Global chocolatier and confectioner’s sweet taste of success lingers on in the region
Founded in 1946 as a family business in Alba, in Italy’s Northwest Piedmont region, Ferrero is the third-largest global chocolate-confectionery company, with global sales of over US$ 12bn across over 170 countries and an employee force exceeding 30,000. Nutella, Ferrero Rocher, Raffaello, Tic Tac and the Kinder line are some of the product lines from the Ferrero stable.
Recently it was reported that the Ferrero Group and Al Bustan Al Khaleeji (BK), a leading FMCG food distribution company operating in Kuwait, recently announced a strategic joint venture agreement. The new entity, Fergulf Kuwait General Trading, will see both parties combine forces to directly distribute Ferrero products across the Kuwaiti market.
Designed to consolidate the partnership between both parties, the partnership will see Ferrero apply its unique business approach and expertise to the Kuwaiti market. “I believe this strategic alliance is pivotal to the success of Ferrero Gulf in Kuwait moving forward,” observed Guido Ferralasco, Managing Director, Ferrero Gulf.
LogisticsGulf interviewed Guido Ferralasco on a wide range of subjects ranging from the brand, provenance, presence in the region and the vision for the future
LogisticsGulf.com (LG): How important is the GCC for Ferrero Gulf? What are your expansion plans for the region?
Guido Ferralasco (FG): The GCC is a strategic market in our area and one that we believe is rife with opportunities and, naturally, challenges as well. That is precisely why we forged a strong growth path for the region – one that relies on various pillars.
The creation of JVs with our distributors – first with Al Seer Group in the UAE in October 2018 and more recently with Al Bustan Al Khaleej (BK) in Kuwait – is one of them. Our decision to form these partnerships was guided by a shared history of success with our distributors and a common vision for sustainable future growth. We believe that a direct channel of distribution in key markets will spur rapid business growth.
Innovation is and always has been a main driver of our growth. Over the past five decades, globally, we have created innovative products that have become, over time, true icons of the chocolate confectionery sector. We will continue to focus on innovation globally and regionally where it is set to play a pivotal role in our growth path. This will also enable us to continue to add value to our trade partners by enhancing their offerings to consumers.
Today, our sales performance in the region attests to the quality of our products and our ability to adapt and respond quickly to the demands of different markets. We deeply understand the needs of local consumers and, accordingly, are able to create rich, relevant interactions between them and our respective brands.
Looking ahead, this will continue to be the case. After all, our unwavering focus on people and unyielding dedication to quality are the strands of our company DNA.
LG: What are the top two markets for Ferrero Gulf?
FG: At Ferrero Gulf, all of our markets are important, regardless of their respective size. Each country plays an essential role in contributing to our regional growth numbers.
LG: What among your product range are your top selling brands?
FG: At Ferrero, our sales numbers are not made public. However, I’m proud to share with you that our regional sales are showing steady growth and we keep grabbing more market share, month after month – a trend that shows no sign of stopping. We believe that this is a testament to the fact that our GCC consumers are recognising and appreciating the superior quality and freshness of our products.
LG: How would you characterise your recent partnership with Al Bustan Al Khaleej (BK) in Kuwait?
FG: The creation of our joint venture with BK, titled Fergulf Kuwait General Trading, is the culmination of a longstanding working relationship – one that began decades ago.
Designed to consolidate the partnership between both parties, the strategic agreement enables us to apply our unique business approach and know-how to the Kuwaiti market. This in turn will open up new avenues of growth, which include opportunities for local business expansion and the development of new products or strategies.
LG: What is the mandate for the new JV-entity Fergulf Kuwait General Trading?
FG: As previously mentioned, this joint venture with BK, a longstanding, trusted partner of ours is key to the success of Ferrero Gulf in Kuwait moving forward. We are confident that, together, by ensuring a direct channel of distribution, we can take the business to new heights.
LG: Are there any more JVs in the cards for the region?
FG: The formation of JVs was and still is a major part of our ambition to accelerate our growth trajectory in the region and solidify our competitive position.
LG: How does the Gulf region compare and contrast with other geographies in terms of consumption patterns? Can you describe the typical Ferrero customer profile in the region?
FG: At Ferrero, we have a strong understanding of local consumers’ needs. GCC consumers are discerning in their choices and make informed purchasing decisions dictated by key factors such as superior quality standards, a powerful emotional connection and a strong need for uniqueness. The typical Ferrero customer’s requirements fit that very profile. He or she is unwilling to settle for a simply satisfactory product. They demand the highest level of quality and freshness as well as an integrated brand experience that resonates with them emotionally.
LG: What are the opportunities and threats for Ferrero Gulf in the region? What are the challenges for Ferrero Gulf from indigenous, home-grown chocolate-confectionery brands?
FG: We set up a regional business unit for Ferrero in Dubai four years ago and since then have established a full-fledged operation tasked to control a number of key markets and retail sales in excess of US$ 500 million. We have also grown from an organisation of 12 to 120.
We have managed to do this by tapping into new growth opportunities that are aligned with the fundamentals of our winning formula: a steadfast commitment to delivering fresh, high-quality products, strategic partnerships, innovation-driven growth, and an agile, consumer-focused approach to an ever-evolving market.
In terms of challenges and threats, at Ferrero, we believe that our competitive advantage will always remain our ability to provide consumers with relevant brand experiences and high-quality, iconic products that meet their needs.
LG: Any further mergers and acquisitions on the cards?
FG: Again, on a regional front, we believe that the formation of JVs will continue to help us bring to life our vision for the future.
In terms of acquisitions, just recently, in April 2019, it was announced that Ferrero is set to acquire the cookie, fruit and fruit-flavored snack, ice cream cone and pie crust businesses from Kellogg Company for US$ 1.3 billion. With this move, Ferrero will acquire a strong portfolio of beloved brands in the cookie category, including the iconic cookie brand Keebler®, top selling on-the-go Famous Amos® cookies, the premium family cookie brand Mother’s®, and Murray® sugar free cookies, as well as Little Brownie Bakers®, supplier of cookies to the Girl Scouts.
Ferrero will also acquire the Kellogg fruit snacks business, including Stretch Island® and Fruity Snacks along with Keebler’s® ice cream cones and pie crust products.
The fact is, from a global standpoint, since 2017, Ferrero has acquired several US brands and businesses including the Fannie May Confections Brands, the Ferrara Candy Company and the U.S. confectionary business from Nestlé.
Now, with this most recent Kellogg Company transaction, Ferrero will enter into new strategic product categories and will further strengthen its position in the North American market.
LG: Ferrero is a closely held private company. Any move in the foreseeable future for Ferrero to go public?
FG: Today, Ferrero remains a private, family-owned company and there are no plans to go public.
Personal Bio
Guido Ferralasco is the Managing Director, Ferrero Gulf, a position he has held since the inception of the regional business in May 2015.
His educational accomplishments include the completion of the Advanced Executive Programme at Kellogg School of Management in 2007, and an MBA from Erasmus University, Rotterdam.
Currently based in the UAE, he is responsible for effectively managing Ferrero’s business unit in the region that currently employs around 120 staff.
Ferralasco has established streamlined processes and tools to ensure alignment across all core areas of the business under one overarching commercial strategy. Over the years, he has amassed extensive expertise shaping winning business development strategies, devising comprehensive risk mitigation plans and helping ensure the sustainable growth of Ferrero businesses globally.
He also serves on the board of several start-ups including Easyfeel and SkuolaNet.
