- Confectionery giant Ferrero Group will acquire ice cream maker Wells Enterprises. The purchase price and terms of the deal were not disclosed. The deal is expected to close in early 2023.
- After the transaction closes, Wells Enterprises will remain a stand-alone business with its headquarters in Iowa and manufacturing facilities in Iowa, Nevada and New York. Wells CEO and Chief Engagement Officer Mike Wells will serve as an adviser to support the transition, and current Wells President Liam Killeen will become the ice cream business’ CEO.
- Ferrero, based in Italy, has been aggressively moving to capture more market share in the U.S., largely through acquisitions. The company bought Kellogg’s cookies and fruit snacks business for $1.3 billion in 2019, spent $2.8 billion in 2018 for Nestlé’s U.S. candy business, and bought U.S. confectioner Ferrara in 2017.
Ferrero has gone from a niche European producer best known for Nutella and Ferrero Rocher to becoming a force in the broader U.S. sweets market.
The Wells acquisition follows the company’s playbook, and immediately gives Ferrero a huge foothold in frozen treats — a space that it was not previously working in.
Wells says it is the world’s largest family-owned and managed ice cream company. While Wells started in 1913 as a dairy delivery wagon business, it now owns some of the biggest brands in frozen treats, including Blue Bunny, Bomb Pop and Halo Top.
“This represents a win-win partnership, bringing together ice cream experts and confectionery champions,” Ferrero Group Executive Chairman Giovanni Ferrero said in a statement. “Together, we have the power of one and are well placed to grow and compete in the ice cream market.”
This acquisition, like Ferrero’s big-ticket ones before it, catapults the company into a leading position in another segment. While the Ferrara and Nestlé purchases gave Ferrero a bigger piece of the U.S. confectionery market, the Kellogg purchase gave Ferrero an entry into cookies with the Keebler and Famous Amos brands.
Ice cream as a whole has seen quite a lot of movement recently.
In 2019, Nestlé sold its U.S. ice cream business to Froneri, a joint venture it had previously created with PAI Partners. Since earlier this year, as Unilever streamlined its business model, rumors have been rampant that it would be selling off its ice cream brands. Soon-to-retire CEO Alan Jope has said Unilever’s ice cream business is an important part of the company, but it’s unclear what might happen with someone else at the helm.
Wells itself has been expanding its presence in the ice cream business. In 2019, it bought Halo Top for an undisclosed amount. While Halo Top has not recently been the dominant brand it was soon after its launch, Wells has nurtured the brand with a reformulation earlier this year to make it creamier.
The structure of this deal allows Wells Enterprises to stay a largely independent part of a huge company, similar to the way Ferrara fits into Ferrero’s corporate structure. This will allow Wells to use its expertise, as well as the closer touch of a previously family-owned company, to make its own decisions about the ice cream business. But with the backing of the much-larger Ferrero, Wells will have more resources at its disposal for R&D, innovation and crossover frozen treat concepts.
In previous acquisitions, Ferrero has waded slowly into making product improvements, either through improving ingredients, changing packaging or adding new options.
Revamped Butterfinger bars featuring jumbo runner peanuts and higher percentages of cocoa and milk began to hit shelves about a year after Ferrero acquired the brand. The Keebler line saw the addition of more natural vanilla and real chocolate along with changes to its packaging to give its cookies a more standout presence on shelves.