Italian confectioner Ferrero said on Wednesday it is acquiring Wells Enterprises, one of the largest US ice cream makers, in a deal that will broaden both companies’ offerings.
Wells, a 100-year-old family-owned company based in Le Mars, Iowa, makes Blue Bunny, Halo Top and other brands. It employs 4,000 people and produces more than 200 million gallons of ice cream per year at plants in Iowa, New York and Nevada.
The Ferrero Group, which was founded in Italy in 1946 and is now based in Luxembourg, is also family-owned. Its brands – sold in more than 170 countries – include Kinder, Nutella, Tic Tac and Ferrero Rocher. Ferrero has more than 38,000 employees.
The terms of the deal were not disclosed. It’s expected to close early next year.
Wells Enterprises will remain a stand-alone business, and the acquisition won’t immediately impact any jobs. Mike Wells, the company’s CEO and chief engagement officer and the grandson of the company’s founder, will serve as an adviser during the transition period. Wells Enterprises President Liam Killeen will become the company’s new CEO.
Mike Wells said on Wednesday he met some of Ferrero’s leaders in 2019 on an unrelated trip to Europe and sent them some ice cream samples in 2020. During virtual taste testings, Wells showed Ferrero how it could recreate some of the company’s treats using ice cream.
Mike Wells invited Ferrero’s leadership to an annual ice cream celebration in Le Mars in June, and the acquisition talks took off from there.
Mike Wells said the combination will give his company access to Ferrero’s brands and scale. Ferrero has 8,000 employees and 18 plants in North America.
Ferrero entered the US market in 1969 with Tic Tac but has widened its presence in recent years. In 2017 it purchased Fannie May chocolates; the following year it bought Nestle’s US confectionery business and Kellogg’s cookie and fruit snack business. It also owns candy brands like Nerds and Butterfinger.
Wells Enterprises’ manufacturing plants will continue to produce ice cream but may pivot to indulgent treats under brands like Keebler or Ferrero Rocher.
“I look at it through the family’s eyes, and through this community that’s all things ice cream,” Mike Wells said in an interview with The Associated Press. “You’ve got one big company that only does one thing. And if there is a challenge to that category, if things go wrong, you risk everything.
“Being part of a portfolio company with access to brands and a better risk profile really allows the company to lean into growth in a very aggressive way,” he added.
Although Ferrero is private, it reported consolidated revenue of €12.7 billion (US$13.3 billion) in its fiscal year that ended August 2021. Wells Enterprises expects to report revenue of more than US$1.7 billion this year.
The acquisition gives Ferrero an ice cream platform in North America, one of the most popular markets for ice cream. US ice cream retail sales rose 5 per cent over the last year to US$7.2 billion, according to Nielsen.
Ferrero entered the ice cream market in Europe in 2017 with the Kinder brand. In 2021, it fully acquired Spain’s Ice Cream Factory Comaker and introduced its first-ever Ferrero Rocher ice cream bars.