Ferrero SpA, the maker of Nutella, is setting its sights on the US chocolate market by expanding its Kinder brand. Catherine Bertrac, the senior vice president in charge of the brand in North America, stated that they have already increased Kinder sales in the US to over $500 million in the past five years and now, they aim to turn it into a $1 billion business. The Italian candy maker has noticed a shift in consumer trends in the US with the demand for chocolate still strong, despite rising inflation.
Bertrac emphasises that the new generation of consumers’ expectations are different as they seek a different experience and quality. Ferrero is focusing on bringing a different kind of chocolate to the US market, which consists of a creamy milky centre, is smooth and tender and melts in the mouth unlike Hershey’s chocolate. Ferrero is already selling its Kinder Joy, Kinder Bueno and Kinder Seasonal lines in the US and plans to launch Kinder Chocolate in August.
To support Ferrero’s US growth, the company is expanding its manufacturing facility in Bloomington, Illinois, and launching a new innovation centre in Chicago. However, Ferrero faces challenges with increasing commodity costs and the threat of an El Nino weather pattern, which could disrupt sugar and cocoa supplies, potentially squeezing margins for chocolate makers.
Despite these challenges, Bertrac affirms that the company’s decision to expand its US business will not be impacted by rising inflation. Ferrero is compensating some of the cost increase but not all, and has still managed to keep growing. Bertrac explains that although Ferrero has raised its prices in line with their competitors, they are not passing it all onto the consumers. Therefore, with Ferrero’s strategic plans and a unique offering, the company hopes to increase their share in the US chocolate market.