Posted 05-24-18
Ferrara Candy C.E.O. - ‘We’re unapologetically and exclusively focused on the confection space’

Ferrara Candy c.e.o.: ‘We’re unapologetically and exclusively focused on the confection space’


By Monica Watrous

CHICAGO — The “crispety, crunchety, peanut buttery” Butterfinger chocolate bar may look and taste a little different by the end of the year. It’s the first of Nestle’s former candy brands to be revamped under new ownership.

Nestle’s confectionery business is now led by Ferrara Candy Co., the manufacturer of Brach’s, RedHots, Trolli, Black Forest and Sathers candy brands. This past December, Ferrara Candy Co. was acquired by The Ferrero Group, the Luxembourg-based company behind Nutella, Tic Tac and Kinder products. A few months later, The Ferrero Group purchased Nestle USA’s confectionery business in a transaction valued at approximately $2.8 billion.

Today, Ferrara Candy Co., which operates as a standalone unit at its Oakbrook Terrace, Ill., headquarters, manages Nestle USA’s three confectionery manufacturing plants in Illinois. The deal adds more than 20 brands, including Butterfinger, Baby Ruth, Crunch, SweeTarts, LaffyTaffy and Nerds, to Ferrara Candy Co.'s portfolio.

“This is a broad, diverse portfolio of iconic brands we believe fundamentally will respond to innovation, respond to baseline quality, respond to investments,” said Todd Siwak, chief executive officer of Ferrara Candy Co. “We’ve had success on the Ferrara side engaging in that same playbook, and it has worked very well for us. We were one of the leaders in non-chocolate before the acquisition, driving a significant amount of the growth in the category.”

During the Sweets & Snacks Expo, held May 22-24 in Chicago, Mr. Siwak shared insights and plans for the business in an exclusive interview.

Food Business News: What are your plans for the Nestle confectionery business?

Mr. Siwak: Our focus is, starting with Butterfinger, how do we think about baseline — the quality, improving the consistency, improving the ingredients, ensuring we’re delivering against all expectations relative to the base consumer but also broadening the appeal and reach of that.

Think about chocolate with peanut butter and the importance of that category. We’ve gone through a complete renovation of that, including introducing supply chain integrity, vertical sourcing, roasting our own peanuts, just ensuring thorough, thoughtful freshness throughout. We’re going to cue the consumer with new packaging, not only to lock in freshness but also to share the graphics and the crispety, crunchety, peanut buttery focus that we have. That will be launching at the end of this year, beginning of next, supported by a new wave of marketing, which will be the largest in the history of that brand.

The right focus, the right product, and the right type of partnership, we believe, with retailers to ensure we’re reaching the consumer. We’re going to replicate that with Crunch, SweeTarts, LaffyTaffy, Nerds … think about the entire Nestle portfolio, but equally as exciting, just ensuring holistically that Trolli, Black Forest and Brach’s that historically resided in the Ferrara portfolio are also provided with the same type of support.

We’re going to combine that portfolio with a best-in-class team and new capabilities that our new scale will provide us the opportunity to share with our retail partners. And from our perspective, scale in and of itself is not sufficient. It has to coincide with capabilities that differentiate us with our customers and allow us to grow their businesses incrementally.

That’s the focus from our perspective.

We’re the beneficiary of the support of the Ferrero ecosystem. It’s a closely held family business. Great stewards of the business and brands. Long-term focus on building brands, building relationships with the customer and with the consumer. And that’s what we intend to continue to focus on.

What does the new partnership with The Ferrero Group look like?

Mr. Siwak: It’s a tight collaboration and what I would define as a very strong partnership. They’re experts. They’ve been in the confection business for 70 years. … And so they possess, from my perspective, a paradigm that is perfectly suited to nurture and build a portfolio like this. Alignment is intuitive because when we do right by the brands, I think we’re basically adhering to the ethos that they so strongly represent.

With so many distinct, iconic brands now in your portfolio, what is your strategy for managing and supporting them for sustainable growth?

Mr. Siwak: We have a family of 35 brands, plus or minus. What’s important from our perspective is that we thoughtfully segment the portfolio, understanding a couple things. One, which brands we want to position to continue to lead and drive the segments or categories they reside in, and how do we think about allocating resources to those brands to maintain or even accelerate the rate of growth that they enjoy.

So if we think about Butterfinger, we know exactly where we want that to play and win, so if we think about an investment strategy that consists of all of the elements I spoke to earlier, including additional innovation and additional brand support, but the same is true for Crunch, SweeTarts, Trolli and Black Forest, as we think about some of our larger leading brands. But then we have a whole series of emerging growth brands like Nerds, LaffyTaffy, Now and Later, that also enjoy and have enjoyed historical growth ... Baby Ruth, 100 Grand ... that we think are just on the tipping point, on the verge of additional breakthrough growth.

So, thoughtful segmentation, understanding where and how these brands need to play and win, and ... understanding how we want to position the brands. How do they play together in a complementary way, how do they play in the category more broadly, and how do they allow us to grow our retail partners and businesses?

When we can clearly articulate not only for ourselves but for the marketplace where these brands need to play and win, it makes it easier for all of us to understand how we’re going to position them and support them with innovation and brand marketing.

Why start with Butterfinger?

Mr. Siwak: The way we think about it is, if you step back and look at the Nestle portfolio, the non-chocolate part, led by SweeTarts and Nerds, is doing very well. SweeTart Ropes is one of the fastest growing components or segments of the confection category. Nerds Big Chewy just won an innovation award, doing extremely well, on-trend with Gen Z and millennials, multi-texture, crunchy, chewy … LaffyTaffy, poppable, chewy, fruit-forward. So those brands are working, and we’ll of course continue to support them as we discussed, but what we wanted to ensure is that the chocolate portfolio is also as vibrant as it could be and really fulfilling its full potential. And so we started with the biggest, and if you think about the two biggest opportunities, it’s Butterfinger and Crunch.

You play so broadly across the confectionery landscape. Is there anything missing from your portfolio?

Mr. Siwak: We have a beautiful portfolio of brands, and we’re really about the brands. We’re Ferrara Candy Co. We’re unapologetically and exclusively focused on the confection space … but we’re focused on the brands and promoting our brands and making sure we’re speaking to the consumer through our brands.