Mars Inc.
M&M’s, Snickers, Milky Way, Double Mint, Ben’s Rice, Pedigree, Whiskas, VCA, Banfield… all the brands you know, owned by the company you know nothing about: Mars, Incorporated.
M&M’s, Snickers, Milky Way, Double Mint, Ben’s Rice, Pedigree, Whiskas, VCA, Banfield… all the brands you know, owned by the company you know nothing about: Mars, Incorporated. And Mars itself is 100% owned and deeply intertwined with the Mars family, who are currently the second wealthiest (and perhaps first most secretive!) family in the United States. This is one of the 20th century’s most incredible entrepreneurial stories across candy and pet care, and one that’s all the more incredible because it’s so little-known!
Kyle’s Rating - 8/10
This episode masterfully chronicles one of American business's most fascinating untold stories—the Mars empire built on family grudges, industrial innovation, and obsessive secrecy. Forrest Mars emerges as a relentless protagonist whose revenge-fueled empire-building makes for compelling drama, from working incognito in Swiss chocolate factories to orchestrating hostile takeovers of both his competitors and his own father's company. While the hosts deliver exceptional storytelling and deep research into this notoriously private corporation, the nearly 4-hour runtime occasionally meanders through subsidiary details that, while interesting, can drag a bit.
Company Overview
Mars, Incorporated - Founded 1911 in Minneapolis, Minnesota (Frank Mars' fourth attempt); headquartered in McLean, Virginia.
A privately-held global manufacturer of confectionery, pet food, and food products, generating over $50 billion in annual revenue, entirely owned by the Mars family.
Represents one of the 20th century's most remarkable entrepreneurial stories, building dominance in candy and pet care while maintaining extraordinary privacy.
Narrative
The Mars story begins with spectacular failure. Frank Clarence Mars, stricken with polio as a child, learned candy-making alongside his mother Elva while his father operated a flour mill. His first three candy ventures collapsed into bankruptcy, divorce, and destitution. By 1920, his fourth Minneapolis attempt finally succeeded as America's candy landscape transformed—Milton Hershey had established chocolate's dominance, creating a wholesale industry that enabled thousands of regional candy entrepreneurs.
Frank's breakthrough came from perfect timing, industrial technology, and family drama. The 1924 Milky Way, reportedly inspired by a malted milkshake, became the first truly industrialized candy bar, mechanized for round-the-clock production. This innovation bore the fingerprints of Frank's estranged son Forrest, who had transformed himself from a mining town orphan into a Yale-educated strategist with connections to industrial titans like Pierre S. du Pont. Their uneasy partnership yielded Milky Way, Snickers, and 3 Musketeers, generating $25 million by 1932 despite the Great Depression.
In 1932, family tensions exploded when Forrest demanded one-third ownership, only to be rebuffed by Frank. Forrest departed for Europe with $50,000 and foreign Milky Way rights, embarking on a masterclass in empire-building. He worked incognito in Swiss chocolate factories, systematically learning the scientific processes of chocolate making. He launched Mars bars in Britain, pioneered pet food through Chappel Brothers, and constructed a European empire that dwarfed his father's American operations.
Forrest returned to America in 1939 and unleashed an audacious revenge campaign. Unable to reclaim Mars Inc. directly, he partnered with Hershey executive William Murrie's son Bruce, creating M&M Limited (80/20 split). Forrest supplied the candy-coated chocolate concept; Hershey provided chocolate, capital, and crucial military contracts during WWII. When post-war consumer sales faltered, Forrest deployed psychological tactics to oust Murrie by 1949. The legendary 1950 "melts in your mouth, not in your hand" campaign propelled M&M's to become America's top candy by 1956.
By 1964, Forrest reclaimed Mars Inc. through strategic stock purchases and relentless pressure, implementing revolutionary principles: open offices for all, universal time cards, performance-based bonuses, and obsessive quality control. His 1970s decision to manufacture chocolate independently enabled devastating price and size wars that dethroned Hershey. In 1973, Mars surpassed its rival, and Forrest retired, transferring ownership to his three children.
Forrest's entrepreneurial fire burned on—at 76, he launched Ethel M Chocolates to compete with See's Candies.
Under his children's leadership, Mars exploded globally, growing from $800 million to $20 billion in revenue, acquiring Wrigley, expanding into veterinary hospitals, and maintaining legendary secrecy. Today, with over $50 billion in revenue and a $117 billion family net worth, Mars stands as a confectionery and pet care colossus—a monument to strategic vision and generational grudges.
Timeline
1883: Frank Clarence Mars born in Minnesota.
1902: Frank establishes first candy company in Minneapolis; marries Ethel Kissack, has son Forrest Mars.
1910: Frank's first candy business fails; Ethel divorces him, sends six-year-old Forrest to live with grandparents in Saskatchewan, Canada.
1920: Frank returns to Minneapolis, starts fourth candy company, which becomes Mars Inc.
1923: Forrest reunites with father; Milky Way bar created.
1924: Milky Way generates $800,000 in first-year sales.
1930: Snickers bar introduced, named after Frank's horse.
1932: 3 Musketeers launched during Great Depression; Mars revenue reaches $25 million.
1933: Father-son conflict leads Forrest to Europe with $50,000 and foreign Milky Way rights.
1934: Forrest establishes Mars bar production in England; acquires Chappel Brothers pet food company.
1940: M&M Limited Partnership formed with Bruce Murrie (Hershey executive's son).
1941: M&M's production begins, primarily for military during WWII.
1942: Uncle Ben's Rice company established in Houston, Texas.
1949: Forrest buys out Bruce Murrie for $1 million, gains 100% M&M's ownership.
1950-1951: "Melts in your mouth, not in your hand" campaign launches.
1956: M&M's becomes America's top-selling candy.
1963-1964: Forrest acquires full control of Mars Inc. from family.
1973: Mars surpasses Hershey as America's #1 candy company; Forrest retires, transfers company to three children.
1980: Forrest starts Ethel M Chocolates at age 76.
2008: Mars acquires Wrigley for $23 billion with Berkshire Hathaway financing.
2024: Mars announces $35.9 billion acquisition of Kellanova.
Notable Facts
The Mars family, worth $117 billion, ranks as America's second wealthiest, maintaining extreme privacy—once paying $20,000 to prevent photo reuse.
All facilities employ open floor plans with black metal desks and doorless conference rooms—a 1930s policy still rigorously enforced.
Pet care generates 59% of revenue (~$29.5 billion), with approximately 100,000 of 140,000 employees working in pet-related businesses.
Manufacturing facilities produce Snickers at over 5,500 bars per minute in 24/7 operations.
Revenue has grown at 14% CAGR for over a century, from Frank's failed penny candy ventures to a $50 billion global empire spanning 80+ countries.
Financial & User Metrics
Annual Revenue: Over $50 billion (2023).
Revenue Breakdown: Pet care 59% (
$29.5 billion), Mars Snacking 36% ($18 billion), Food 5% (~$2.5 billion).Employee Count: 140,000+ globally (~100,000 in pet care).
Geographic Presence: Operations in 80+ countries.
Market Share: Mars and Hershey each control ~24% of US candy market; Mars holds 11% of global confectionery market.
Pet Hospital Network: 3,000+ locations (8% of US veterinary market via VCA and Banfield).
Historical Growth: 14% CAGR over 100+ years.
Family Ownership: 100% private ownership by Mars family ($117 billion net worth).
Mars' Business Segments
Confectionery (Mars Snacking): Encompasses iconic brands including M&M's, Snickers, Milky Way, 3 Musketeers, Twix, Skittles, and Dove; generates ~$18 billion annually, representing 36% of revenue; dominates US candy market alongside Hershey.
Pet Care: Comprises pet food brands (Pedigree, Whiskas, Royal Canin) and veterinary services (VCA, Banfield); constitutes largest segment at 59% of revenue (~$29.5 billion); employs ~100,000 of 140,000 staff; operates 3,000+ veterinary hospitals (8% of US market).
Food: Features Ben's Original (formerly Uncle Ben's) rice and Kind bars; accounts for 5% of revenue (~$2.5 billion); Kind acquisition in 2020 expanded healthier snack portfolio.
High-End Chocolate (Ethel M Chocolates): Specialty chocolates launched by Forrest in 1980, competing with See's Candies; acquired by Mars in 1988; specializes in liquor-filled confections and premium truffles.
Vending Machines (Formerly VendPack): Operated coin mechanisms and bill validators for vending machines globally; market leader until 2006 divestiture; historically supported candy distribution infrastructure.
Mars Principles
The Mars Principles—Quality, Responsibility, Mutuality, Efficiency, and Freedom—form the bedrock of company culture, originating in the 1930s with Forrest Mars' "Mars Way" manifesto in England. These principles, formalized by his sons, are recited religiously by employees, functioning like Amazon's leadership principles.
Quality reigns supreme, with Forrest's obsession driving rigorous standards across ingredients, packaging, and shelf placement. He implemented Toyota-like production systems decades before they became fashionable, empowering any worker to stop the line for defects, often discarding entire batches to ensure absolute consistency.
Responsibility emphasizes empowerment over micromanagement; Forrest paid employees 3-4x industry averages (now ~10% above), tying bonuses directly to company performance and fostering deep accountability. Even the CEO punches a time card, earning a 10% bonus for punctuality.
Mutuality ensures all stakeholders—retailers, suppliers, distributors—profit from the relationship, creating a compounding ecosystem advantage.
Efficiency focuses on maximizing asset utilization, measured through ROTA (targeting 18%), with constant reinvestment in R&D and manufacturing to maintain cost leadership.
Freedom reflects private ownership's advantages, enabling long-term decisions without quarterly earnings pressures, reinforced by the family's extreme privacy (famously refusing photographs).
These principles, established when competitors like Hershey operated complacently, enabled Mars to scale globally while maintaining operational excellence. The open office policy—no executive perks, no closed-door rooms—underscores radical equality and transparency, a 1930s innovation still rigorously maintained. This culture, blending exacting standards with stakeholder alignment, has sustained Mars' 14% CAGR for a century, distinguishing it as a modern, disciplined conglomerate.
Return on Total Assets (ROTA)
Mars' devotion to Return on Total Assets (ROTA) as its primary performance metric, targeting 18%, underscores its efficiency-driven culture. ROTA, defined as net profit divided by the market value of fixed assets (revalued constantly, not at historical cost), measures how effectively assets generate profit. Forrest adopted this from T.G. Rose's 1930s book Higher Control in Management, prioritizing asset efficiency over revenue or profit alone. An 18% ROTA implies investments must pay back within approximately 5 years, balancing aggressive reinvestment with stakeholder value creation.
This metric drove Mars to operate 24/7 factories, producing 5,500+ Snickers bars per minute, and reinvest profits into R&D for custom manufacturing equipment, minimizing taxes while maximizing growth. Unlike competitors like Hershey, who ignored such metrics, Mars' ROTA focus ensured disciplined capital allocation, enabling devastating price wars and global expansion while maintaining profitability. This approach, rooted in Forrest's study of industrial giants like du Pont, remains a cornerstone of Mars' operations, distinguishing it in a capital-intensive industry.
Pet Care Business
Mars is fundamentally a pet food company that also owns candy, with its pet care division generating 59% of revenue (~$29.5 billion) and employing ~100,000 of 140,000 staff.
The journey began in 1934 when Forrest acquired Chappel Brothers in England, a pioneering move when pets subsisted on table scraps. This early diversification into canned dog food (Chappies) proved profitable within years, funding Mars bar expansion across Europe.
Today, Mars owns major pet food brands like Pedigree, Whiskas, and Royal Canin (acquired 2002 for prescription pet food), alongside veterinary networks VCA (2017, $9 billion) and Banfield (fully owned 2015). These 3,000+ hospitals represent 8% of the US veterinary market. Pet care's strategic fit lies in its recession-proof nature—mirroring candy's resilience—and high switching costs: pet owners rarely change food due to digestive issues, while veterinary relationships prove remarkably sticky.
This aligns perfectly with Mars' scale economies and mutuality principles, leveraging distribution (veterinary hospitals as channels for Royal Canin) and global reach. The pet care focus, emphasized by the 2022 CEO's pet division background, reflects Mars' prescient recognition of pets as family members, ensuring stable cash flows and dominance in a rapidly growing market.
Hershey's
Milton Hershey revolutionized the US chocolate industry, fundamentally shaping Mars' trajectory through both collaboration and rivalry. Starting in 1900, Hershey's breakthrough in milk chocolate production—achieved through relentless trial-and-error, yielding a slightly sour taste—established America's distinct chocolate preference.
Hershey operated as both a branded chocolate bar producer and the primary wholesale chocolate supplier, functioning like "AWS for chocolate," enabling thousands of regional candy entrepreneurs, including Frank Mars. His scale allowed low-cost distribution to Five and Dime stores and military contracts during WWI, setting the national taste standard.
Mars, under Forrest, ruthlessly capitalized on Hershey's inertia. The 1940 M&M partnership leveraged Hershey's chocolate and military access, but Forrest's 1964 decision to manufacture chocolate independently sparked devastating price and size wars, exploiting Hershey's high-cost chocolate bars against Mars' cheaper nougat-filled Snickers.
After Milton's departure, the company seemed more focused on preserving his legacy than innovating. This led to decades of stagnation—no advertising until 1970, no marketing department, and a fixed nickel bar price (1900-1969) with progressively shrinking sizes to combat inflation. By 1973, Mars surpassed Hershey, driven by superior marketing (M&M's campaigns) and operational efficiency, highlighting how Hershey's complacency shaped Mars' aggressive, scale-driven strategy.
Melts in Your Mouth, Not in Your Hand
The 1950-1951 M&M's campaign, "Melts in your mouth, not in your hand," was a marketing masterstroke that addressed parents' core "job to be done": keeping kids happy without creating chaos.
Developed by Ted Bates & Company after comprehensive market research, it revealed M&M's appeal to kids for their colorful, bite-sized form, but parents—the actual purchasers—needed assurance against mess. The slogan perfectly captured this dual promise: joy for kids and clean homes for parents, leveraging the candy-coated chocolate's non-melting feature.
Backed by sponsorships of popular kids' shows like Mickey Mouse Club and Howdy Doody, the campaign propelled M&M's to America's top-selling candy by 1956, surpassing Snickers and Hershey's bar. This focus on consumer psychology—targeting parents' practical anxieties—distinguished Mars in an industry fixated on adult consumers, cementing M&M's as a nostalgic, impulse-driven brand and showcasing Mars' marketing prowess over product innovation alone.
Kellanova Transaction
In August 2024, Mars announced a $35.9 billion acquisition of Kellanova, the largest CPG transaction since the 2015 Kraft-Heinz merger. Kellanova, spun off from Kellogg's, encompasses snack brands (Pringles, Rice Krispie Treats, Pop Tarts, Eggo, RXBAR) and international cereal businesses, excluding US cereal operations. Financed partly through investment-grade bonds, the deal reflects Mars' conservative yet strategic approach to growth, expanding its food segment (currently 5% of revenue) and diversifying beyond sugar-heavy candy amid mounting health concerns.
The acquisition aligns with Mars' history of transformative buy-and-hold deals (Wrigley, VCA), leveraging scale economies and distribution to globalize Kellanova's brands, much like Kind bars post-2020. By integrating these snacks, Mars strengthens its portfolio against competitors like Nestlé, positioning itself as a diversified CPG giant while maintaining its recession-proof, brand-driven model.
Buy Commodities, Sell Brands
The philosophy "buy commodities, sell brands," articulated by Warren Buffett in his 2011 Berkshire shareholder letter, perfectly encapsulates Mars' core strategy. By purchasing raw inputs like cocoa, peanuts, and rice, Mars transforms them into iconic brands (M&M's, Snickers, Ben's Original) that command fierce consumer loyalty and premium shelf space. This model, as Buffett observed, has driven sustained profits for companies like Coca-Cola and Wrigley since the 19th century.
For Mars, this means leveraging scale economies to procure commodities cost-effectively, then deploying sophisticated marketing (M&M's campaigns, Olympic sponsorships) to forge emotional, nostalgic connections. This ensures robust margins despite low-cost inputs, as demonstrated by Snickers' cheaper nougat and peanuts versus Hershey's chocolate-heavy bars. The 2008 Wrigley acquisition, backed by Berkshire, exemplifies this approach, integrating gum and mints (Altoids, Lifesavers) with high margins from petroleum-based inputs. Mars' commodity trading expertise further amplifies profits, mitigating risks that competitors like Hershey faced, cementing its dominance through branded, recurring-purchase products.
Powers
Scale Economies: Mars' most formidable power derives from its massive manufacturing footprint, enabling cost advantages through 24/7 factory operations that produce over 5,500 Snickers bars per minute. This scale extends to global procurement (bulk commodity purchases at lower prices) and massive advertising budgets that dwarf competitors. Distribution muscle secures prime shelf space—critical when 90% of candy purchases are impulse-driven—creating a zero-sum game where Mars' dominance compounds. Forrest's early mechanization in the 1920s, adapting Ford's assembly lines, outpaced rivals like Hershey, who lacked efficiency metrics. This power fueled devastating price wars in the 1970s, where Mars increased bar sizes while maintaining low prices, eroding Hershey's market share. Globally, scale supports diversification, amortizing fixed costs across candy, pet food, and snacks, sustaining 14% CAGR for a century. Competitors cannot match this without similar volume, reinforcing Mars' barriers in a high-fixed-cost industry.
Branding: Though not charging premium prices, Mars' brands like M&M's and Snickers command deep loyalty, translating to higher volume and shelf dominance. Nostalgic campaigns—"melts in your mouth, not in your hand" (1950s) and color voting (1995)—create emotional bonds from childhood, driving recurring purchases (97% of candy buyers repeat 35 times yearly). This power manifests in associations with universal icons—the Olympics, NFL, NASA—elevating brands beyond mere commodities. Unlike Hershey's plain bars, Mars' character-driven marketing (CGI M&M's since 1994) builds franchises, securing impulse buys. Branding supports globalization, unifying names like Snickers worldwide, and enables diversification into Kind bars for health-conscious consumers. It shares value with consumers via affordability, yet captures through loyalty, outlasting fads and sustaining market share (24% US candy).
Switching Costs (Pet Care): In Mars' largest segment (59% revenue), high switching costs lock in customers: changing pet food risks digestive issues, deterring experimentation, while veterinary relationships at VCA and Banfield (3,000+ locations) involve emotional and practical barriers. This power differentiates from candy's impulse nature, creating ecosystem advantages—veterinarians promote Mars foods—ensuring retention in a growing market. Competitors struggle to dislodge loyal customers, reinforcing Mars' 8% US veterinary dominance and overall stability.
Playbook
Recession-Proof Business: Mars thrives in downturns by operating in categories where consumers prioritize essentials and small indulgences. Candy, with 98% household penetration and 35 annual purchases, offers affordable dopamine hits, as demonstrated in 1932 ($25 million revenue amid Depression) and 2008 (no sales decline). Pet care, now 59% of revenue, mirrors this resilience: owners maintain spending on food and veterinary care, viewing pets as family. This dual resilience—candy for emotional comfort, pets as family—ensures stable cash flows, enabling continuous reinvestment. Forrest's 1934 pet diversification hedged candy risks, while global scale amortizes costs. Unlike cyclical industries, Mars' habitual products (addictive sugar, routine pet feeding) sustain demand, supporting 14% century-long CAGR through economic cycles.
Growth Through Strategic Acquisitions: Mars masters buy-and-hold acquisitions, expanding at high multiples (Wrigley 35x, Royal Canin 39x) through deep underwriting. From 1934's Chappel Brothers (bootstrapping pet food) to 2024's $35.9 billion Kellanova (snacks diversification), they integrate minimally, preserving brands and decentralizing operations. A bullets-before-cannonballs approach—minority Kind stake (2017) before full acquisition (2020)—reduces risk. Private ownership enables patient capital, avoiding over-leverage (mostly cash-financed, bonds for Kellanova). This playbook, perfected in Forrest's era, builds conglomerates like LVMH, sharing efficiencies (veterinarians channeling Royal Canin) while capturing synergies, growing from $800 million (1973) to $50 billion.
Durable Business Through Marketing Excellence: Post-1950s, Mars built longevity via marketing over product innovation, transforming commodities into nostalgic habits. Campaigns like "melts in your mouth" (1951, targeting parents' mess aversion) tripled M&M's sales, while the ET miss (1982) proved minor amid broader successes (Olympics sponsorships, NFL ties). Interactive tactics—1995 M&M's color vote (blue wins, Empire State Building illuminated)—engaged millions, boosting loyalty. Associating with icons (Rolling Stones, NASA) and holidays cements emotional bonds, driving impulse buys (90% of candy purchases). This outpaced Hershey's advertising absence until 1970, securing shelf dominance. Marketing shares value (affordable pricing) yet captures through volume, sustaining brands for decades in a fragmented global market.
Conglomeration Excellence: Mars excels at unrelated diversification, starting with 1934 pet food amid candy growth, creating a resilient portfolio (59% pet revenue today). Like LVMH, they buy-and-hold (30 acquisitions since 1990s, 2 sales since 2015), decentralizing (minimal rebranding, independent operations) while centralizing principles (quality, efficiency). Forrest's Europe stint built this muscle—candy, pet food, rice—funding expansions via cash flows. Pet hospitals (VCA $9 billion) integrate vertically, channeling foods like Royal Canin. Private ownership enables long-term patience, avoiding synergies that dilute brands. This playbook, radical in the 1930s, sustains 14% CAGR, transforming Mars into a $50 billion giant blending manufacturing scale with service businesses.
Duration: Sustaining 14% CAGR for a century requires global applicability (brands like Snickers unify worldwide), high-margin structures (commodities to brands), operational efficiency (24/7 factories, ROTA targeting), and habitual purchases (sugar addiction, pet routines). Recession-proof categories ensure stability, while diversification (pet care hedging candy) mitigates risks. Scale economies amplify advantages: early mechanization and marketing dominance compound benefits, securing distribution in impulse-driven markets. Private ownership fosters freedom for long-term bets, like independent chocolate production outlasting Hershey.
Quintessence
David: Forrest Sr. was a "freaking G," among America's greatest entrepreneurs, rivaling Sam Walton and Henry Ford—his genius obscured only by Mars' deliberate privacy.
David: Mars stands as one of the first truly modern companies, with Forrest's 1930s innovations—open offices, scientific management, diversification, consumer research—decades ahead of competitors.
Ben: Mars' success proves highly path-dependent, requiring specific timing (TV, supermarkets), technology (mechanized production), competitive dynamics (Hershey's stagnation), and family circumstances (Forrest's grudge)—unreplicable today.
Carveouts
Dandelion Chocolate: Praised for exceptional factory tours and bean-to-bar quality; David recommends their advent calendar featuring global chocolatier collaborations.
Tesla Model Y: Ben lauds the vehicle and Tesla's remarkable 90-minute, $120 mobile tire repair service.
Silo Season Two: Ben recommends the Apple TV series for maintaining season one's exceptional quality.
Home Alone: David appreciates the film from a parent's perspective following holiday travel challenges.
Additional Notes
Episode Metadata:
Number: Fall 2024, Episode 4
Title: Mars Inc. (the chocolate story)
Duration: 3:53:11
Release Date: December 15, 2024
Miscellaneous Insights:
Forrest’s Character: Ben and David portray Forrest as a genius, akin to Sam Walton, with a temper and chip-on-shoulder drive from his father’s rejections. Quotes like “I want to conquer the whole goddamn world” (1932) from Mars’ archives add color but may reflect Forrest’s self-mythologizing.
Pet Care Dominance: The episode under-emphasizes pet care’s 59% revenue share, focusing on candy’s narrative allure. This gap is addressed in the briefing’s analysis, highlighting VCA (2017) and Banfield’s strategic importance.
Hershey’s Stagnation: The episode’s critique of Hershey’s “brain-dead” decades (no advertising until 1970, shrinking bars) is vivid but lacks Hershey’s perspective, which Chocolate Wars attributes to the Hershey Trust’s focus on the Milton Hershey School.
Climate Change: Ben and David’s discussion of cocoa’s climate sensitivity (narrow temperature band, genetic modification risks) is a forward-looking insight, not deeply explored but critical for Mars’ future, as noted in Playbook.
Sources:
Related Episodes:
Berkshire Hathaway (Season 8, Episode 5)
LVMH (Season 12, Episode 2),
Novo Nordisk (Season 14, Episode 1)
Incredible breakdown of how ROTA shaped everything at Mars. The 18% target forced them to think way differently than Hershey, and running factories 24/7 wasnt just about efficiency, it fundamentaly changed the economics of candy manufacturin. I remember touring a food production plant a few years back and seeing similar principles, but Mars took it to another level by tying it to every decision. What really gets me tho is how Forrest's spite against his dad became the driver for one of the best-run conglomerates in America.