Ferrero may bring brands it acquired from Nestle to India
NEWDELHI: Ferrero India Pvt. Ltd, the local unit of Italy-headquartered Ferrero Group, may expand its product offerings for the Indian market with the launch of 20 new confectionery brands, which it had acquired from the US unit of Swiss packaged goods company Nestle SA in January.
“We are exploring synergies of the sugar confectionery brands that we had acquired earlier this year. We may bring some of them to India. We want to expand our reach, go mass market with lower price points. There will be more variants of our existing brand, Tic Tac, and some more brands in the sugar confectionery space,” Ferrero India managing director Stefano Pelle told Mint.
Ferrero had acquired the US confectionery business from Nestle for $2.8 billion in cash. As part of the transaction, it had bought the exclusive rights for the Crunch confectionery brand, besides picking up sugar brands such as SweeTarts, LaffyTaffy and Nerds, and chocolate brands Butterfinger, BabyRuth, 100Grand, Raisinets and Wonka.
“We are yet to finalize the brands and products that we would launch in India,” said Pelle. The company is also working on doubling its distribution network to one million retail outlets within 18-24 months.
“That is our immediate goal. In the long-term, say, 10 years or more, we aim to cross $1 billion in sales from India,” he added. While the family-owned group does not disclose revenue numbers, Pelle said Ferrero had already crossed sales of ₹1,000 crore in India. The Italian maker of KinderJoy candies, Nutella spread and Tic Tac breath mints, is also firming up plans to invest ₹2,000 crore over the next three years to make India a product development and export hub to feed its West Asian, Africa and South-East Asian markets. The company has invested about ₹1,500 crore, since it entered the Indian market in 2007.
As part of its plans to add new segments to its product portfolio, the company has tied up with Netherlands-headquartered Unilever to make ice cream under its flagship Kinder brand for European markets. Unilever sells ice cream under Wall’s brand in India.
Ferrero, which has so far played in the premium segment, will now look to build a portfolio, which would cater to the masses. “We have Tic Tac in ₹10 and ₹5 price points. But we need more products in ₹10 and ₹20. We may not have chocolates at these price points. But we will have products at ₹10 and ₹20 in sugar confectionery. At present, we do not cover a big part of the market in India. Sooner or later, that has to be addressed,” said Pelle.