Ferrero North America shows the value of premium

Noah Szporn, senior vice president of spreads at Ferrero North America, explains how during these inflationary times premiumization has found a place in the value channel.
Elizabeth Christenson
Editor, Retail Leader
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  • Bringing premium quality products to market requires educating consumers on their value.
  • Noah Szporn, senior vice president of Nutella at Ferrero North America, broke down how Ferrero’s premium brands have found a place in the value channel in the latest episode of Retail Leader’s Trend Talk.
  • Szporn says retailers and consumers are looking for premium experiences even during these inflationary times.

A rocket ship ride of growth would be how Noah Szporn, senior vice president of spreads at Ferrero North America, would describe his nearly 15 years at the brand. Szprorn primarily manages the Nutella label, and this year the brand has been busy with the launch of two new products: Nutella Biscuits and Nutella B-Ready. These new products move the Nutella brand into the snacking arena for the first time in the U.S. 

As a European food company, premiumization is core to Ferrero’s DNA, and the company has been focused on bringing premium quality products to market throughout its existence. Today, Szporn said the question is how do you bring premium products to market and show consumers the value? 

“When you launch a new brand, it's really hard to educate a consumer why they should pay more for it,” Szporn said. “What our challenge has been, and what we’ve done very successfully at Ferrero, is really bringing products to market which we know are outstanding and then using advertising and in-store executions effectively to show consumers that product and why it’s worth them to pay 50 cents or 60 cents more.”

In turn, Ferrero is focused on stimulating that initial purchase to prove to someone that it's worth them paying a little bit more.

“What we’ve found is both from our retailers and from our consumers, they are looking for those experiences,” Szporn said.

Even during these current economic headwinds, the premium products Ferrero offers come as an affordable indulgence.

“The thing we consistently need to keep proving is the reason why they should buy us and spend that little extra more because the experience is going to be worth it,” Szporn said. “What we see in these times, it’s not that consumers are unwilling to do that, but they have more fixed dollars.”

Ferrero, in turn, makes sure it’s one of the brands that consumers want to have in their basket every time by communicating its products’ value and providing a quality experience. 

“The key of winning — in whether you call it a recessionary time or inflationary time, when people’s wallets and purses get pinched — is how do you make sure that your value is so apparent to them that they’re not willing to trade you off for someone else,” Szporn said.

Working with retailers

After studying consumer trends in the U.S., Ferrero decided to lean into the growing trend for snacking. In turn, Ferrero has evolved from just offering premium confectionary products, such as Ferrero Rocher, into providing premium sweet packaged foods for the entire center store.

As a CPG company with a strong catalog of products in Europe, whenever Ferrero introduces a new product in the U.S., the company meets with retailers extremely early in the launch process. Ferrero asks for feedback on how retailers would like to execute the launch as much as two years in advance of market introduction. 

“The consumer may want it, but if it can’t be executed in their retail stores, it’s never going to see the light of day to market,” Szporn said. “It’s absolutely critical having their feedback into how you’re going to execute.”

While mass merchants, such as Walmart and Target, and large grocery chains are always going to be critically important to Ferrero’s sales, the dollar channel provides a new avenue for the company to grow. Ferrero has taken on the challenge of offering value while also maintaining a premium brand.

“It’s an interesting challenge and a big opportunity because they can sell a lot of product and their shopper definitely has shown a big demand for more premium products,” Szporn said.

Additionally, the e-commerce channel offers Ferrero more growth opportunities, along with the challenge of providing the right product mix at the right value.

“Sometimes selling someone candy and food, it’s not a natural purchase on e-commerce,” Szporn said. “Why would someone buy a jar of Nutella or a bunch of candy bars when they could just go to the store? So you have to figure out how do you create the right bundle for them at the right price point for them to want to make that purchase online.”

Hear more about what Ferrero North America is working on by listening to Retail Leader’s full interview with Szporn. Subscribe to Trend Talk wherever you listen to podcasts.