Ferrero high-protein strategy: Overview
- Ferrero is expanding beyond confectionery through high-protein brand acquisitions
- GLP-1 trends are increasing demand for nutrient-dense protein products
- High cocoa prices are pressuring traditional confectionery growth strategies
- Ferrero favours regional high-protein brands over global platform building
- Functional health growth is reshaping competition across snacking categories
Early last year, Ferrero Group acquired Power Crunch, a high-protein brand. The Italian confectionery giant has recently relaunched the brand, reformulating it to make it ‘lighter’ and ‘crunchier’.
“At Ferrero, innovation starts with understanding how consumer preferences are evolving and bringing together the expertise, partnerships, and technologies to respond,” says a Ferrero spokesperson.
“Growing interest in protein-based snacks reflects a broader shift in consumer expectations, and Power Crunch is a strong example of how Ferrero has been able to provide a product that combines great taste, texture and functionality. Alongside our Better-For-You portfolio, Power Crunch helps us expand our presence in a growing category. R&D Open Innovation plays an important role in this journey, helping us turn emerging trends and technologies into distinctive products and experiences that support long-term growth.”
Power Crunch is not the first high-protein brand that Ferrero has acquired. Why is the company, best known for indulgent brands like Ferrero Rocher and Nutella, investing in high protein?
Why Ferrero is embracing protein
Ferrero is embracing high-protein products for the same reason as many other companies are, both in and out of confectionery.
Protein was already popular before the GLP-1 boom, but the rise of the weight-loss drugs and the subsequent boost in the demand for nutrient-dense products has made it even more so.
Meanwhile, many consumers, particularly in the US, are spending less on cakes, cookies and savoury snacks, and more on foods such as yoghurt and nutrition bars, explains Elizabeth Thundow, vice president for food and nutrition at data company Kline and Company. At the same time, the GLP-1 halo effect means that even those who are not taking the drugs are adopting diets associated with their users.
“Against that background, I see Ferrero’s protein moves as part of a longer, deliberate push beyond confectionery,” says Thundow.
As well as GLP-1s, high cocoa prices have put a strain on traditional confectionery, she points out, squeezing margins and pushing growth to price rises rather than volumes.
Lastly, in many ways, there is simply more to compete with on-shelf as confectionery companies embrace function en masse. “From a competitive perspective, the lines have blurred across the vast number of alternatives that consumers have to choose from,” says Erin Lash, director for consumer equity research at investment research company Morningstar.
“Confectionery manufacturers aren’t just competing against other indulgent offerings but the array of snacking alternatives on the shelf.”
High protein remains separate from chocolate
Over the last several years, Ferrero has purchased high-protein brands such as Power Crunch, Bold Snacks and Fulfil Nutrition, keeping its high-protein strategy largely separate from established confectionery brands like Ferrero Rocher.
“This speaks to Ferrero’s sophistication as a marketing powerhouse,” says Filiberto Amati, advisor at FMCG consultancy Amati and Associates.
“Each brand has its own positioning, which dictates the products and innovations it develops ... For some, a bridge into functional food is likely. With others, it is not.”
Functional and high protein do not suit the positioning of Ferrero Rocher, for example, a premium chocolate associated with indulgence and gift-giving.
Another reason is regulation. In the EU, 20% of a product’s energy must come from protein for it to make a ‘high-protein’ claim, points out Kline and Co’s Thundow. “It’s very hard to get a hazelnut praline to that level and still have it taste like Rocher.”
Is Ferrero an outlier?
Ferrero is rapidly diversifying into better-for-you segments, explains Amati and Associates’ Amati, investing in functional snacks and foods.
It is far from alone in this. Many key confectioners – Nestlé, Mars, Inc., The Hershey Company and Mondelēz International among them – are diversifying into these categories.
Yet, points out Thundow, Ferrero is buying regional players – Fulfil in the UK and Europe, Power Crunch in the US, Bold in Brazil. This differs from its competitors, many of whom are aiming to take one brand global.
Amati agrees. Ferrero “focuses less on buying big assets and scaling them globally, and more on regional players. I think that makes total sense because in this way they buy scale where they don’t have it, or they leverage their existing scale to introduce some of these products when it makes sense”.
Taking its place in a new world
Ferrero’s protein strategy did not begin with its relaunch of Power Crunch. Yet it further entrenches the company in the increasingly important functional world.
Ferrero may not be alone in its commitment to high protein. But in terms of its strategy, it does stand out.
