Some analysts are predicting that this week’s acquisition of Dutch sugar confectioner Van Melle by Italian counterpart Perfetti will trigger a new round of international concentration in the confectionery industry. Cadbury, Kraft and Nestlé are just three of the confectionery heavyweights with an eye to expansion.
According to confectionery trade journalist Karel Beckman, there are a number of obstacles confronting confectionery majors as they seek expansion. In the case of Van Melle and Perfetti, the impulse driving the merger was self-protection. Desperate to prevent a hostile takeover and subsequent break-up by a multinational, Van Melle has sought refuge in the arms of a family-owned company it believes will treat it with a little respect. It has also been taken off the Stock Exchange.
Other problems include the different modus operandi of chocolate producers and sugar confectioners. It is no surprise that the ‘big six’ confectioners – Nestlé, Mars, Hershey, Ferrero, Cadbury, Kraft – are all chocolate producers, but many are seeking growth through diversification into sugar confectionery. The transition is not straightforward.
To find out why, and to read Karel Beckman’s exclusive analysis of forthcoming merger activity in the global confectionery sector, check out the feature on our home page, or click here.