Giovanni Ferrero Scoops Up WK Kellogg

Breakfast is crucial meal of the day, and Giovanni Ferrero is aware of it.

Scion and government chairman of Ferrero Group, the corporate behind favorites like Nutella, Kinder, and Ferrero Rocher, Ferrero introduced plans in July to amass WK Kellogg, maker of Frosted Flakes and Froot Loops, in a deal value $3.1 billion. The acquisition will broaden Ferrero’s presence in North America and reduce its reliance on chocolate merchandise amid rising world cocoa costs.

It additionally provides Ferrero Group a elevate in opposition to shifting client preferences as US buyers gravitate towards decrease priced storebrand snacks and cereals or go for more healthy choices.

Ferrero, grandson of the corporate’s founders and Italy’s richest man, has been on an acquisition spree since taking sole management of the corporate after the dying of his father, Michele, in 2015. He has since added at the very least 21 firms throughout 9 international locations to his portfolio.

Working in additional than 170 international locations whole and managing some 35 manufacturers, Ferrero Group reported €18.4 billion (about $21.5 billion) in income final fiscal yr, up almost 9% from the prior interval.

Kellogg has undergone a serious restructuring. The model, which originated in 1894 when Will Keith Kellogg by chance developed Corn Flakes, has proven resilience in navigating shifts in breakfast consuming developments, the motion to switch synthetic dyes, and even an total refocus on its health-and-wellness picture, says Russell Zwanka, director of the meals advertising program and affiliate professor of selling at Western Michigan College.

In 2023, the mum or dad firm separated its North American cereal enterprise, dubbed WK Kellogg, from its world snacking division, which was later bought to Mars, maker of M&M’s and Skittles.

“Once you consider breakfast, you consider Kellogg’s,” says Zwanka.

Married with two sons, Ferrero is an avid bike owner, a philanthropist, and the printed writer of three novels. On the helm of the corporate established in Alba in 1946, the acquisition of WK Kellogg is a crowning achievement.

“Including the Kellogg’s cereal portfolio to the Ferrero North American combine permits synergies in advertising messages, alternatives for crossbranding—perhaps a Nutella Frosted Flakes?—and opens up a completely new daypart for Ferrero,” Zwanka notes. “On high [of that], many shoppers make the most of cereal as a day snack, the place Ferrero already performs with some heavy-hitting manufacturers.”