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The deal
US confectioner – and Ferrero sister company – Ferrara Candy Co. has struck a deal to buy Brazilian snacks business Dori Alimentos.
Based in Marília in eastern Brazil, Dori Alimentos sells brands including Dori, Pettiz and Jubes. The publicly-listed company has more than 3,100 employees working at four sites in the country.
Chicago-based Ferrara is the company behind brands such as Brach’s, Nerds and Trolli. It joined the Ferrero stable in 2017. The group has a network of 13 facilities in North America that includes manufacturing, distribution sales and R&D.
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Why it matters
First and foremost, the planned acquisition – which is expected to close in the fourth quarter – sees Ferrara expand outside North America.
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By GlobalDataThe company is one of the oldest confectioners in the US, with its origins dating back more than a century. It has a range of brands that also includes Black Forest and Sweetarts (some of which were part of the Nestlé stable Ferrero bought in January 2018, just months after the deal that brought the Italian giant and Ferrara into the same empire. Family-owned Ferrero describes Ferrara as a “Ferrero-related company”. Both have the same shareholder but Ferrara is not consolidated into the Ferrero group).
Without disclosing specific figures, Ferrara said Dori Alimentos had “enjoyed double-digit revenue growth over the last several years”.
Last year, Dori Alimentos generated net operating revenue of 1.19bn reais ($251.7m), up 22% on a year earlier. Gross profit grew 29% to 436.2m reais but net income was 8.3% lower at 65.4m reais amid a jump in financial expenses.
Dori Alimentos has three divisions: peanut snacks, sweet snacks and chocolate snacks. During 2022, Dori Alimentos said its “sweet snacks” was its biggest division by sales. The division saw its sales jump 31% to 588m reais.
According to forecasts from GlobalData, Just Food’s parent, Brazil’s sugar confectionery category, after a period of declining sales, is expected to be worth 1.9bn reais in 2027, when the industry’s five-year CAGR is estimated to be 4.6%.
“We have a deep admiration for Dori’s products and their extraordinary team,” Ferrara CEO Marco Capurso said. “We are excited to enter the rapidly growing Brazilian market and create opportunities for both Dori and Ferrara.”
Owning a Brazilian asset gives Ferrara access to a potential new source of growth outside the US. Dori’s presence in savoury snacks also sees Ferrara broaden its product portfolio, a strategy Hershey, for example, has followed in a major way back in the US.
However, another obvious opportunity will be for Ferrara to use its new asset’s domestic production and distribution muscle in Brazil.
And Mitsue Konishi, head food sector analyst at GlobalData, suggests Brazilian consumers have a particularly sweet tooth when it comes to international brands.
“Brazilian consumers’ preferences are favorable for Ferrara,” she says, pointing a recent consumer survey carried out by the research and intelligence group.
A poll ran in the fourth quarter of 2022 asked consumers in Brazil which types of products they “typically purchase” across chocolate, confectionery and desserts – and 46% answered “products made by foreign/global multinational brands”.
It’s a data point that will also interest the management team at “related company” Ferrero, the home to international brands such as Ferrero Rocher and Kinder.
The details
Financial terms were not disclosed.
In a statement, Ferrara said Dori Alimentos’ 3,100 staff would join its 4,600-strong workforce. The transaction is expected to close in the fourth quarter of 2023.
