This case focuses on Ferrero SpA’s sustainable palm oil sourcing strategy in light of its acquisition of Nestlé’s U.S. confectionery brands, which in many ways does not comply with Ferrero’s sustainable sourcing commitments. The case reviews Ferrero’s rich family history, provides an overview of the confectionery industry, explains the environmental and social problems associated with palm oil production, discusses the Roundtable on Sustainable Palm Oil (RSPO) certification and whether it is truly sustainable, provides a competitor analysis of palm oil sourcing strategies, and reviews Ferrero’s sourcing strategy.
Adding complexity to the case, while the RSPO is a common standard among competitors for sustainable palm oil sourcing, there is discussion over whether it is truly sustainable, and if palm oil use in general can ever be sustainable. Overall, this case grapples with how the Ferrero Group should deal with their sourcing strategy in the midst of this dilemma between their acquired and native brands.