Perspectives from ISB

Ferrero International SA is an Italian manufacturer of branded chocolate and confectionery products and the third biggest chocolate producer and Confectionery Company in the world. It was founded in 1946 by Pietro Ferrero. The company, remains wholly owned by the Ferrero family, and generates €9.5 billion ($10.52 billion) in annual revenue. Its products include Ferrero Rocher pralines, Nutella, Tic Tac and Kinder eggs.

The company saw a period of tremendous growth and success under Pietro’s son Michele Ferrero. Michele stepped down as CEO in 1997 but remained involved in product development and strategic decision making until he died last year at 89. He was succeeded in 1997 by his two sons, Giovanni and Pietro, who served as co-CEOs. Pietro initially led the company, while Giovanni focused on his interests outside the business. Pietro died in an accident in 2011 leaving the fate of the company in the hands of his introverted brother Giovanni Ferrero.

Following the death of Michele Ferrero, the 51-year-old third-generation CEO, Giovanni Ferrero has increased the pace of change at the company. In the past 18 months, the firm has brought new products to market in half the time; acquired Thorntons PLC, a British chocolate maker; and recruited managers from outside Italy. He has also reorganized the company according to regional divisions rather than product categories. He is actively seeking new acquisitions in order to double the company’s revenue in the coming decade, with most of the growth coming from outside Europe.

Source: Wall Street Journal, Aug. 9, 2016

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