Nutella: Sweet Success

Written by Phin Upham

Nutella is an Italian company that markets a chocolate hazelnut spread popular in many parts of the world. It all started in a bakery in Alba, a part of Italy known for its production of hazelnuts. Pietro Ferrero sold a 660 lb block of “Pasta Gianduja” in 1946, which was more or less solid nutella.

By 1951, he’d managed to manufacture a creamy version that he bottled and sold as “Supercrema.”

Michele, the son of Pietro, changed the composition of the spread and renamed the creation “Nutella.” Michele wanted to expand his father’s operations and sold his first jar of the new formula in 1964. The European market immediately embraced Nutella and the product was an instant success that has remained popular into modern times.

France attempted to cash in on the movement at one point, raising taxes on palm oil by up to 400 pounds. The media dubbed the move “the Nutella tax,” because Nutella is made up of 20% palm oil.

Today, Nutella is put onto just about anything. In Canada, it’s common to order a croissant with Nutella spread and Americans use it frequently in desserts. Contrary to legend, however, Nutella is not a health food.

That fact was misconstrued by the American public when Nutella marketed itself as “part of a nutritious breakfast.” Nutella was hit with a class action lawsuit where the company was forced to pay out $3 million in damages, or about $4 per bottle of returned cream.

Although Nutella is not considered a health food, it is extremely popular. This year, mark your calendar for World Nutella Day on February 5th.

Phin Upham is an investor from NYC and SF. You may contact Phin on his Twitter page.