Italy has captured the ice cream capital of the world.
The family owners of Northwest Iowa-based Wells Enterprises, the ice cream maker best known for its Blue Bunny brand, announced Wednesday that they will sell the business to Italy-based Ferrero Group, one of the world’s largest food manufacturers.
The deal gives Ferrero, which owns brands such as Nerds, Butterfingers and Nutella, control of one of the largest US ice cream makers. The sale, the terms of which no private company has disclosed, also marks the end of the Wells family’s 109-year ownership of the company.
Over three generations, the family grew the business from a small, milk-dispensing operation to an ice cream giant with brand names like Bomb Pop and Halo Top and factories in Nevada and New York. The work was crucial to Wells’ headquarters in Le Mars, a rare Iowa micropolitan community that hasn’t lost residents in recent years.
Wells Enterprises has its own office and two factories in Le Mars. The company pledged to expand there in May. In a sign of how important the business is to the community, in 1994 the Iowa Legislature passed a bill to designate Le Mars the “Ice Cream Capital of the World,” and the city has become a frequent stop for presidential candidates. Iowa caucuses. The Wells Visitor Center and Ice Cream Parlor attracts approximately 200,000 people each year.
In an interview with the Des Moines Register, Wells Enterprises CEO Mike Wells said Wednesday that Ferrero executives are committed to northwest Iowa.
“They need all of our staff,” he said. “They need all of our management. They need all of our assets.”
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Wells would step down as CEO in 1913, ending the family leadership that had belonged to his great uncle. He will continue to be involved as a consultant.
Company president Liam Killeen, who joined Wells Enterprises in 2014, will become the ice cream maker’s new CEO. Killeen came to the company after running Minnesota-based Ferrara Candy Co., which Ferrero bought in 2017.
“Ferrero’s brands and world-class reputation for quality align perfectly with what has made Wells so successful – and together we will continue to be even better,” Killeen said in a statement.
Giovanni Ferrero, the company’s executive chairman, said in a statement: “I am delighted that Wells has agreed to join the Ferrero Group. This represents a win-win partnership that brings together ice cream specialists and confectionery champions.”
Wells Enterprises started with a single wagon
The family business was founded in 1913 by Fred H. Wells Jr. began modestly as Wells’ Dairy when he 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 distribution company, a business they sold to a competitor in the 1920s. When the family rejoined the ice cream business a decade later, they no longer had rights to the name of their old business. They held a contest offering $25 for the best idea. A Sioux City man successfully lobbied for Blue Bunny.
The company sold other dairy products such as milk, curd and sour cream. Wells’ Dairy built a new ice cream factory in 1950, followed by a liquid milk processing plant in 1963, according to the company’s history in Family Business.
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The company continued to expand in the 1980s, adding new corporate offices and a second factory in Le Mars. In 1985, City Administrator Jim Payne credited frozen food processor Wells and Harker’s with keeping the city afloat during the farm crisis.
“People are realizing how valuable the industries are to Le Mars, that they’ve helped it thrive despite what’s happening in other Iowa cities,” Payne told the Register at the time.
In 1985, Wells employed 430 people at Le Mars. As of April, Well’s local employment stood at about 2,500, according to the Iowa Economic Development Authority.
Likewise, the city’s population has grown from about 8,000 in 1985 to about 10,000 today. Although the city’s growth has been modest, Le Mars is faring better than many communities around Iowa, especially cities of similar size that have shed their population over the past two decades as manufacturers have moved away.
On Wednesday, Mike Wells said he and his family are confident the local workers are in good hands.
“This was more about an opportunity for employees to do the right thing for our community and our families than an opportunistic transaction,” Mike Wells said.
The growth of Wells Enterprises made it difficult for the next generation
Wells said he began thinking seriously about the company’s future in 2013 while attending the company’s 100th anniversary celebration. In fact, according to the Financial Times, the family began receiving offers for the purchase a year ago. (Wells declined to comment on that report Wednesday.)
Either way, Wells said he knew the company needed an outside suitor as it continued to expand. According to Family Business, the family agreed to a corporate restructuring in 2006. Instead of a collection of cousins running various operations, as had been the case for decades, the family agreed to operate with just one leader.
Wells took over as CEO from his cousin Doug Wells. The family committed to hiring more outside managers. They also agreed to hire three non-family board members.
“We know the weaknesses of native family management,” Doug Wells told Family Business.
In addition, company executives decided to focus more narrowly on ice cream and other frozen desserts. In 2008, the company sold a dairy factory to Dean Foods and a yogurt factory to LALA Group.
It recently bought ice cream factories in Nevada and New York, and in 2019 it bought low-calorie frozen dessert brand Halo Top. Although the major players in the ice cream industry, Like Wells, are private companies, it makes it difficult to get information. , Wells previously stated that the moves made the company the second largest ice cream maker in the country behind Unilever. Wells announced another expansion at Le Mars in May.
Mike Wells said Wednesday that the company’s expansion poses a challenge for the family’s next generation of potential executives.
“Given the size and scale of the business, the incredible personal responsibility and time demands, there was no one in the next generation who was interested in running the day-to-day business,” he said. “That’s how we ended up here.”
The deal came together after a visit by the Ferrero chairman to Le Mars
According to him, his relationship with Ferrero managers began in 2019, when he traveled to Europe to observe new trends in the frozen dessert industry. He said his bankers at UBS Group AG had contacted them.
Ferrero owns 35 brands, including Kinder and Tic Tac. According to the report, the company employs 38,000 people in 170 countries. The company employs 8,000 people and operates 18 factories in North America.
Initially, according to Mike Wells, the parties discussed a potential partnership that would allow Wells’ ice cream makers to use Ferrero brands. Like Wells, Ferrero has been aggressive in recent years buying US candy, chocolate and cookie makers.
Mike Wells said he was friends with the company’s CEO, Giovanni Ferrero. Like Wells, Ferrero is a third-generation owner of his family’s company, based in the small town of Alba in northwestern Italy. (Giovanni Ferrero is worth $41.8 billion, according to Bloomberg, making him the 28th richest person in the world and the richest in Italy.)
In a call in January, Wells said he had invited Ferrero to Le Mars, an offer the latter had made in June. During the visit, he said Ferrero fell in love with the city.
According to him, the parties have been negotiating for the last six months to reach an agreement. He said his family believes the Ferrero organization is in line with the brand’s heritage.
“Collectively, our family decided the best thing we could do for our business was to build it for the future,” Wells said, “with an ownership group that can and will invest behind it.”
Tyler Jett covers jobs and the economy for the Des Moines Register. Contact him at tjett@registermedia.com, 515-284-8215 or on Twitter. @LetsJett.