- Mars Inc – the company behind Snickers, M&Ms, Milky Way, Pedigree, Uncle Ben’s Rice, and other food brands – has historically tried to stay out of the public eye.
- But the 106-year-old company, which is entirely owned by the Mars family, has been opening up about its business and what’s next for the company.
- Business Insider spoke to Mars chairman Stephen Badger about why the $35 billion firm is speaking out and why it is “100% committed to staying private.”
- Badger also reveals what it’s really like to work for one of the biggest family-run private companies in the world.
Mars Inc, the maker of M&Ms, Snickers, and Milky Way, was once one of the most secretive companies in the United States. But that has started to change during the last few years.
The 106-year-old company is making some big transformations in an effort to tackle new challenges and new opportunities.
We sat down with Mars chairman Stephen Badger to discuss why the company is opening up and to see what the $35 billion firm has planned for the future. We also got him to give us some insight into what working for a family company is really like.
This interview has been edited for length and clarity.
Mars is moving away from its secretive past and speaking out
- Brendan McDermid/Reuters
Mars has tried to stay out of the public eye for most of its history.
But during the last few years, the Mars family and company executives have started to speak out. They’ve started to make this shift, at least in part, because consumers care more about where products come from than they had in the past.
“For most of our history, in fact … for 99% of our history, we’ve chosen not to be in the public eye and we’ve really wanted our brands to engage consumers. And yet times have changed,” Badger, who is the great-grandson of the company’s founder, Franklin Mars, said.
“Consumers do want to know more about not only the brands that they’re buying, but the company that is behind them.”
Badger is right. A recent study by Label Insight, which surveyed 2,000 consumers, found that 94% of respondents would be more loyal to a brand if it offered complete transparency.
Consumers do want to know more about not only the brands that they’re buying, but the company that is behind them.
But it’s not just a shift in consumer behavior that convinced the company to be more public. Mars is also speaking out because it wants to attract talent, and workers increasingly want to work for companies that have a strong mission.
“Current and future associates really want to know the company that they’re working for.” Badger said. “What is the vision of this company? What does it stand for?”
“There are a range of issues that are very serious facing the world and that are a direct threat to our business if not addressed, as well as a threat to the planet overall. So whether that is issues like climate change or labor issues in our supply chain or diversity and inclusion or health and well-being, these are really key issues that are significant challenges as well as opportunities to our business,” Badger said.
“We feel a responsibility to do our part in addressing them, and part and parcel of being able to do that is to speak publicly about our stance on these issues and hopefully enroll others to work with us in a coalition to address them.”
Mars is ‘100% committed to staying private’
But just because Mars is being more open about its mission and its future business endeavors doesn’t mean the company has any plans to go public.
“We’re 100% committed to staying private,” Badger said. “It really does allow us to pursue our own path, our own future and to really invest in the long term.”
Staying private ultimately allows the company flexibility. It enables Mars to move fast and act on consumer demands.
“Being private does give us a competitive advantage in that we know who our shareholders are. We could fit them all in quite a small room if we had to. And so the ability of management to interface with the shareholders is very direct. It’s very tangible. It’s very immediate. And, and I think it does give us the capacity to make decisions quickly,” Badger said.
For example, Badger said that Mars’ decision to buy Wrigley in 2008 happened after a “very quick conversation” among all shareholders. The deal, worth $23 billion, was the biggest acquisition in the company’s history.
We’re 100% committed to staying private.
Being a private company also allows Mars to think more long-term about its business decisions, Badger said.
“We have the luxury, if you will, of not being subject to the quarterly stock market and the impatience that it has and the severity of focus that it puts upon earnings,” he said.
That’s not to say that Mars doesn’t face the same pressures as public companies do when it comes to growing profits and keeping cash on the balance sheet. After all, Mars competes in the same marketplace as its public rivals.
But it does mean that the company can make financial decisions and investments that might otherwise be off-limits if the company were public.
“At the end of the day, it’s a different environment to be in a family business, in our family business … we do take a long-term view of what we’re trying to do and we can make commitments that are not fundamentally, solely based upon the financial reward and return,” Badger said.
But while being a family-owned business definitely has its advantages, there can also be challenges.
What working for the family business is really like
- Vincent Kessler/Reuters
Just as with any family business, there are times when not everyone agrees, Badger said.
In these instances, the company turns to a set of five principles that govern the company’s business decisions as well as its culture. Those principles are quality, responsibility, mutuality, efficiency, and freedom.
“Those principles really bring us together,” Badger said. “As you can imagine in any family, when you’re going to have disagreements, as you would in any family, they really ground us into a bedrock of how to work our way through decisions and to find common ground even if we disagree.”
Badger said the one piece of advice he would give anyone running a family business would be to find a set of values that bring you together.
“Beyond that, I think I would say to ensure that you set up the appropriate governance structures so that you don’t have every individual thinking that they have the right or the mandate to make decisions for the business,” Badger said.
He added that it’s equally important to make sure that you have the best people in place to run the business.
“Every family is different, and every business is different. But those are some of the key building blocks to keep in mind,” Badger said.
How Mars will look different in the future
As Mars enters its next 100 years, it’s looking for new ways to grow its business, and that means not only new products, but new services as well.
“The biggest transformation that we’re continually pondering is our portfolio transformation,” Badger said.
One example of this is its growing pet care business. Mars bought VCA Inc, which manages some 800 veterinary hospitals in the US and Canada, for $9 billion last September.
Mars’ pet care portfolio already includes Blue Pearl Veterinary Partners, which it acquired in 2015; Pet Partners, which it bought in 2016; and Banfield Pet Hospitals, which it purchased in 2007. The company also makes Iams, Nutro, Pedigree, Royal Canin, and Whiskas pet food.
But the company isn’t just looking at expanding its portfolio. It’s also looking for new ways to tell consumers about its products.
“It’s incumbent upon us to perpetually think about the changing nature of consumers behaviors, not only in terms of what they want to buy, but where they want to buy it, and how they want to be told about it,” Badger said.
To do this, the company is working on a digital transformation that it hopes will better connect its products with people.
“In terms of digital, one of the biggest opportunities, and the thing that we’re most proud of in terms of what we have, is our brands. Our brands are known around the world, loved around the world, and used by people on a daily basis,” Badger said. “And the ability to actually engage in conversation with people is something that we’re really excited about. And I think that’s the next evolution in terms of what we’re trying to undertake and that really excites me.”
As Mars continues to grow its business, though, it’s also looking for new ways to do so sustainably.
Climate change is a real threat to business, but there’s also opportunity
- REUTERS/Akintunde Akinleye
Mars has a carbon footprint the size of Panama, but the company is trying to change that, Badger said.
In September, Mars announced a $1 billion investment in its “Sustainable in a Generation” project, which is committed to reducing the carbon footprint of its business and supply chain more than 60% by 2050.
Addressing climate change is not only necessary for the health of the planet, but absolutely for business.
“Addressing climate change is not only necessary for the health of the planet, but absolutely for business,” Badger said.
“We’re fundamentally an agricultural company in that we buy raw materials and, obviously, turn them into brands and products that people can eat. And to that end, farmers are facing very real, significant issues in terms of the threat of climate change, particularly in terms of weather patterns,” Badger said. “As such, addressing climate change or not addressing climate change will lead to an increase in raw material pricing.”
Purchasing renewable energy is also more cost-effective, said Badger. He said the company has already started to see its energy costs go down in the factories and operations in North America, Mexico, and the United Kingdom where it has started to adopt renewable energy.
“We all have an impact, and the goal is to minimize our impact, whether that’s as an individual or as a corporation,” Badger said.
“It’s through Mars that I’ve had my eyes open to the reality that not only is business critical to solving today’s issues, but it’s actually, you know, fundamental to it … The magnitude of issues facing the planet is such that business has got to be front and center in that dialogue and in addressing those issues.”