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April 5, 2005

UK: Ferrero: biscuits for beverages (COMMENT)

Ferrero is to target adults with a new biscuit called Giotto, launched in the UK this week. Giotto is an established biscuit brand elsewhere in Europe and its target audience represents a stark contrast to Ferrero's debut into the biscuit category last year. Early indications suggest that the brand is going to capitalise on the opportunities offered by linking snacking and beverage products.

Ferrero is to target adults with a new biscuit called Giotto, launched in the UK this week. Giotto is an established biscuit brand elsewhere in Europe and its target audience represents a stark contrast to Ferrero’s debut into the biscuit category last year. Early indications suggest that the brand is going to capitalise on the opportunities offered by linking snacking and beverage products.

According to the Grocer, Giotto is a nutty wafer biscuit with a creamy hazelnut centre and will be available in a five- and a 40-biscuit pack. While the product is a similar shape and hazelnut flavour to the company’s Ferrero Rocher confectionery brand, Giotto will be positioned as a standalone biscuit brand despite the possibility that it could be perceived as a confectionery product. This potentially blurred distinction could therefore create some difficult merchandising dilemmas for category managers.

The positioning rationale is likely to be based on lessons the company has learnt from Europe. Giotto has been on the German market since 1996 and was successfully launched last year in Ireland. Ferrero is now optimistic of further success in the UK, with sales forecast to exceed £15m (US$28.1m) in its first year on the market.

The company can also draw on successful experience from its debut in the UK biscuit category when Fererro extended its Kinder portfolio with the Happy Hippo line. Aimed at lunchboxes and eating on the move, the brand has already established a wide distribution and loyal customer base.

The Giotto launch is being backed by a £3m television advertising campaign. With Ferrero describing Giotto as an adult biscuit that is the perfect companion to coffee, the company should be well placed to exploit the growing opportunities emanating from the UK’s omnipresent coffee culture.

Coffee consumption at home is on the rise partly as a result of the spread of premium coffee bars across most UK towns and cities. Ferrero may find it has the chance to develop Giotto both as a treat to be enjoyed at home while also setting up partnerships to sell it in cafés. Ferrero’s proposed £1m sampling campaign, which is being run across outlets including Coffee Republic, shows it is already capitalising on the opportunity by reinforcing the connection with coffee among consumers. In Europe and the US, over 40% of snack occasions involve the consumption of a beverage. This suggests that marketers have numerous opportunities for co-branding initiatives to drive consumption purchases.

(c) 2005 Datamonitor. All rights reserved. Republication or redistribution, including by framing or similar means, is expressly prohibited without prior written consent. Datamonitor shall not be liable for errors or delays in the content, or for any actions taken in reliance thereon.

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