Global Flowellas

Nutella is sold in 75 countries around the world and is consistently growing in sales. The Italian company introduced the tasty product to the American market in 1983. The factory in Brantford, Canada produces the jars of Nutella for Canada and the United States which is then sent to Somerset, New Jersey as the exclusive distributing location (History of Nutella). The product is mainly popular in North America (excluding Mexico), Europe and Oceania. Nutella’s international website lists twenty nine countries. It contains pages for countries like Canada, United States, Australia, and most of the countries in the European Union. East and Southeast Asian countries do not have a website for Nutella. This shows the lack of a demand in those regions as Ferrero has not invested in advertising and online marketing for those parts of Asia. Since Europe has a high demand for Nutella, the other forty six countries which sells the product would most likely be European nations, though a list of the other countries does not exist. Since Brazil and Argentina have Nutella factories within their borders and as OECD revealed that Nutella is produced near their markets, one may deduce that those two countries distributes the chocolate spread to unlisted Latin American countries.

Ferrero is solely in charge of trade and distribution of hazelnuts as of July 2014. The company strives to enhance the quality of their product and maintain their reputable flavor by intensifying their presence in the market of hazelnuts. According to Ferrero’s website, though the purchase is pending approval, the company “has acquired 100% of the family-owned Oltan Group. . . [which] is the worldwide leading operator in the procurement, processing and marketing of hazelnuts, with an annual turnover above $500 million” (Ferrero Group). This displays their dedication to preserving the decadent quality of their products. The purchase of Oltan Group by Ferrero also signifies the beginning of a sustainable approach to the hazelnut industry in Turkey as Ferrero would implement sustainable agricultural practices in line with the Ferrero Farming Values (FFV) which is focused on “enhancing farming skills of all farmers and improving their possibility of revenue increase” (Ferrero Group). Those who follow neoliberalism would commend Ferrero’s decision to make use of comparative advantage, the economic theory that states that countries should focus on what they do best in order to achieve maximum efficiency in the world market.

In recent years, weather contributed to the increase of the price of Nutella. Because Turkey produces the majority of the world’s hazelnuts, any disturbances in the climate would affect the hazelnut industry. In 2014, the unreliable weather of Turkey has directly influenced the price of hazelnuts, causing “what could be a hazelnut crop that’s more than 30 percent below original expectations which resulted in an increase in price “by more than 60 percent so far this year and more than doubled since last fall” (Ferdman). Murat Keskin, the head of chamber of commerce in Giresun, Turkey states that “we are living through the worst hazelnut harvest in history” since Turkey normally cultivates about 590,000 metric tons of hazelnut a year, but the country anticipates a harvest of 370,000 metric tons this year (Nuts). Ferrero is able to combat the issue immediately due to the acquisition of Oltan Group, which protects the company from the hazelnut supply issues. Other factors that contribute toward the price of Nutella includes palm oil, which has similarly increased in price due weather related issues and an increase in demand, and cocoa, which has seen a 40 percent increase in price (Ferdman).

A political agreement which affects the trade of Nutella is France’s “Socialist plan to quadruple the tax on palm oil . . . from 19.6 percent to 20 percent”; The sales tax targets consumer goods as opposed to certain corporations and since France consumes the most Nutella in the world, the tax has been labeled as the “Nutella tax” (Zaretsky). Another political agreement which excludes Indonesia from the Nutella trade is the creation of the Roundtable on Sustainable Palm Oil. As previously mentioned, Ferrero only imports palm oil from Malaysia since their palm oil is RSPO-certified. This shows that Ferrero is willing to go the extra mile to ensure its quality product by spending more on Certified Sustainable Palm Oil from Malaysia as opposed to non-certified palm oil from Indonesia.

With the tons of hazelnuts cultivated in Turkey, the hazelnut shells are reused for biomass fuel. This is reminiscent of the “chock-chocky” furniture created by migrant workers of Bangladesh. According to Gregson, migrant workers in Bangladesh are skilled craftsmen or are in the process of learning the trade. They take board and wood from totaled ships and create them into recycled furniture (Gregson). This gives the Bangladeshi people a source of cheap, moveable furniture which gives it a sense of cultural value apart from its monetary value. Ferrero’s use of hazelnuts from Turkey contributes to the recycling of hazelnut shells for biomass fuel. According to Bakisgan, it was reported that “the analysis of trace elements in ashes produced from some biofuels obtained from various areas of Turkey such as hazelnut shell” (Bakisgan). This shows that the consumption of Nutella around the world produces hazelnut shells which indirectly contributes towards recycled energy in Turkey just as Bangladeshis reuse broken wood from ships for furniture.