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The story of the Espírito Santo giant founded by German immigrant Henrique Meyerfreund, marked by family disputes and a controversial sale to Nestlé after a long dispute at CADE.
Who would have thought that candy sold by boys would become one of the largest chocolate factories in the world? This is the story of Garoto. The company survived family crises and World War II. The war led its founder, Henrique Meyerfreund, to prison.
Brands such as Batom and Serenata de Amor conquered Brazil. But internal rivalries led to a corporate coup. The family lost control to Nestlé, after a controversial decision by CADE.
Henrique Meyerfreund's journey from Germany to Brazil
The founder of Garoto was Henry Meyerfreund. He was a German immigrant. He arrived in Brazil in 1921, fleeing the difficulties of post-World War I Germany. His initial destination would be the USA, but it was not possible. On the ship, he met a Frenchman who was coming to Espírito Santo.
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He accepted the invitation and came to work as a surveyor's assistant. He quickly learned Portuguese. After a year, he contracted malaria. He was helped by a compatriot, Wilhelm Meyer. After recovering, he worked in Meyer's coffee roasting factory.
Garoto is born: from boys' candies to the chocolate factory
Working in the roasting, Henry Meyerfreund envisioned his own business: candy. There was little competition and demand was high. In 1926, Meyer gave him a machine to start. Henrique returned to Germany to learn more, but his first attempt failed. He returned to Germany for another year of internships in candy and chocolate factories.
Back in Brazil in 1928, he registered the company H. Meyerfreund & Cia. The first candies hit the market in August 1929. They were sold by boys at tram stops. The name “Balas Garoto” stuck and gave rise to the brand. Even with the 1929 crisis, sales continued well. The candies were cheap and tasty.
Expansion, innovation and the dark years of war
In the 30s, the business grew in Espírito Santo. Henry Meyerfreund He married Jeanette, daughter of Wilhelm Meyer. They had a son, Ferdinand. In 1934, with an inheritance, Henry bought chocolate machines from Germany. His sister Helena and brother-in-law Carl became partners. Chocolate production began in 1936, after delays in releasing the machines. The factory was located near cocoa producers. He launched the Extra Strong mint lozenge, a success. The factory expanded.
In 1938, Günter Zernig joined the company, contributing capital and helping with modernization. But the Second World War brought difficulties. Because he was German, Henry Meyerfreund was arrested for six months in Maruípe. The factory was subject to federal intervention. Henrique sent instructions from prison. The company survived thanks to the solidarity of Brazilian businessmen.
Succession of Henrique Meyerfreund, conflicts and the conquest of national leadership
After the war, Garoto resumed its growth. It adopted a policy of reinvesting profits. It launched the first filled bar. Later came Batom (formerly Leite Mel) and Serenata de Amor. In 1954, it pioneered Easter eggs in Brazil. Henry Meyerfreund needed to treat an illness in Europe. Günter Zernig took over the business, modernizing the brand and logistics. Upon his return, Henrique appointed Zernig as commercial director.
In the late 50s, he launched the yellow box of chocolates. In 1962, Günter Zernig died in a plane crash. Before that, he planned to change to a public limited company (SA). Henrique, in poor health, gave way to his sons Ferdinand and Helmut. In 1971, Helmut ousted Ferdinand with the support of his family. Contact between the brothers was limited. Henry Meyerfreund He passed away in 1973. Helmut formally assumed the presidency. The company grew significantly, verticalized production and began exporting. During the “economic miracle”, production soared. In the 80s, despite the crisis, Garoto invested in technology. In 1987, Garoto became the national leader in chocolates.
The fight for control of Garoto
The third generation of the families arrived at the company: Klaus and Monica (Zernig's children), Victor (Helmut's son) and Paulo (Ferdinand's son). Internal disagreements were constant. At the end of the 90s, Helmut Meyerfreund was removed from the presidency. The meeting was tense. A power of attorney gave power to other shareholders. Klaus Zernig and Paulo Meyerfreund led the exchange.
They claimed a drop in sales and loss of market share. They criticized Helmut's excessive focus on machinery. Helmut's intention to prepare his son Victor for the succession also caused friction. Helmut lost the support of his family, even though he held 40,2% of the shares. The case ended up in court.
The sale to Nestlé and the long battle with CADE
After the coup and the disputes, the family decided to sell Garoto in 2001. The bank Merryl Lynch coordinated the process. In 2002, Nestlé bought the company for around R$660 million. The merger would create a giant with more than 58% of the market. For this reason, in 2004, CADE (Administrative Council for Economic Defense) blocked the operation.
It required Nestlé to sell Garoto. It was an unprecedented decision. Nestlé appealed to the courts. It was a 21-year legal battle. During that time, Nestlé invested in Garoto, but was unable to fully integrate the operations. The market changed, with the growth of competitors. Finally, in 2023, CADE approved the acquisition, imposing restrictions on Nestlé.
Boy today: under the command of Nestlé
Under Nestlé's management, Garoto benefited from global infrastructure and expertise. It innovated based on its classics. It launched ice creams and cookies. It is currently managed by Liberato Milo, a Nestlé executive. The factory in Vila Velha (ES) is one of the biggest Nestlé in the world. It is the largest chocolate factory in Latin America. It has more than 100 products and more than 2.000 employees. Garoto's history is one of success, but it is also an example of a family business that had to be sold due to internal conflicts and succession problems.
Very good
Business Show,
Matter Show.
And today, what they have least in their recipes is cocoa, they are increasingly turning to chocolate-flavored sweets! Sad!
Like everything from Nestlé. A bunch of “fake” preparations that claim to have a “flavor of” but are far from it.
Today, Nestlé is one of the worst brands of food products and, worse, it pulls the market into this bottomless pit of worsening quality.
As a cashier who bought chocolates fresh from the factory, I find it incredibly sad to buy them from this terrible brand.
I've known about Garoto chocolates and the factory since I was little. It was a delicious chocolate back then. Today, the flavor of the chocolate has changed a lot. What a shame. The report was very good.
Well, they were also the best in terms of quality and flavor of the chocolates, but today they have no flavor at all. It's a shame.