In 1922, after almost 20 years of business failure, Frank Mars founded the Mar-O-Bar Company in Minneapolis. The company was named after one of its confections, a gooey combination of caramel, nuts, and chocolate. His estranged son,
Forrest Mars, joined him and they changed the name of the company to Mars, Inc. Within a year, the company was successfully selling butter creams. Frank Mars borrowed a technique developed at Minneapolis’s Pendergast Candy Company to create a fluffy, chewy nougat center for its Fat Emma bar. In 1923, Mars, Inc. introduced the Milky Way bar, which was different from its competitors in that the malt-flavored nougat—a whipped filling made of egg whites and corn syrup—was encased in a solid chocolate covering to keep it fresh. In its first year on the market, the Milky Way brand had grossed $800,000.
In 1930, Frank Mars introduced the Snickers bar, a peanut-flavored nougat bar topped with nuts and caramel and coated with chocolate. It quickly became the most popular candy bar in America, a position it has held ever since. In 1932, Mars released the 3 Musketeers bar. The company used so much chocolate that the Hershey Company ended up supplying it to Mars, a relationship the two companies maintained until 1965.
In 1932, Frank and Forrest Mars had a falling out. Forrest was given $50,000 and the foreign rights to Mars’s products. In 1933, Forrest visited Switzerland, where he claimed to have learned chocolate manufacturing as a worker at the Jean Tobler factory, which produced the Toblerone chocolate bar, and at Nestles factories. Mars then moved to England. At the time, England was saturated with sweets from Rowntree & Co. and Cadbury Brothers. Despite stiff competition, Mars set up a factory in Slough, England in 1932. Because he had no chocolate, he purchased it from Cadbury, a practice that was continued until the 1950s. Among that factory’s first products was the Mars bar, which was a slightly sweeter version of the American Milky Way. Mars battled Cadbury and Rowntree for retail shelf space and it was only after the Mars bar became England’s best-selling bar that this problem was resolved. By 1939, Mars, Ltd. was ranked as Britain’s third-largest candy manufacturer.
In addition to his business in England, Forrest Mars also created a candy business in the United States where he teamed up with Bruce Murrie, son of William Murrie, the president of the Hershey Company. They named their company M&M for the first letter of each founder’s last name. Due to Murrie’s influence, M&M obtained as much chocolate as it needed from Hershey. The company also received technical assistance and the latest production equipment. The company’s first product was a small chocolate confection that was covered by a hard sugar shell, which they named M&M’s Chocolate Candies. In 1942, Forrest bought a rice mill and launched Uncle Ben’s Rice. (Uncle Ben was evidently a real person, but the caricature on box was of a Chicago waiter.) After the war, the relationship between Mars and Murrie became strained, and in 1949 Mars bought out Murrie for $1 million and changed the name of his company to Food Manufacturers, Inc. Forrest launched a major advertising campaign in national newspapers and magazines, radio spots, and billboards. By 1949, annual sales had increased to $3 million.
Merger
When Frank Mars died in 1934, Forrest had tried to gain control of the company. Unfortunately for Forrest, Frank Mars had left company to his second wife, Ethel, and their daughter, Patricia. Ethel left management of company in the hands of her brother, William Kruppenbacher. In 1945, Ethel died and half of her stock passed to Forrest Mars, who was given a seat on the board of directors and an office at Mars, Inc.’s headquarters. When Forrest Mars tried, but failed, to oust Kruppenbacher, Forrest was banned from the company’s grounds. In 1950, Kruppenbacher offered Forrest one-third of the seats on the board, which Forrest accepted. He pushed Mars to update its equipment. At that time, Mars still hand-wrapped its candy. New equipment was purchased from Germany and in 1953 Mars mechanized its process for making candy bars. This allowed for continuous-flow production, which reduced manufacturing time. Forrest Mars also pushed Mars, Inc. to expand abroad and globalized its operations. He introduced Snickers, Milky Way, and other products into other countries, and introduced successful European candies, such as Starburst Fruit Chews and the Twix bar, into the United States.
Mars was first candy company to date its products and remove them from distributors if they were not sold in time. Forrest pioneered use of computers on the production line to measure the consistency of his output; if a candy bar was defective, it was scrapped, and the scrap would be ground up for use in another candy bar. In 1959, Forrest became chairman of Mars, Inc. and in 1964 he merged the company with his Food Manufacturers, Inc. By agreement, the name of the merged company was Mars, Inc.
Mars, Inc. has continued to expand, both through acquisitions (such as its purchase of the Dove Barbrand in 1986) and by creating new products, not all of which were successful. Mars tried to launch a version of M&M’s peanuts that copied the coloring and styling of Hershey’s Reese’s Pieces. But Hershey sued Mars, maintaining that Mars was capitalizing on Hershey’s goodwill and investment in Reese’s Pieces. The Hershey Company won.
Today, Mars, Inc. is a $20 billion operation with interests from Helsinki to Hong Kong. Mars controls 15 percent of the global candy market. Mars is four times larger than Hershey on a global basis, but Mars’s leading market is in the United Kingdom, not in the United States.
