Nutella’s globalization

by Lena Ariño

nutella

 

Nutella is a product known by everyone, sold around the world.  The international success of this product is so huge that the OECD (Organization for Economic Cooperation and Development) decided to use it to illustrate the functioning of global value chains. Apparently Nutella is a perfect product able to explain the globalization. At least in the food area; not just because it is sold in many countries, but the ingredients come from many different parts of the world.

It is made by Ferrero International S.A (Italy). The first jar of Nutella was made in a factory located in Alba in Italy.  Currently this delicious product is marketed in 75 countries. There is a 250,000 tons of Nutella produced within nine factories located around the world.

This nut and cocoa cream have become an example of how the factories work, in this new age of globalization and how companies organize production´s chains for raw materials around the world and how they built factories near the major consumer markets. Its production is internationally fragmented. And its fragmentation allows brands to become more powerful, efficient and achieve greater international competitiveness .The packaging plastic and skin milk are the only materials which are obtained locally at each factory. The other ingredients are supplied globally: hazelnuts come from Turkey, the Malaysian palm oil, cocoa from Nigeria, sugar from Brazil or Europe and French vanilla flavoring.  The production of hazelnut cream, is strategically located close to end markets where there is a high demand for Nutella. For example, today there is no factory in Asia because there is not much demand in that region.

This means that more than six countries are needed to develop a jar of Nutella. It mean that if I buy this product in my city (Zaragoza), this jar of Nutella have travelled around 250.000 kilometers. The effect that this kind of “Globalization product” produce on the environment is obvious.

You can see a map where is marked with a blue hexagon headquarters company, a green circle identifies the major international suppliers, with a red triangle and factories are identified with a cross lilac major sales offices.

nutellaimagen

 

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