Sugar rush: Ferrero and Hostess battle it out for Kellogg’s line of Keebler cookies

Hostess and Ferrero are both competing to acquire Kellogg’s Keebler to help revamp the neglected cookies.

March 26, 2019

CNBC reports that Hostess and Nutella-owner Ferrero are going head to head to buy Kellogg’s Keebler (and a few other brands) — a deal expected to weigh in at roughly $1.5B.

The talks come as struggling snack giants like Kellogg’s pare back brands that were neglected in favor of maintaining the breadwinners — a trend that both Hostess and Ferrero aim to take advantage of. 

Somebody get Ernie Keebler on the phone!

As trendy competitors like the healthy(ish) Kind Bar continue to encroach on the goodie brands of old, companies like Hostess and Ferrero believe they can revive and replant the elves in a better, sturdier tree.

Kellogg’s acquired Keebler in 2001 for $4.4B. At the time the cookie brand had a “direct-store delivery” platform, which gave Kellogg’s more control over how the product is displayed in grocery stores. But, as in-store cookie sales dropped, the company had to cut the platform. 

Kellogg’s still has a market cap of $19.5B, but its shares have fallen 11% over the past year.

All it takes is a little TLC

Ferrero and Hostess believe they are the ones to revive the creamy cookie with a little investment love and attention — Ferrero bought Nestle’s US candy business for $2.8B last year, and has since breathed new life into Butterfinger. 

In the meantime, Hostess has been focusing on adding new treats to its resume, which already includes American junk-food staples such as Twinkies and Ho Hos.

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