Finding Gooey Goodness in Nutella's Huge Supply Chain

Nutella, the world’s best known hazelnut spread, is proud of its supply chain. And it should be. The buttery, chocolaty spread that was created by Ferrero and first commercialized in 1964 has withstood more than the test of time, in spite of its troublesome logistics and occasionally demanding customer base. It’s weathered damaging class-action litigation aimed directly at the heart of what the company says makes Nutella so special: its ingredients and the nutritional value of its concept. It weathered the storm because while companies were falling by the wayside during the 2008 recession, Ferrero was stoically gathering its resources for a new sustainability plan and planning for the next year.
Nutella’s supply chain (what it ingeniously calls its global value chain) is no slouch, either. The company gets its hazelnuts from Turkey, chocolate from Africa, palm oil from Malaysia, vanillin (a substitute for expensive vanilla) from France and sugar from Brazil. It’s an international operation that spans just about every continent across the globe. It’s fed children from the four corners of the earth (well, except large sections of Asia), and served as the favorite breakfast ingredient for meals-on-the-go for decades.

Yet admittedly, in a millennium when long, cumbersome and expensive supply chains are often treated as the nemesis to sustainable, eco-friendly marketing, Nutella’s brightly-colored infographic seems oddly out of place with today’s obsession with carbon footprints. The list of its production facilities (which number nine locations across the globe) reflect not only the company’s success in the past half-century, but also the challenges it continues to face in shrinking that eco-footprint.

Of course, a brightly-colored map of markers and accomplishments rarely tells a company’s whole story.  According to Nutella’s 2012 sustainability report, the company has been working hard to meet its own sustainability goals. It’s a board member of the World Cocoa Foundation, which supports the USAID-funded program African Cocoa Initiative. It reports that it is in the process of wrapping up its transition to 100 percent certified sustainable palm oil. It’s invested resources in a community school in the Ivory Coast, purchased carbon-neutral cocoa, partnered with a land trust organization in Ghana and delved into community training and development programs in several parts of Africa.

Since the company’s $3 million settlement of a 2012 class action that accused Nutella of not being up front with the percentages of that ingredient list and their nutritional value (which it turns out, was largely sugar, followed by palm oil and then hazelnut, with a high amount of saturated fat), Ferrero has learned a valuable lesson about transparency and public expectations. Although its sustainability reports started before the litigation came to light, it’s clear that Ferrero hasn’t misplaced the goal: to prove to global consumers that taste still triumphs. Nutella’s supply chain may be exceptionally long, but customers’ memories of the sweet, gooey spread will outlast it.

Image of Nutella jar by Allison.Hare

Image of map from OECD.