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It’s Easter, so I wrote about a very adjacent topic this week: Ferrero Group, the world’s 2nd largest candy maker and creator of Nutella (AKA the goo-ey goodness you’re probably eating straight from the jar for breakfast right now).
Also this week:
- An update on Elon’s $43B bid to buy Twitter
- Why AriZona Iced Tea is still only $0.99
- Links + Memes
PS. Shoutout to LEX, this newsletter’s first official sponsor.
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Meet the Ferrero Group
This is Giovanni Ferrero.
He is Italy’s richest person, with a net worth of $36B.
The source of his wealth is Ferrero Group, the Italian confectionary giant which sold $14B of sweets last year (and is the world’s 2nd biggest candy maker). The private business employs 40k+ people and runs 30+ plants globally.
Nutella — the hazelnut spread — accounts for 1/5th of total sales (~$3B) but Ferrero also owns Kinder Surprise, Mon Cheri, TicTac, Crunch Bar, Nerds, Thornton’s and many more.
The firm is currently facing a salmonella-related recall for Kinder Surprise Eggs during one of its busiest times of the year: Easter.
Halloween typically sells the most candy volume of the year but Easter is the Super Bowl for nicely-packaged confectionaries, which is right in Ferrero’s wheelhouse.
This wasn’t always the case, though.
The Origin
The OG Nutella was invented in 1806 during the Napoleonic Wars. At the time, the famed French General started a continental blockade against his seafaring foes in the United Kingdom, which lead to a cocoa shortage across Europe.
Ever resourceful, Italian chefs started using ground hazelnut to stretch their dwindling chocolate supplies. The product they created was called gianduja.
Fast forward to 1946. Europe was dealing with yet another continent-wide shortage of cocoa (and food stuffs in general) following the end of World War II.
An Italian pastry chef by the name of Pietro Ferrero — a native of Alba, Italy — whipped out the recipe for gianduja and created a snack aimed at regular folk working on tight purse strings. His version of gianduja was sold as a solid block in gold foil, which was sliced like butter and eaten on bread. People loved it.
Why hazelnuts, though? Alba is in Italy’s northwestern region, where the nut (which comes from the hazel tree) is plentiful. Its high fat content and “nutty” flavor complements bitter chocolate very well (fun fact: a hazelnut’s shell-to-kernel weight ratio is a key quality metric).
In 1949, Pietro passed away. His brother continued to run the business while his son — Michele — joined the firm. Shortly after the changeover, the Ferrero clan turned the popular gianduja snack into a spread called Supercrema. According to Forbes, sales took off on the strength of “clever tricks”:
They sold it in receptacles like jars and pots so penny-pinched customers could reuse the containers. Rather than distribute it through wholesalers, the company used an army of sales reps who went directly to stores, helping keep prices low.
Michele took over in 1957 and the hazelnut product would have one final rebrand in 1964. That year, the Italian government started to crack down on superlatives in ads. Apparently, “super” was too hype of a word to have in a creamy-chocolatey product.
In response, Michele chose a new name that evoked the flavor of nuts. It literally could not be more literal: Nutella. With business going well, the Ferrero Group matched the name change with a reformulated product that added more sugar and cocoa (AKA made it a lot more addictive).
Michele Ferrero takes the business to new heights
Michele was far from a one-trick pony. He was a real-life Willy Wonka who was addicted to the game (of inventing new snacks). The Ferrero scion spent days on end taste-testing new candy formulations, all while sporting a lab coat.
His efforts yielded a caloric explosion of dopamine-inducing sweets:
- Mon Cheri (1956): A cherry-liquor filled chocolate. Michele created a method whereby the chocolate would *not* absorb the liquor filling. It was a huge hit in Germany. (I’m pretty meh on these tbh).
- TicTac (1969): These little oval mints were apparently named after the sound of opening and closing the container (it’s def smart: the click sound is a psychological hack that creates a “Pavlov’s Dog” type of association with the mint).
- Kinder Surprise (1974): Michele wanted children to experience Easter everyday, so he create a toy-in-chocolate eggs (somewhat crazily, Ferrero is the world’s 3rd biggest toymaker).
As he was ripping off one invention after another, competitors tried to uncover Michele’s methods. But he went to great measures to protect the proverbial secret sauce.
The Alba factory was mostly closed to outsiders while employees came from multiple generations of the same family who were all super loyal to Michele (when he took over Ferrero in 1957, he told the w
