Inside the Billion Dollar Empire of Ferrero Rocher

At Christmas time, it’s not uncommon to see the gold-wrapped Ferrero Rocher…

Inside the Billion Dollar Empire of Ferrero Rocher

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December 10 2019 /
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At Christmas time, it's not uncommon to see the gold-wrapped Ferrero Rocher lining on every supermarket wall. 

Christmas and New Years are the busiest of times for the Italian company, as the season accounts for a massive chunk of its yearly sales.

What you might not know, however, is that the harmless little hazelnut chocolate's billion-dollar empire is the centre of an ecological row between Italian locals — but the situation is a little more grey than you think.

Rapid expansion under the edible empire, which amounted to over AU$16 billion in net sales last year, is under fire from rapid deforestation and ecological damage.

An Italian farming consortium has reportedly signed on to give the lucrative Ferrero business 700 more hectares by 2023 — boosting its portfolio to 90,000 hectares across Italy to farm hazelnuts.

Photo: Hazelnut Farm in Piedmont Italy

In case you didn't know, Ferrero is the merchant behind Nutella, Kinder, Tic Tac, and the coconut-covered Raffaello products.

This all contributes to one the cocoa industry's darling players — an extremely lucrative business that is no stranger to controversy.

Ultimately, a considerable amount of cocoa in the industry is sourced from illegal operations in the Ivory Coast. Ferrero themselves farm out cocoa from the West African region.

However, the Italian company is like many others that pledge to do better and makes promises to the UN. In 2017, Ferrero pledged to end cocoa deforestation by signing a "framework for action." This pledge would call to action for specifically the Ivory Coast and Ghana.

Brands under Ferrero are also some of many products made using palm oil. Palm oil has come under fire in the last few years, with consumers becoming perceptive of devastating effects its agriculture has on the environment.

Most notably, palm oil's highly efficient and high-quality yield produces an edible vegetable oil that is used in an array of products. It's in non-edibles such as detergents, soaps, and biodiesels.

Photo: Hazelnut fruit in August, Piedmont Italy

Palm oil is an edible vegetable oil that comes from palm trees. Borneo, in particular, has recently crossed the landmark of filing down half of its forestation in favour of making money from palm oil. Orangutans, rhinos, and elephants are some of many animals affected by the deforestation.

Although at one point Ferrero was in the crosshairs for sustainable palm oil activism, it's now actually one of the leaders in promoting healthy agriculture.

Palm Oil Scorecard, a website that ranks sustainable agriculture, awarded Ferrero a nine out of nine scores. According to the website, run by the World Wide Fund for Nature, Ferrero began its sustainable journey in 2011 and today represents a near-gold standard in global agriculture.

Despite all of these initiatives, the company still faces a tiff back home in the mother-land. Italian director Alice Rohrwacher penned an open letter to the surrounding governors of Italy's Umbria and Lazio regions.

Rohrwacher explained she was hurt to see hectares of forest filed down in favour of extensive hazelnut farming. Particularly, an area that was once the backdrop of her Cannes knockout film Le Meraviglie.

"Dear Editor, I want to launch in your newspaper an appeal to the President of the Umbria Region, Katiuscia Marini, to the President of the Lazio Region, Nicola Zingaretti, and the President of the Tuscany Region, Enrico Rossi," the film director wrote for Italian newspaper la Repubblica.

"I write in the hope of finding both an institution that has its territory at heart and those who live there, a policy that is willing and able to think of a true and community development, sustainable for all."

Alice is not alone in her mission, she's backed by several politicians including Italian Bio District President Famiano Crucianelli.

Famiano was at the centre of a recent press conference, with Alice Rohrwacher in attendance.

"We are not against Ferrero," Famiano said.

"But [the deforestation] risks turning wealth into a strategic curse for the whole territory."

Famiano and the Bio District proposed several conditions to better Italy's agriculture.

"At the third multinational company in the world in the agri-food sector, we ask instead that it respect biodiversity and that a part of the territory of Tuscia envisaged by the project produces hazelnuts with organic methods," Famiano said in respect to Ferrero.

"Ferrero is obligated to deal with the economic repercussions for our territory without risking turning it into a colony. Finally, we ask Ferrero to invest in research. Research that improves the quality of the environment and people's lives. In summary, how to cultivate without polluting."

For a lot of people in the world, Famiano's words of bettering agriculture speak to them.

But for many others', Ferrero's existing self-proposed initiatives and PR blitzes are enough to satisfy.

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