Mars Wrigley Confectionery Sweetens a Competitive Stance

— 10/07/2016

Food industry titan Mars, Incorporated made a bullish move in both the U.S. candy market and the Windy City—it will combine its chocolate business (which produces iconic brands such as Snickers, M&M's and Twix) with the company's candy subsidiary Wrigley (maker of Skittles, Starburst, and Orbit gum). The newly formed combined division will be headquartered in Chicago and will be called Mars Wrigley Confectionery.
Based on sales, privately-owned Mars is already the nation's largest confectionary company. This latest move is being made with the goal of allowing Mars to accelerate the company's growth in an evolving candy market, as market research firm Packaged Facts sees it.
"The candy market terrain shows a broad array of players that have a significant presence in the U.S. market, but is lead by candy behemoths such as Mars and Hershey, which dominate the domestic market. But as in many markets today, there is an influential group of disruptors, especially the superpremium gourmet candy producers and the craft producers. Regardless of whether the newly announced unified company tackles such niche candy segments remains to be seen, but at the very least this is a fortification of Mars' already- formidable assets as the company looks ahead to future growth opportunities," says David Sprinkle, research director for Packaged Facts.
The decision comes on the heels of Mars announcement that it would acquire Berkshire Hathaway's reported 19% share in Wrigley to take full control of the subsidiary. Mars has owned a majority stake in Wrigley since the original acquisition in 2008. The combination of the Mount Olive, NJ-based chocolate company with Chicago-based Wrigley is expected to be phased-in gradually during 2017. For the moment, the units will remain separate.
For some astute industry experts, the creation of Mars Wrigley Confectionery likely has been mildly anticipated as the companies had already been collaborating for a while.

As Packaged Facts discussed in Chocolate Candy Market in the U.S., 11th Edition, the companies especially ramped up collaboration in the last year, joining forces to deliver shopper marketing insights to key retailers. Last year, they brought together decades of "impulse leadership" to create insights on "transaction zones," which are emerging impulse areas of the store such as the in-store pharmacy, the café, mobile phones, or the "buy online, pick-up in store" area where shoppers are making purchases beyond just the front end of the store. They also collaborated on their first "joint-selling program," which was tied to last year's Super Bowl and included the Snickers (Mars) and Skittles (Wrigley) brands.
In August 2016, Packaged Facts published Chocolate Candy Market in the U.S., 11th Edition and will release an upcoming report on the candy and gum market later this year.


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