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When Forrest Mars Sr merged his own confectionery company with his family’s eponymous enterprise in 1964, he dropped to his knees before a startled collection of Mars executives and pronounced: “I pray for Milky Way; I pray for Snickers.”
Such outbursts were typical of Forrest, who combined fierce eccentricity and secrecy with unrelenting faith in the virtues of Mars products, such as M&M’s and Twix. Quality is one of five principles that it still preaches to its 135,000 employees: “People and pets depend on us, and we depend on them.”
Pets joined in 1935, when Forrest bought a dog-food maker in the UK, having moved there after a business split from his father. Confectionery and pet food have since been Mars’ two main businesses, joined by chewing gum when it acquired Wrigley for $23bn in 2008, with Warren Buffett’s help.
Mars rarely deviates from its mission, so it is remarkable that it this week struck a $36bn deal to acquire Kellanova, the snacks company formerly known as Kellogg. Kellanova only relaunched last year with the separation of its US cereals business into WK Kellogg. Compared with Mars, it lasted for the blink of an eye.
But life moves fast in the snacks aisle: sales of salty treats such as Kellanova’s Pringles and Cheez-It crackers have grown faster than other kinds of foods for more than a decade, according to Citigroup. Families sit down together less for meals and more people graze: no wonder Mars wants to add to its confectionery-heavy snacking portfolio.
That said, it is brave timing for Mars. Sales of branded snacks, including Kellanova’s Pop-Tart pastries and Rice Krispies Squares, have slowed sharply in the past year. Ingredient inflation has pushed up their prices and shoppers have traded down to private label alternatives. From Trader Joe’s in the US to J Sainsbury in the UK and 7-Eleven in Japan, there are a lot of crisps, crackers and protein bars out there.
Food companies also face longer-term concerns. One is that the golden age of snacks may be passing, thanks to the rise of hunger-suppressing weight loss drugs such as Wegovy. Morgan Stanley predicts that sales of salty snacks and baked goods may fall by up to 3 per cent by 2035 as the temptation to reach for another Pop-Tart subsides.
Above all, snack makers are under scrutiny for selling unhealthy ultra-processed foods. Public health officials do not care whether Mars produces cans of Pedigree dog food with 1 per cent fibre and 82 per cent moisture, but human snacks are another matter. Eating too many concoctions packed with saturated fats, salt and sugar is perilous.
The recent downturn is the least of Mars’ worries. Kellanova is a public company that faced pressure from an activist investor while Mars is family-owned and can take its time. It is implausible that changes in working and family lives will reverse, and people will return to eating three meals a day and shunning snacks.
But better health will continue to matter and the deal bulks up Mars with products that should be eaten sparingly. (I wrote before about Pringles, the synthetic crisp brand for which I have a soft spot.) Kellanova owns more natural RXBar protein bars and Pure Organic fruit bars, but a single marshmallow Rice Krispies Square contains 10 per cent of a woman’s daily UK recommended sugar intake.
Poul Weihrauch, Mars chief executive, told me this week that his company had to follow the global trend towards snacking: “This is about consumer choice,” he said, adding that it was trying to “improve the nutritional profile of all our brands”. It has been reducing bad ingredients, and limiting products to 250 calories per serving.
He is right that snacking can be healthy. “The act of snacking itself is not bad for us, within reason. The problem comes from what we are snacking on, and when,” says Sarah Berry, professor of human nutrition at King’s College, London. Munching high-quality foods, such as fruit, vegetables and seeds, during the day can curb hunger and improve health.
Mars is not in the raw almonds and seeds business and it has to make its own snacks better without also making them too expensive. Another tenet of its quality principle is that “our consumers and clients weigh value for money when making their choices”. It is gaining products such as Kellogg’s Fully Loaded Eggo Chocolate Chip Brownie waffles, not fresh-baked madeleines.
It was simpler to be a confectionery company that made M&M’s and chocolate, caramel and nougat bars (with peanuts added to Snickers). They are patently sweet treats that should not be over-consumed, whereas modern snacks such as protein and cereal bars lie somewhere on the spectrum between nutrition and indulgence.
Mars is taking on this conundrum with Kellanova. The deal has impeccable snacking logic and I bet that people will keep buying plenty of Pringles and Cheez-Its, whatever health experts say. But no one prays for Pop-Tarts.
john.gapper@ft.com