In case anyone needed another justified reason to eat Nutella, today, February 5th, is World Nutella Day, a day where Nutella lovers can pay particular homage to this beloved product. This year, Nutella also celebrates 60 years of existence!
World Nutella Day synced up perfectly with my international marketing lesson this past week, so with my students we celebrated a bit early with a Nutella tasting (my class is at 2 pm so it’s the perfect after lunch, please don’t fall asleep in my class snack) and analysis of why this product is such a global success… especially after almost 6 decades of existence!
After seven years as an International Marketing professor with USAC (Universities Study Abroad Consortium) in Verona, I often feel the need to evolve my lessons and give the students more hands-on experiences and practical examples. It’s true that marketing is a science, and therefore the principles and concepts are forever the same, however their applications through the years change drastically, not only because of the globalization of markets, but also because of disruptive technologies, fast-paced innovation and even social impact.
I decided this semester to open each lesson with a business case, an example of an international marketing success or failure that we can discuss, or even experience.
This week: the global expansion of Nutella.
To start, I asked some easy warm-up questions:
“Who owns Nutella?”
“In what country did Nutella originate?”
For the record, all of my students are familiar with Nutella and have had it before. In any case, I would say that only about a handful of my 22 students knew that Nutella was part of a bigger company (Ferrero) and that maybe around half knew that its origins lie in Italy. The name Nutella, by the way, comes from “Nut” plus the Italian diminutive “ella”, so basically “little nut”.
Next question, “why do you think Nutella has been a successful brand globally?”
“It’s delicious.”
“It’s healthy-er than typical American snacks”
“You can eat it in many different ways.”
“Kids love it.”
Nutella’s success is due to innovation, global value chain and, surprisingly, the “promotional life cycle” as Nutella executive management will go on to claim.
The decision to try hazelnut as an ingredient was an innovative solution to finding an alternative to a scarce and costly cocoa product in the post-World War II era. The product itself has not changed in over five decades consisting of 55 percent sugar and 13 percent hazelnut. In most global markets, we can consider Nutella a classic cash cow product. Over the years, the company has managed to take advantage of global value chains to source raw ingredients and maximize its manufacturing and distribution processes, in turn leading to a quality product with efficient production that keeps costs under control.
Where Nutella has claimed to have the most success is not in mastering the product life cycle but the promotional life cycle.
“The product life cycle has been replaced by the promotional life cycle. Iconic brands manage to stay young forever, because they bridge generations and establish an emotional relationship with the consumer.”
Therefore, what is the lesson I wanted to get across to my students?
Nutella has not changed its product in over 50 years, and from its Italian heritage has grown its global presence to over 75 countries and sells a jar of Nutella every 2.5 seconds around the world. Even though Nutella is a food item and can be considered a basic physiological need (according to Maslow), it’s not really a “necessity” food item.
So, then why does generation after generation continue to demand it?
It was time for the tasting.
Each student was given an individual packet of Nutella (0.52 oz), a packaging format my students had never seen before. For anything wondering, they were sold in my local Italian supermarket in blocks of 6 packets for €1.49. For my American students, this was considered “cheap”.
Nutella is known as a “spread”, so I purposely bought “fette biscottate” which is a very Italian product and I am not even sure how to translate it, maybe toasted bread biscuits?
Upon the Nutella tasting, each of the students had two Post-Its and they had to respond to two prompts:
“List adjectives you would use to describe Nutella”
“In one word, describe your relationship with Nutella”
Among the various adjectives, we were able to lump them into some common categories: delicious, creamy, sweet in relation to its taste, addicting came up quite often, energy and rejuvenating were mentioned. Some students said it has a “European” feel as a product. It’s a product that generally appeals to the masses.
But what about our relationship with Nutella?
Guilty pleasure, guilt-free, nostalgic, addicting, give and take, complicated, reliable and trustworthy.
While Italians typically have that nostalgic relationship with Nutella as the snack from their childhood, always having a jar in the house, always having it at birthday parties, it is interesting to see how this type of relationship has started to shift to the American market as well.
Three marketing takeaways for the business case:
To stay relevant over time, you need to be innovative, but not necessarily in your product life cycle. Positioning, messaging and channels need to be aligned.
You can have global success without modifying your product or business model: consumers seek intangible, emotional connections.
Make the global local.
Happy World Nutella Day!