Hershey`s vs. Mars

Hershey’s vs. Mars
MGT 250
Irini Bua
Stephanie Deodat
Sawhill Busre
Charlie DiMaggio
Piji Chen
Karina Moscoso
History – Hershey’s
• In 1894, Milton Hershey made a decision to open a company to produce
chocolate. It was named Hershey Chocolate Company and was located in
Lancaster, Pennsylvania. In 1900, the company originally began producing
milk chocolate in bars, wafers, and other shapes. Chocolate being a
“luxurious” item, Hershey made it affordable for all.
• By 1905, Hershey’s Co. became a complete success. Milton Hershey built a
new factory in Derry Township, PA, where ports provided imported sugar
and cocoa beans, and dairy farms resided in the area.
• In 1907, Hershey’s Kisses chocolates were introduced as well as Mr.
Goodbar Candy Bar (1925), Hershey’s Syrup (1926), and the Krackel Bar
History - Hershey’s cont.
• When World War II began, Hershey’s Co. started producing a
survival ration bar for military use, where they earned five
Army-Navy “E” Production Awards for their contributions.
• H.B. “Harry” Reese’s Candy Company and Hershey’s Chocolate
Corp. had a good relationship. When Reese died in 1956,
Reese’s Co. was sold to Hershey’s.
• Renamed to Hershey Foods Corporation in 1968, it expanded
to product lines and food products.
• Today, Hershey Company is one of the leading manufacturers
of chocolate and non-chocolate products in North America.
Hershey’s Co. also have expanded worldwide and have
operations in more than 90 countries.
History – Mars
• Mars began in 1911 as the Mar-O-Bar Co., a snack food
business founded by Frank C. Mars of Tacoma, Washington,
who made a variety of buttercream candy in his home
• In 1920, Mars relocated to larger quarters in Minneapolis, where
Milky Way bars (1923) were created. Milky Way bars became an
instant success.
• Later, Mars moved to Chicago in need of more space because
of expansion in 1929.
• In 1930, Snickers brand (without the chocolate coating) and 3
Musketeers (1932) is launched. Mars Limited is renamed Mars
History – Mars cont.
• In 1932, Forrest Mars (Frank Mars’s son) goes to the
United Kingdom to pursue his dream of building a
business. While there, Mars enters into the Petcare
business. He later returned in 1940 to the United States
and founded M&M Limited in Newark, New Jersey, to
manufacture chocolate candies in a sugar shell.
• In 1943, Mars ventured into the main meal business,
which included a wide selection of rice products,
including whole grain, savory, boil-in-bag, fast cook,
instant, and frozen rice as well as other products. It was
named Uncle Ben’s Incorporated
History – Mars cont.
• Throughout the years, Mars, Inc. went nationwide
and worldwide with their confectionery, pet food,
and other food products in more than 100 countries.
• In 2009, Mars, Incorporated becomes the first global
chocolate company to commit to fundamentally
changing the way sustainable cocoa farming practices
are advanced.
The Competition
Competition between
Hershey Co. & Mars Inc.
Their Competition
• Aside from themselves, both Hershey Co.
and Mars Inc. have the same two main
competitors within their targeted industry.
• Their two main competitors within the
candy and the snack food industry are
• Nestlé S.A.
• Mondelez International Inc.
The Rivalry
• The Hershey Company and Mars Inc. have always been fierce
competitors. They have clashed with each other in the past and
will continue to do so in hope of gaining market share.
• Although both Hershey Co. and Mars Inc. both produce and
manufacture a vast variety of products, their competitive rivalry
comes mainly from their candy products with Hershey’s Kisses
and Mars’ M&Ms being the top contenders.
Top Company Brands
America’s Favorite Chocolate
• In the constant battle of the candy brands,
Hershey's Kisses are the top rated chocolate
candy brand for the fifth time in eight years.
• America's favorite little chocolate candy
unseats one of its most enduring competitors,
M&M's Plain Chocolate Candy, which has
occupied the top spot whenever Hershey's
Kisses doesn't.
• Hershey’s Reese’s Peanut Butter Cups has
consistently appeared in the top ten list over
the past eight years and for the first time has
had a rated higher than M&Ms.
America’s Top Chocolate Brands
• This year, Hershey's and Mars
candy products dominate the
top chocolate brands.
• Hersey's brands include
Hershey’s Milk Chocolate
Candy Bars, Kit Kat Bars, and
Reese's Pieces, which came top
• Within the Mars family, Peanut
M&M's, Snickers, and Twix
also make the list of top
Top non-Chocolate Candy Brands
• As for the non-chocolate candy, Mars’
Life Savers Candy takes the top spot,
while Hershey’s Jolly Rancher Candy came
in second. Other non-chocolate brands
making the top of the list include Tootsie
Pops, Skittles, and Starburst.
• Mars Inc. trumps the top gum
brands as they own Extra Gum
which leads the top of the Brands,
as well as 5 Gum, and Orbit.
Hershey’s Strengths
Huge market share in North America
Marketed with more than 50 brand names
High Quality(85% of their chocolate lineup is pure)
Good Corporate responsibility and community
Hershey’s Weaknesses
Centralized management; No divisional manager.
Not able to establish global channels of distribution.
Less than 10% sales are outside of U.S.
Mostly chocolate/candy based products.
Mars Inc. Strengths
Large global presence
Named one of best companies to work for
Diverse products
High brand preference to consumers (M&M)
Big community involvement
Mars Inc. Weaknesses
Lack of innovation to create new candy bars
Too many products
Milky Way’s has low sales percentage on U.S
Private-owned Company
Management – Hershey’s
• Invest in programs and education that
enable employees to achieve and maintain healthy
• Wellness programs include: The Chocolatetown
Challenge, “The Old Switcharoo” , and a walk-to-run
5K clinic.
• There were no work-related fatalities at any Hershey
facility in 2010; Hershey has not had an employee
work-related fatality in the past 25 years.
The Chocolatetown Challenge
• A fitness and wellness challenge designed to
promote health, and friendly competition among
the employees, retirees and families of seven
companies within the Hershey, Pennsylvania
• Has taken place annually since 2008.
• This year’s event included a 5k race and 1 mile
fun/run walk, physical fitness activities and a
health fair.
The Old Switcharoo
• Designed to shift employee’s focus away from big
lifestyle changes that may be overwhelming to
smaller, everyday changes.
• Participants swap a less healthy habit like watching
television for a healthier habit like walking 10
Other Wellness Programs
• “WaterWorks”- Provides educational resources to
help participants understand how much water they
need and how they can get hydration from other
• “Spring into Fitness”- A wellness initiative to
jumpstart fitness for the spring and summer months.
• “Get Fit on Route 66,”- Participants trace the famous
route of the legendary highway by tracking the
amount of time they spend exercising.
Afinity groups
• Are culturally centered, life stage oriented and personally and
professionally specific.
-Asian Affinity Group
- African American Affinity Group
- Hispanic Affinity Group
- Network of Young Professionals
- PRISM (GLBT Affinity Group)
- Sales Diversity Council
- The Women’s Council
The Woman’s Council
• Have created lounges to most Hershey,
Pennsylvania office buildings for mothers who
have returned to work but are still nursing.
• Created an internal mentoring program that
matches protégés with mentors to help
employees develop and achieve career and
personal growth goals.
• To date, the CSR Network has:
- Initiated a program on commuter services
- Established the company’s page on Freecycle
@ Work
- Organized a recycle event analyzing employee
participation in corporate recycling efforts
- Mobilized donations to a food bank in need
Management - Mars Inc.
• Employees and even the president have to punch in every
day at most Mars sites , if you're late, you get docked 10%
of your pay.
• The company encourages the idea of developing crossdivision talent .If you've had enough of Skittles brand
management experience, you might find yourself working
in one of the companies other brands like the pet food
• Employees have the freedom to experiment with ideas
and management has the patience to train.
“Five Principles of Mars”
The principles are on the walls of its 400 offices
and manufacturing sites in 73 countries
Community Involvement
• Mars Volunteers : Employees get paid time
off to clean parks, aid medical clinics, and
plant gardens
• Mars Ambassadors: Highly competitive
• Only a select few spend up to six weeks
working with Mars-related partners in remote
areas; for example, six employees spent a
week in Ghana with growers of cocoa beans.
Hershey’s Marketing Strategy
Motto: “Bringing sweet moments of Hershey
happiness to the world every day”
Hershey Co.
• The Hershey Company makes well-known chocolate and
candy brands such as Hershey's, Kisses, Reese's peanut
butter cups, Almond Joy, Twizzlers, as well as Mounds
candy bar, York peppermint pattie, and Kit Kat wafer bars.
• Hershey also makes grocery goods and pantry items
including baking ingredients, chocolate syrup, cocoa mix,
cookies, snack nuts, mints, bubble gum and even
Marketing Strategy – Hershey’s
• Selection of the right target market when it comes to
promoting a certain product is vital.
• Hershey’s chocolate was originally known to target only
children, however, over the last decade, marketing
strategies have been more focused towards adult.
• The introduction of the Hershey’s “kiss” has been
• Studies show that 55 percent of chocolate consumption is
by adults
Marketing Strategy – Hershey’s cont.
• Hershey highly relies on in store promotion as well the
quality and history of their products to attract customers
• Bite size candies are more appealing to adults because
they feel less guilty about indulging their sweet tooth.
• Hershey had dramatically decreased advertising spending
but after great criticism released a new marketing plan due
to increased competition by companies such as Mars Inc.
Marketing Strategy – Hershey’s
• Export to over 90 different
• Have their own theme park
• Leader in the United States in
for dark and premium
chocolate segments
• Have their own cookbook
which shows how to use
Hershey’s chocolate in different
• Inflation
• Higher public awareness
towards the health effects of
consuming to much
• Decline in the Asian market
• Increase in variable and fixed
Marketing Strategy
Mars Inc.
• Mars makes worldwide favorites such as M&M's,
Snickers, and the Mars bar as well as 3 Musketeers,
Dove, Milky Way, Skittles, and Twix.
• It also owns and produces the Klix and Flavia
beverage systems, Combos and Kudos snacks, as
well as Uncle Ben's rice, and pet food.
• Mars owns the world's largest chewing gum
maker Wm. Wrigley Jr. Company as well, after
recently buying it for around 23 Billion.
Marketing Strategy – Mars Inc.
• Mars Inc. relies heavily on digital advertising such as
• Targets all age groups with a variety of products
besides chocolate
• Mars chocolate is drastically growing in popularity
due to heavy focus on advertising products such as
Marketing Strategy - Mars Inc.
• Mars is a highly
recognized and preferred
brand by customers
• Large variety of products
• Highly known and
demanded in international
• Well known advertising
• Lack of creativity when it
comes to creating new types of
• Most advertising money is
aimed towards M&M’s
• Many products that it has to
• Hershey’s still leads in US
chocolate production and
“Anything for Love”
• Mars Super Bowl AD
Hershey Co. Annual Earnings
Hershey Co. Annual Revenues
Hershey Co.
Share Price Performance
(previous 10 years)
Increasing Dividend Payout
• Hershey pays a regular quarterly dividend of
38 cents per share, representing an annual
dividend yield of 2.1%.
• The company has been raising the payout
every year since 2010, including a 10%
increase earlier this year.
Attractive Valuation
• Hershey currently trades at a forward price-to-equity
(P/E) of 22.25x, in line with the peer group average.
• Also on a price-to-sales basis the stock is trading in
line with the peer group average of 2.57x.
• However, the company has a trailing 12-month
return on equity (ROE) of 76.3%, which is
significantly above its peer group average of 6.7%.
Mars Inc. Revenue
Mars Inc. Revenue 2012
Mars Inc. Chocolate Statistics
• Was the first global chocolate company to commit to
sourcing all of their cocoa from certified supplies by
• In 2011, they purchased 10% of their cocoa from
certified sources, and in 2012 they stated they
expected to exceed 20% and become the world’s
largest user of certified cocoa.
• They currently buy cocoa certified by the Rainforest
Alliance, UTZ Certified and Fairtrade.
Mars Inc. Goals
• TARGET: Reduce direct fossil-fuel energy use and
greenhouse gas emissions by 25% by 2015 from a
2007 baseline.
• PROGRESS IN 2011: Fossil-fuel based energy use
reduced by 6% between 2007 and 2011. Greenhouse
gas emissions reduced by 5% between 2007 and
Mars Inc. Goals
Reduce water use
TARGET: Reduce water use by 25% by
2015 from a 2007 baseline.
PROGRESS IN 2011: Water use reduced
by 18%.
Mars Inc. Goals
Zero waste to landfill sites
TARGET: Achieve zero waste to landfill by 2015.
PROGRESS IN 2011: Waste to landfill reduced
by 51%.
33 of 126 sites* achieved zero waste to landfill in
Hershey’s vs. Mars
To conclude our presentation, Hershey’s Co. and Mars
Inc. both are prosperous food companies. However,
they each dominate in different areas in the food
industry. Hershey’s is more successful with the
chocolate and candy division, while Mars is much more
diversified ranging from chocolate/candy to pet food
products, etc. They’ll continue to be fierce competitors
against one another.

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