A Not-So-Sweet Brand Story

Did you hear the food industry news this past week? Nestle, the world’s largest food company according to Forbes, sold its U.S. confectionery business to Italian chocolatier Ferrero. You may be familiar with Nestle’s iconic American sweets including Nestle Crunch, Butterfinger, Baby Ruth, Raisinets, Nips, Skinny Cow, and Laffy Taffy.

Nestle’s mission is “Enhancing quality of life and contributing to a healthier future.” With U.S. confectionery sales just 3% of the overall company’s sales during 2016, CEO Mark Schneider explained, “This move allows Nestle to invest and innovate across a range of categories where we see strong future growth and hold leadership positions, such as pet care, bottled water, coffee, frozen meals, and infant nutrition.” Nestle’s brands in these categories include Purina, Coffee-Mate, Gerber, and Stouffer’s.

New owner Ferrero, headquartered in Luxembourg, is best known for Ferrero Rocher chocolates as well as Nutella and TicTacs. This acquisition will make Ferrero the third-largest chocolate confectionery in the world, according to London-based market research company Euromonitor International. And now, Ferrero will become a well-known brand in the United States.

What do you think? Has Nestle diluted its brand equity as a result of this sale? Do you associate Nestle with sweet brands and confections? The company began in 1866 as a milk and infant cereal company, and in 1875, began making milk chocolate. Whether you agree or disagree with the sale, it will be hard to see Nestle products under the umbrella of another brand.

Image Credit: Nestle.