Ferrero upbeat on future prospects in Chinese confectionery market

Ferrero remains optimistic about the future of the Chinese confectionery and snack market. "China holds significant development potential," said Zhang Suyi, general manager of Ferrero China. "With the continuously improving business environment, we are committed to further increasing our investment in the Chinese market and are confident in its considerable long-term growth."

This positive outlook is bolstered by the strengthened relationship between China and Italy, exemplified by Italian Prime Minister Giorgia Meloni's recent visit to China. These closer ties foster economic and cultural cooperation, benefiting Italian companies operating in China such as Ferrero.

Since entering the Chinese market in the 1990s, the Italian chocolate and confectionery giant has steadily increased its investment, introducing beloved brands like Ferrero Rocher, Kinder and Nutella to Chinese consumers. A significant milestone was the establishment of Ferrero Group's first North Asian manufacturing plant in Hangzhou in 2015, marking a crucial step in the company's Asian expansion.

This state-of-the-art facility serves as a regional manufacturing hub in Asia, catering not only to the Chinese market but exporting to more than 20 countries across Asia, North America and Oceania. Exports currently account for nearly 40 percent of total production and are projected to grow.

"The Hangzhou plant exemplifies our commitment to quality and food safety," explained Zhang. "Our stringent food safety and quality control measures extend beyond the production process, encompassing every stage from raw material sourcing and warehousing to packaging and logistics."

In addition, Ferrero China puts sustainable development at the heart of its operation. The Hangzhou plant is committed to green energy by incorporating solar panels to aid carbon reduction and has installed a monitoring system for real-time energy consumption. The plant also focuses on waste recycling and reuse, and has developed a solid system to track the process of solid waste generation.

In 2022, Ferrero Trading (Shanghai) was recognized as the managerial regional headquarters by the Shanghai Municipal Commission of Commerce, which will improve the group's operational management level in the local market to seize opportunities in the Chinese consumer market. Recognizing the characteristics of the Chinese market, Ferrero has tailored its strategies accordingly. For instance, nowadays, young consumers want to showcase their unique selves in social settings. To cater to this, Ferrero's Tmall flagship store launched customized greetings on Ferrero Rocher chocolate gift boxes.

Furthermore, Ferrero understands that Chinese consumers increasingly seek value for money, encompassing not just price but also the social and emotional value of the product, whether at large festivals or in more intimate settings. This understanding led to the launch of the "Golden Bucket" gift box for this year's Spring Festival. With a Chinese name Di Yi Tong Jin literally meaning "first pot of gold", the gift box provides a meaningful way for people to convey their wishes during the festive season.

Sales channels in the Chinese market are more diverse while new ones for confectionery products are rapidly expanding, including not only supermarkets, hypermarkets and e-commerce platforms but membership-only retail stores and specialty snack stores. Ferrero has also adapted to the diverse retail landscape in China, focusing on emerging sales channels, from O2O(online-to-offline) home delivery services and membership stores to bulk snack stores and group-buying platforms.

"Since entering China, Ferrero has witnessed the remarkable development of the country's foreign economic and trade cooperation," said Zhang. "Our products have delighted generations of Chinese consumers with a taste of Italy. We will develop more scenarios and expand into more retail channels. Taking quality at heart, we persist in bringing delicious snacks and delightful experiences to consumers across China with high-quality innovative products."