Italy has taken over the ice cream capital of the world.
The family owners of Northwestern Iowa’s Wells Enterprises, the ice cream maker best known for its Blue Bunny brand, announced on Wednesday they would sell the business to Italy’s Ferrero, one of the largest major food manufacturers in the world.
The deal gives Ferrero, which owns brands like Nerds, Butterfingers and Nutella, control of one of the largest ice cream makers in the United States. The sale, the terms of which no private company has disclosed, also marks the end of the company’s 109-year ownership by the Wells family.
Over three generations, the family has grown the business from a small milk distribution company to a huge ice cream maker, with brands like Bomb Pop and Halo Top and factories in Nevada and New York. The business has been vital to the headquarters city of Wells, Le Mars, the rare micropolitan community in Iowa that hasn’t lost residents in recent years.
Wells Enterprises has its office as well as two factories in Mars. The company has undertaken to develop there from the month of May. In a sign of the company’s importance to the community, in 1994 the Iowa Legislature passed a bill to name Le Mars the “Ice Cream Capital of the World”, and the town has become a frequent stop among the presidential candidates during the Iowa Caucus. The Wells Visitor Center & Ice Cream Parlor attracts around 200,000 people a year.
In an interview with the Des Moines Register, Wells Enterprises CEO Mike Wells said Wednesday that Ferrero executives are engaged in northwest Iowa.
“They need all of our employees,” he said. “They need all of our management. They need all of our assets.”
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Wells will step down as CEO, ending a string of family leadership dating back to his great-uncle in 1913. He will remain involved as an advisor.
Company chairman Liam Killeen, who joined Wells Enterprises in 2014, will become the ice cream maker’s new CEO. Killeen came to the business after leading Minnesota’s Ferrara Candy Co., a company Ferrero bought in 2017.
“Ferrero’s brands and reputation for world-class quality are a perfect match for what has made Wells successful – and we will be even better together in the future,” Killeen said in a statement.
Giovanni Ferrero, Executive Chairman of the company, said in a statement: “I am delighted that Wells has agreed to join the Ferrero Group. This represents a win-win partnership, bringing together ice cream experts and confectionery champions. .”
Wells Enterprises started with a single wagon
The family business began modestly as Wells’ Dairy in 1913, when Fred H. Wells Jr. bought a horse-drawn wagon and delivered milk in northwest Iowa. His brother Harry C. Wells joined the business, as did his sons.
They added an ice cream dispensing business in the 1920s, a business they sold to a competitor. When the family joined the ice cream business the following decade, they no longer had the rights to their former company’s name. They held a contest, offering $25 for the best idea. A man from Sioux City successfully lobbied for Blue Bunny.
The company sold other dairy products, such as milk, cottage cheese and sour cream. Wells’ Dairy built a new ice cream plant in 1950, followed by a fluid milk processing plant in 1963, according to a company history in Family Business.
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The company continued to expand into the 1980s, adding new headquarters and a second factory to the Mars. In 1985, City Administrator Jim Payne credited Wells and Harker’s, a frozen food processor, with keeping the city alive during the farm crisis.
“People understand what industries are worth to Le Mars, that they help it thrive despite what’s happened in other cities in Iowa,” Payne told the Register at the time.
In 1985 Wells employed 430 workers at the Mars. By April, according to the Iowa Economic Development Authority, local employment in Well had risen to about 2,500.
Likewise, the city’s population has grown from around 8,000 people in 1985 to around 10,000 today. Although the town’s growth has been modest, Le Mars is in a better position than many communities around Iowa, especially towns of a similar size that have lost population over the past two decades with the departure manufacturers.
On Wednesday, Mike Wells said he and his family were confident local workers were in good hands.
“It was more about the opportunity to do the right thing for our community of employees and our families than an opportunistic transaction,” Mike Wells said.
The growth of Wells Enterprises has made it more difficult for the next generation to operate
Wells said he began to seriously consider the future of the business when he attended its 100th anniversary in 2013. In fact, according to the Financial Times, the family began soliciting offers to buy l ‘last year. (Wells declined to comment on that report on Wednesday.)
Either way, Wells said he knew the company needed an outside suitor as it continued to grow. The family agreed to a corporate restructuring in 2006, according to Family Business. Rather than a collection of cousins running various operations, as they have for decades, the family has agreed to operate under one head.
Wells took the reins as CEO from his cousin, Doug Wells. The family has agreed to hire more outside managers. They have also agreed to hire three board members from outside the family.
“We know the weaknesses of inbred family management,” Doug Wells told Family Business.
Additionally, business leaders decided to focus more closely on ice cream and other frozen desserts. The company sold a dairy to Dean Foods and a yogurt maker to Grupu LALA in 2008.
More recently, it bought ice cream factories in Nevada and New York and bought the low-calorie frozen dessert brand Halo Top in 2019. Although major players in the ice cream industry, Like Wells, are private companies, making data difficult to obtain. Wells previously said the moves made the company the second-largest ice cream maker in the country, behind Unilever. Wells announced a new expansion in The March in May.
Mike Wells said Wednesday that the company’s expansions posed a challenge to the family’s next generation of potential leaders.
“Given the size and scale of the business and the incredible personal responsibility and time demands, there was simply no one in the next generation who had any interest in getting involved in business. daily,” he said. “That’s how we ended up here.”
The agreement was reached after the visit of the president of Ferrero to the Mars
He said his relationship with Ferrero managers began in 2019, when he traveled across Europe to observe new trends in the frozen dessert industry. He said his bankers at UBS Group AG put them in touch.
Ferrero owns 35 brands, including Kinder and Tic Tac. The company employs 38,000 people in 170 countries, according to a press release. In North America, the company employs 8,000 people and operates 18 factories.
Initially, Mike Wells said, the two sides discussed a potential partnership that would allow Wells’ ice cream makers to use Ferrero’s brands. Like Wells, Ferrero has been aggressive in recent years, buying up American candy, chocolate and cookie makers.
Mike Wells said he befriended Giovanni Ferrero, the company’s executive chairman. Like Wells, Ferrero is the third-generation owner of the family business, based in the small town of Alba in northwest Italy. (According to Bloomberg, Giovanni Ferrero has a net worth of $41.8 billion, making him the 28th richest person in the world and the richest person in Italy.)
During a January call, Wells said she invited Ferrero to the Mars, an offer the latter accepted in June. During the visit, he said, Ferrero fell in love with the city.
He said the two sides had been negotiating an agreement for six months. He said his family believes the Ferrero organization is the right fit for the brand’s legacy.
“Collectively, our family decided the best thing we could do for our business was to prepare it for the future,” Wells said, “with a group of owners who could and would invest behind it.”
Tyler Jett covers jobs and the economy for the Des Moines Register. Contact him at email@example.com, 515-284-8215, or on Twitter at @LetsJett.
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