Sign in to access your portfolio
