Category Advisor: Canned and Packaged Foods—Nut Spreads: Ferrero USA

Despite limited shelf presence, Nutella has achieved impressive growth: Its 13-ounce product ranks among the top four SKUs in the nut spread category. To drive sales even higher, Nutella’s parent company, Ferrero USA, commissioned a category management best practice study during which numerous shelving options were tested.

From its research, Ferrero determined a category-enhancing strategy. After implementing these tactics, eight supermarket chains experienced Nutella sales increases ranging from 39 percent to 113 percent.

According to the research, shoppers want the hazelnut spread to be easier to find on shelf. To that end, retailers should place Nutella with mainstream spread items, according to Ferrero. Up to 98 percent of the time, Nutella is shelved next to slower-selling specialty items. After testing several options, Nutella placed next to peanut butter scored significantly better than sets with Nutella next to specialty items and preserves.

Placing Nutella eye level also influences sales. Up to 73 percent of retailers place Nutella on the top two shelves, which is difficult for most shoppers to reach; less than 10 percent of the time is Nutella at eye level.

To reduce out-of-stocks, Ferrero’s platform for Nutella guides retailers to determine the number of facings needed based on sales, profit contribution and turns. Out of the stores audited, 10 percent had out-of-stocks, and 29 percent of consumers surveyed had found out-of-stocks. Using advanced analytics, the research determined that limited facings contribute to out-of-stocks, which result in lost sales. The cost of Nutella out-of-stocks is more than two times higher than a leading peanut butter SKU.