Unwrapping Ferrero Rocher’s Brand Positioning

I remember the snow falling lazily outside while soft jazzy tunes played in the living room as I unwrapped my very first Ferrero Rocher chocolate my aunt had brought over. As a kid, I was not the type to beg Mom for candy at the grocery store, but these chocolates were something special. A whole hazelnut, dipped in chocolate, and coated in more hazelnut pieces, Ferrero Rocher was something that I had never tasted…and I would not taste again until many years later.

Nestled between rows of Trident gum and 5-hour energy shots, the glowing spheres caught my eye and I recalled those same childhood memories unwrapping Ferrero Rocher chocolates during the holiday season. The chocolates stayed true to my memory– nothing had seemed to change. The golden foil was there, the recipe remained intact, and even the way I would eat the outside chocolate layer first then devour the chocolate sphere, stayed the same.

Perhaps that was the reason why I had not eaten Ferrero Rocher in so long. As I grew up and my preferences and tastes changed, by staying the same over decades, the brand was no longer relevant to me.

Who is the Ambassador?

Even though Ferrero Rocher was not relevant to me anymore, I wanted to find out if the same was true for others. Surprisingly, Ferrero Rocher is the #3 everyday gourmet chocolate brand in the US by annual sales volume, behind Lindt and Ghirardelli (Nielsen). It has strong national ACV (all-3_ferrero_pop-121-render_1-1024x791commodity volume), meaning it is distributed in major, high volume stores across the United States. But where were these sales coming from? As is true with the entire chocolate category, the majority of Ferrero Rocher’s sales come from holidays throughout the year, and especially between November and December. The week of and preceding Valentine’s Day, Easter, and Mother’s Day are all also huge sales periods for the brand and category.

Source: Analysis from Nielsen NITRO
Source: Analysis from Nielsen NITRO

As a result, it makes sense that Ferrero Rocher focuses its marketing exclusively on these periods, investing heavily in point-of-purchase push marketing and television ads.

Source: Analysis from Kantar AdSpender
Source: Analysis from Kantar AdSpender

In all of its points of interaction with consumers, Ferrero Rocher positions the brand as a luxury good. The gold foil, the gaudy ads showcasing Greek gods, and the brand name itself are attempts to create an aspirational lifestyle brand for the well-to-do.

 

Is it working? The sales seem to prove so. But I think that the brand can grow beyond its ostentatious image and appeal to an even larger audience, allowing it to unlock incremental sales volume.

In the Lap of Luxury: Ferrero Rocher’s Positioning

Ferrero Rocher faces a problem with its misaligned positioning. Consumers are confused. Is the brand a luxury chocolate for the rich or an accessible chocolate for the low and middle class? If we look at the brand’s advertisements in the past, the former seems true. Messaging about foreign ambassadors and Greek gods position the chocolate for those in the upper rungs of society. A step in the right direction, newer ads revolve around special occasions and holidays and feature posh parties. But the fact that the chocolates are sold in convenience stores like 7-11 and superstores like Walmart prove otherwise.

Referencing a 2014 consumer study, Ferrero Rocher over-indexes among consumers with annual household incomes below $49K USD and among those with incomes above $150K (MarketResearch.com). It struggles to attract the middle class. But by attempting to appeal to two opposite ends of the economic spectrum, Ferrero Rocher can never truly unlock its full potential, because each group has clashing wants and needs.

Another piece of the brand’s misaligned positioning lies with the brand’s consumption occasions. With its marketing confined to the holiday season, consumers have associated the brand with special occasions and holidays, rarely consuming the brand on a regular weekly basis, whereas competitors like Lindt’s Lindor have become everyday snacks. This is seen in the respective brands’ sales, with Lindt Lindor seeing strong year-round sales and Ferrero Rocher with significantly lower sales outside of holidays.

Ferrero Rocher has attempted to transition away from holidays by releasing a suggested wine pairing list, a high brow practice common with high-end dark chocolates. However, since Ferrero Rocher is made with milk chocolate, it seems unlikely that wine connoisseurs would think of Ferrero Rocher when making pairings. Rather, it is likely that the brand is attempting to jump on a food trend it has no business partaking in.

Revamping the Brand

If Ferrero Rocher is to grow sustainably in the future, it must revamp its brand to adjust to new consumer trends, tastes, and expectations. At the same time, the brand must be genuine and remain realistic in what role it plays in a consumer’s life. A three pronged strategy focusing on hazelnut messaging, consistent brand positioning, and product innovation can be implemented to refresh and grow the brand.

Hazelnut Messaging

Analyzing Ferrero Rocher’s core competency, it is clear that the brand must leverage its hazelnut heritage and supply chain. As the largest purchaser of hazelnuts in the world, Ferrero Rocher’s recipe calls for Tonda Gentile hazelnuts, which are uniquely sweet. Ferrero Rocher ads mention whole hazelnuts, but product packaging does not prominently feature hazelnuts, instead relying on pull marketing to inform consumers prior to purchase. I would be interested in knowing whether Ferrero Rocher consumers purchase the chocolate because it has such a heavy emphasis on hazelnuts or just because it is a delicious candy. If the former is true, this prong in the strategy becomes even more important.

New ads must reinforce the idea of Ferrero Rocher as THE hazelnut chocolate—an expert with rich heritage in hazelnut confections from its beginning. This is inimitable, as Ferrero Rocher truly is the only chocolatier with such a history, and a product to back up its claims. Shopper marketing should also be utilized to educate consumers about Ferrero Rocher’s unique hazelnuts, whether through shelf/floor talkers or Catalina targeted coupons.

Consistent Positioning

No longer should Ferrero Rocher attempt to appeal to both the rich and the aspiring to be rich. The brand should double down on those it performs best with–young adults with incomes less than $49K USD–and reach out to target the middle class, a consumer segment that comprises a large portion of chocolate sales.

Among this demographic, a growing mega-trend involves rewarding oneself and indulging in chocolate snacks throughout the day. Competitors like Lindt Lindor have capitalized on this trend, successfully integrating their products in consumer’s everyday aims to reward themselves.

However, Ferrero Rocher does not have a right to win in everyday consumption. The product is much too rich and the brand too gaudy. Rather, a gradual transition must be made to position the brand as the ultimate indulgence during the target’s week. A Lindt Lindor chocolate may satiate the consumer for an hour, but when she truly wants to reward herself for a big accomplishment, she can turn to Ferrero Rocher, with its gold foil, whole hazelnut, and luscious chocolate.

New promotions should move away from the ostentatious messaging consumers have come to associate with Ferrero Rocher. Gone are ads like “The Ambassador’s Reception” and “The Food of the Gods,” and instead are ads that feature situations where consumers reward themselves with hazelnut chocolate indulgence. Instead of opulent parties, scenes should depict realistic scenarios that are believable and that the target can relate to.

Product Innovation

To support the first two prongs in the strategy, Ferrero Rocher should introduce packaging innovations to align the brand positioning with the product. Current packaging focuses on gift boxes, which while elegant, prevent the brand from becoming a chocolate snack to quickly grab and eat, as well as reinforce the view of the chocolate as a gift.

Ferrero Rocher Snack Bag Mockup
Source: Author’s rendering

Snack bag packaging would allow Ferrero Rocher to support its new “reward myself” positioning and improve the brand’s distribution. Bags are also better able to fit in retail customers’ shelves when compared to bulky gift boxes, which could increase retail facings and improve distribution. To the left is a mock-up I created of what the new packaging might look like using Lindt Lindor’s existing snack bag packaging.

 

Looking To The Future

Ferrero Rocher offers a delicious product with great potential. It has an attractive opportunity to expand its position within the everyday gourmet chocolate category, capturing new consumers with a revamped positioning focusing on its hazelnuts and rewarding oneself.

The brand risks decreased sales during the holiday season as it allocates spending throughout the year, but if the brand is able to shift away from its focus on holidays and special events, it can unlock incremental volume and secure sustainable growth over the long-term. I strongly believe that with a revamped brand strategy and marketing activations, the brand can increase its relevance in consumers’ lives.

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