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PREMIUM PLAY FERRERO NA CEO CHIBE AIMS TO BOLSTER COMPANY’S US PRESENCE

Gabrielle Saulsbery | NJBIZ

Ferrero North America has made some big moves in the last two years. It acquired Nestle’s U.S. candy business for a reported $2.8 billion in January, making it the third-largest chocolate company in the country. They nabbed Illinois-based Ferrera Candy Co. a few months before that and Midwestern mainstay Fannie May Chocolates the previous spring. Now, they’re rumored to be on the verge of buying Campbell Soup Co.’s international business and snack segments — though Paul Chibe, CEO of Ferrero North America, would not comment on the speculation.

He did, however, provide insight on what he’s learned from three-plus decades climbing the ladder in the food business. The marketing vet-turned-CEO talked food trends, adjusting to New Jersey and what it takes to be a good leader.

NJBIZ: You’ve been in C-suite positions in the food business for a long time. How are the industries that you’ve worked in similar, specifically beer and candy?

Chibe: The beer industry is very much focused on positioning, brand personality and identity. That is very much true also in candy.

If you think about beer, lagers are very similar but their perception and their identity is driven by what the brand marketing has done over time. In confectionary the gum category. There’s a lot of similarities in gum. But what they’ve stood for are very different based on the marketing.

The other thing about the categories I’m lucky enough to work in … when I share with people that I work at Ferrero or I worked at Wrigley and Anheuser Busch, everyone’s excited because they all have an opinion on candy and they all have an opinion on beer. They’re very personal. People feel emotionally connected to the brands that they love. When you share with somebody that you work in candy or beer, there’s a nice conversation that follows.

NJBIZ: You moved to New Jersey from St. Louis to take the post here. Is doing business here any different than doing business elsewhere?

Chibe: Some of the macro issues that are facing New Jersey are similar to elsewhere in terms of infrastructure and taxes. What’s nice about New Jersey is that it has this access to the tristate area, one of the best educational systems in the United States and in the world, and access to one of the best talent pools in the world.

As you’re building a business, you basically can get everything you need in terms of people and support, and that can really lead to a lot of success. It’s not a coincidence that pharma’s based here and a lot of [consumer packaged goods have] been based here.

NJBIZ: Did you have any connections to the state before you came to Ferrero?

Chibe: [AB’s] global headquarters is in … on Park Avenue, so I was in New York City quite often. But through Mars, I had been [to New Jersey] a few times. Mars had bought the Wrigley Co. in 2008, and that’s really where I started to get some exposure to New Jersey.

What it is on TV and what it is in person are very different. You have this beautiful green state that’s an hour outside of New York via train, and you’ve got deer running around like crazy. You would never expect that from what you see on TV. You don’t get that mental image of New Jersey as being this beautiful, lush state. It’s kind of rural when you really get into it.

NJBIZ: In the last year you’ve acquired Nestle chocolate and Ferrara, which has brands like Trolli and Black Forest gummies. What made those brands the right acquisitions for Ferrero?

Chibe: They’re brands that have a strong iconic status that became available to the company. [Chairman Giovanni] Ferrero knows that as part of becoming a more global company, you have to have a significant presence in the U.S. This is one of the markets that we’re not as developed in, versus where we’re very much in leadership positions in Europe and Asia.

It’s usually the reverse — usually everyone’s big in the U.S. and they go into other markets. That opportunity is one of building our own business, but it’s also the opportunity of enhancing our scale with M&A.

Here you had iconic brands that, especially in the Nestle situation, had not been tended to the way that a company that is only focused on confectionery would. It gives us an opportunity to reinvigorate these brands and build them for the long term here.

NJBIZ: So that’s what you think Ferrero has the opportunity to offer Nestle chocolate — that Nestle is such a gigantic company that they weren’t able to focus so much on the chocolate?

Chibe: I can’t say that they couldn’t. They chose not to. Nestle was going in a different direction strategically, so for them the importance of that portfolio became less so. For us, being a confectionery company, obviously a confectionery brand will be of strategic importance to us.

NJBIZ: Are there any recent acquisitions you’re particularly excited about developing from the Ferrero standpoint?

Chibe: I’m excited about all our acquisitions. I’m excited about the opportunity behind the Nestlé brands, and I’m extraordinarily excited about Fannie May.

We believe again it was a business that had an opportunity and we think that under our ownership over time that will become a gem again in the confectionery landscape. Mr. Ferrero personally invested in Ferrara, and Ferrara is growing faster than the industry average already. There’s still tons of upside.

NJBIZ: What trends do you see Ferrero capitalizing on in the future?

Chibe: The American consumer is becoming more and more discerning about quality. If you think [of the craft beer movement], people wanted not only higher quality — because the major beer companies are very high quality — it was also the focus on different flavors, more intense flavors, different taste profiles and just exploration.

In over a 30-year-period, sushi, Thai food, Mexican food … all these ethnic cuisines have come into the United States and become mainstream because people are looking for new things, quality and different taste experiences.

Where that helps us in our business is that people want quality and they want premium, and they’re willing to pay.

People are willing to make a choice in paying for premium in different segments. As you look at our offering in the market, the perception is that it’s premium. It is premium, and people are willing to make that choice.

We’ve been growing, because just like in every other category consumers are being choiceful and saying, “hey, if I’m going to pay, I might as well get the stuff I want or the higher-quality thing and pay the extra dollar.”

People are willing to make a choice in paying for premium in different segments. As you look at our offering in the market, the perception is that it’s premium. It is premium, and people are willing to make that choice.

We’ve been growing, because just like in every other category consumers are being choiceful and saying, “hey, if I’m going to pay, I might as well get the stuff I want or the higher-quality thing and pay the extra dollar.”

NJBIZ: Do you think people are more focused on price point these days or quality for the products that they’re purchasing?

Chibe: It’s a little bit of both. It’s total value proposition. There are some categories where you’re not going to invest in a brand.

Consumers are squeezed every day. Their incomes are finally going up again, but when you look at the things that are on their bills now, 10 [to] 15 years ago, you didn’t have an iPhone bill. Now you’ve got your Amazon Prime. You’ve got all these new expenses that you didn’t have 10 or 15 years ago, so people are making choices.

There’s other categories where people will make the investment in the branded product, and confectionary and beer [are two] of them. There’s so much wrapped up into certain categories. It’s emotion, it’s reward, it’s indulgence. Because of the marketing investments, [these categories] will be ones where consumers are willing to pay for premium and they pay for quality.

NJBIZ: You definitely talk like somebody who was raised in the marketing industry, as you were. Do you miss being more focused on the marketing aspect of things?

Chibe: I can tell you what I miss and what I don’t miss. Obviously when you’re in a marketing role, it’s a lot of fun. You get to express your creativity. You get to do work with the agencies in creative ways. You get to go to events. You get to really enjoy that understanding and that connection with the consumer so that you can bring those brands to life.

You kind of miss that as you get into my role … I’ve got to oversee HR, finance, supply chain, industrial, so on and so forth, so that’s a much smaller component of what my responsibility set is.

I miss the opportunity to really directly express my creativity and to impact the business. The thing is that I have to let my marketers learn and grow too. I have to let them do it on their own so that they learn how I learned. Some things I can teach, but there’s other things you have to learn by doing and I have to give them that opportunity.

You want to give them the opportunity to have their life and have their opportunity to make their impact without an overlord telling them every step to make and I try to be very cognizant of that.

NJBIZ: Sounds really fair of you.

Chibe: You’ve got to give them a shot. The one thing that I don’t miss about marketing is generally when you’re in these multifunction organizations, whenever stuff goes wrong, they point to marketing. When in doubt blame the marketing guy. So I don’t miss that that much.

The thing about being in my role is that it’s a lot of fun. When you’re in a functional leadership role like marketing or as head of sales, you can influence things but it’s still not the same as when if I have to insert myself now, [that] this is the way it’s going to be.

There’s a joy that comes from the autonomy and there’s a joy that comes from the control. If you think about it, when do people get anxious in their job? They get anxious in their job when they feel like they don’t have control. Now, one thing of my role is that I have a lot of control. That’s one area where I don’t have to be that anxious, so it makes this job kind of fun.

NJBIZ: You started working as a marketing manager at Quaker when you were about 30. If you could go back and meet 30-year-old Paul Chibe, what advice would you give yourself?

Chibe: Relax a bit more. Sometimes you get anxious about things that, when you look in hindsight, weren’t necessarily that big of a deal, right? I would give him the advice [to] be a bit more patient but not too much, because why I’ve been successful is that I’ve pushed to get things done.

I probably would give this advice to myself back then and to a lot of people who come up in the careers that I have: Don’t forget to enjoy life. It’s easy to get wrapped up in your work, it’s easy to get wrapped up in your professional responsibilities, but then you forget about your personal ones.

It’s really important that, especially for young people, to have a focus in the career and have ambition to be successful, but also to make sure you put proper attention on your personal life, your family and the other things to keep the balance.

NJBIZ: You’ve worked for so many name-brands in your career. Do you still buy Quaker and Bud Light?

Chibe: There’s a brand loyalty. You always follow the companies that you worked for.

For example, right after I left Quaker, it got acquired by Pepsi. Through my knowledge of Quaker, of the people I know at Quaker, I got to know Pepsi quite well. If you talk to people who’ve worked in CPG, there’s this loyalty to the brands that they’ve worked on and you keep that interest through your career.

NJBIZ: When you were just getting in college, where did you want to be? Here you are, the CEO of a huge company. Is this what you wanted?

Chibe: I wanted to be a leader just by nature. I started my career in finance, but as I worked in finance and I got exposed to the commercial organization, it became clear to me that the fun was in the commercial jobs — being on the playing field, making a difference, driving what happens.

I had the opportunity at [candy company] Leaf to work with the VP of marketing and he actually said, “hey I think you would be pretty good at marketing” and encouraged me to apply for a role in marketing that I ended up getting. That was a fundamental transformational thing that happened in my life.

Looking back, that conversation with him put me on the path to get here. Then there were other people that made big differences in my life in terms of pointing me in the right direction.

NJBIZ: In the future, however long down the road it is when you retire, what do you want your legacy to the industry to be?

Chibe: First off, I want to be viewed as someone who successfully created and managed many businesses. I’ve been pretty lucky that I’ve started and worked on many brands that have been successful over time. That I’m very happy about.

The other thing is that I want to have an impact on people I work with, and that my leadership of people has created for them a lot of opportunities and that they’ve been able to achieve the things they aspired to achieve through working for or with me.

And I think the other one is be perceived as someone who taught people and was fair with people and helped people.

 

Read the full article here.

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