SWOT ANALYSIS

NUTELLA

SWOT analysis of Nutella examines the brand by its Strength, Weaknesses, Opportunities, and
Threats. The strengths and weaknesses are internal factors whereas opportunities and threats are
external factors. Using the SWOT Analysis management paradigm, a company like Nutella can
compare its operations and performance to those of its rivals.

Strengths:

The key elements of Nutella's business that provide it a competitive edge in the market are
examined in terms of its strengths.

Quality Ingredients: Nutella is distinguished from other chocolate spreads by its original hazelnut
and cocoa flavor, which is enhanced by its unique richness. It is made up of seven premium
ingredients that were carefully chosen and sourced from sustainable and genuine sources. It is more
than simply a chocolate spread because it also contains hazelnuts, which are rich in protein, fibre,
and antioxidants in addition to cocoa and milk.

Presence around the globe: More than 34,000 people work for The Ferrero Group at locations
spread across 53 nations. The business has about 20 production facilities throughout the globe and
has distribution channels in more than 160 nations. They sell 250,00 tonnes of Nutella every year.
Despite its somewhat slack promotional strategy, Nutella continues to have a solid position in the
minds and hearts of its customers. Over the past few years, the Nutella cult has only become bigger
and bigger, eventually reaching a manic level of popularity. Nutella appears set to invade the United
States and surpass peanut butter as the top spread.

Positioning: As an alternative to peanut butter, jam, or cheese spread, Nutella has carved out a niche
for itself as a morning spread. Additionally, the spread is promoted as a topping for cookies, cakes,
and pastries that call for a creamy, nutty flavour. It can be consumed in a variety of ways and on a
wide range of different foods, including bread, fruits, bagels, doughnuts, and crackers. It can be used
on anything and anything, increasing the likelihood that a consumer will be happy with the end
result. With premium ingredients, Nutella is a premium product that provides both nutrition and
flavour.

Right target segment: The perfect family-friendly breakfast spread is one that includes Nutella. Their
advertising, which frequently feature a family eating breakfast, have been successful in enhancing
their reputation as a family-friendly breakfast option. This is a plus because most people in today's
busy world are searching for a quick but wholesome way to spruce up breakfast, and Nutella delivers
just that. It appeals to a wide variety of people, not just specific segments. The popularity of Nutella
extends across a wide range of demographics, from young toddlers to mature upper middle-class
adults. Due to the wide appeal of Nutella, there are other lucrative prospects available, so they are
not limited to relying just on sales from a niche market.

First mover advantage: Though Nutella didn’t create the spread category, and perhaps not even the
hazelnut spread category, it is probably the only product of its kind that consumers have the ability
to recall. It capitalized on its first mover advantage and conquered new opponents.
Strong following on social media: The social media boom has been extremely beneficial to the
Nutella brand. A variety of breakfast dishes, including those that incorporate Nutella, have grown
popular on the internet and have a sizable fan base. Nutellas website provides 40 different quick,
easy, and tasty recipes.

Weaknesses:

Some of the key weaknesses of Nutella are:

Limited reach: Nutella is marketed as a sandwich spread which is an image that works in the
Western World where breakfast is primarily bread, rolls or buns. However in countries like India,
Pakistan, or China where they are trying to penetrate, bread is not a significant breakfast item and
thus they may need to rebrand themselves. Moreover, it is mainly used as a breakfast item hence its
usage is limited. The fact that they are only connected with breakfast is one association that Nutella
established that was helpful initially but is now impeding or limiting them. Being in charge of
breakfast for any brand or business is no easy undertaking, but now that they are attempting to
expand, many view them as only being competent in the breakfast industry.

Expensive: Nutella is higher-priced compared to its peanut-butter spread competitors. The easiest
way to categorise spreads is probably to include both peanut butter and Nutella. They compete with
one another because they are utilised in nearly identical circumstances. Given that they may be
swapped out for one another, peanut butter may become a more appealing option than Nutella if
the economy is looking bleak and families are forced to spend their money more carefully.

Health risks: The use of palm oil in Nutella and the potential cancer risks that go along with it
brought Ferrero a lot of criticism. Customers now have many questions about whether the spread is
safe to eat due to the spread's unfavorable exposure. Palm oil is said to increase chances of
developing cancerous tumors. Moreover, many individuals are skeptical to think that Nutella
genuinely provides all of the health advantages it advertises. This is partly due to the fact that
Nutella is simply so delicious. Between providing amazing value and making unproven product
claims, Nutella straddles a fine line. Consumers' concerns about Nutella's healthiness are probably
well-founded, and Nutella shouldn't try to dispel them or even go so far as to outright lie about it.
Without eventually wanting to offer a reduced fat line extension, something that all the larger
peanut butter makers currently do, Nutella will not be able to overcome this vulnerability.

Poor Advertising: Despite the fact that the public adores Nutella to the hilt as compared to the
number of ardent fans, its brand breadth is still relatively small. Actually, despite its awful
advertising, Nutella is still widely consumed. Advertisements must promote the notion that Nutella
is a brand that consumers should be excited to associate with. It needs to be widely advertised with
TV commercials, in store samples, promotions, and coupons.
Opportunities:

Some of the opportunities that Nutella can tap into are:

Awareness of global taste: Globalization of eating has made regional tastes less important. Many of
the Asian countries, for example, are trying to imitate the western world and the consumption of
bread as a breakfast item has increased. This will create a proportional surge in the demand for
breakfast spreads.

Lack of time: People are searching for quick, healthful snacks to eat on the go as they have less time
to cook as more women are entering the job. Additionally, this will increase the need for sandwich
spreads. People have less time to cook in the morning, and want to make something that is quick.
Nutella hazelnut spread solves this problem. All one has to do is spread it on bagels, bread, muffins,
crackers, anything. It is fast and add instant flavor to any breakfast.

Expansion: Nutella has the opportunity to generate more revenue through of opening of more cafes.
Their current café in Chicago is doing very well.

New Flavors: Nutella should create different flavored spreads. This could potentially bring new
customers and therefore generate more revenue.

Threats:

Some of the risks associated with Nutella are:

Cheaper alternatives: The fact that Nutella is the most expensive option on the market is one of its
main flaws. If Nutella were plotted on a perceptual map, it would be clear that, in contrast to
Nutella, which has a high taste and high price, a competitor brand would be best served by offering a
product with above-average flavour at a lower price than Nutella. If someone were to introduce this
product to the market, especially during rough times economically, it is highly possible that they
would be able to undercut Nutella and take a significant portion of their revenues, both immediately
and over the long run.

Hazelnut allergies: Food allergies have been on the rise globally. One of the most common food
allergens in the world is tree nuts, and among those tree nuts that lead to allergic reactions are
hazelnuts which are in Nutella . Hence, these allergies can pose threat on Nutella business. With the
rate of people being affected by allergies only increasing, one has to wonder when this pandemic
will get to the point where it will significantly affect Nutella’s profit margins, given that the spread’s
main ingredient is hazelnuts.
 Chocobliss

Strengths:

Price: Choco bliss price is reasonable as compared to nutella and other spread brands. So, for price
sensitive consumers it is an ideal choice.

Positioning: Choco bliss is positioned as an alternative to high end brands.

differentiation by product: Choco bliss has differentiated product by introducing more flavors. It is
available in two distinct flavours; Hazelnut Chocolate Spread & Milk Chocolate Spread unlike Nutella
which only as one version.

Weaknesses:

Low quality ingredients: Choco bliss uses substandard ingredients which is why people don’t like it as
much as they like Nutella. The hazelnut flavor as respondents in our survey said also is fake with
artificial flavourings and essence .

Thick consistency: Respondents also said that the consistency of choco bliss was very thick and
grainy as compared to Nutella. Due to coarse texture, it cannot be easily spreaded on toast or bread
which caused difficulty for consumers. It does not have velvety, smooth type texture.

Sweetness: Choco bliss is way too sweet when compared with other spread brands due to use of
artificial essence and high amount of sugar.

Opportunities:

Some of the opportunities that Choco Bliss can tap into are:

Expansion: Choco Bliss has the opportunity to generate more revenue through offering their product
worldwide, currently they are operating in selective regions, ramping up production and expanding
worldwide would significantly boost their business and brand value.

New Flavors: Choco Bliss should create different flavored spreads. This could potentially bring new
customers and therefore generate more revenue.

Social Media can be used for great exposure: While many brands in other industries are already
taking full advantage of Social Media, Choco Bliss have yet to tap into the full potential of using
Social Media regularly and intentionally. If they established a more consistent presence online, their
sales and the image of the entire industry would benefit from it.

Catering to different customer segments: They can offer large industry size jars as offered by Nutella.
And they should look at making a small one time use package so that a different segment of
customers can flow in.

Awareness of global taste: Globalization of eating has made regional tastes less important. Many of
the Asian countries, for example, are trying to imitate the western world and the consumption of
bread as a breakfast item has increased. This will create a proportional surge in the demand for
breakfast spreads.
Lack of time: People are searching for quick, healthful snacks to eat on the go as they have less time
to cook as more women are entering the job. Additionally, this will increase the need for sandwich
spreads. People have less time to cook in the morning, and want to make something that is quick.
Nutella hazelnut spread solves this problem. All one has to do is spread it on bagels, bread, muffins,
crackers, anything. It is fast and add instant flavor to any breakfast.

Threats:

Some of the risks associated with Nutella are:

Competition: Direct competition from well-established brands such as Nutella, Hershey’s and others
can pose a threat to Choco Bliss, they need to make sure they don’t lose their competitiveness in the
market.

Hazelnut allergies: Food allergies have been on the rise globally. One of the most common food
allergens in the world is tree nuts, and among those tree nuts that lead to allergic reactions are
hazelnuts which are in Choco Bliss. Hence, these allergies can pose threat on Choco Bliss business,
given that the spread’s main ingredient is hazelnuts.

Ingredients Prices: Fluctuations in chocolate and cocoa prices can adversely impact future
profitability.