Dove Ice Cream Bars are packaged at Mars’ factory in Burr Ridge, Illinois.
Source: Mars
Candy giant Mars is trying to make a name for itself in a new category: ice cream.
The family-owned company is aiming for its ice cream business to reach $1 billion in global sales by 2030. In May, Mars executive recruited Anton Vincent to lead his global ice cream company, expanding his current role as president of Mars Wrigley North America.
Mars faces stiff competition to fulfill its ambition in the US, but the company has invested in the business. It has spent $50 million upgrading its ice plant in Burr Ridge, Illinois and has earmarked another $20 million for the facility it has not yet spent.
Mars has also expanded its portfolio with new flavors such as M&M’s Cookies and Cream Ice Cream Cookie Sandwiches and Twix Cookie Dough Ice Cream. Being used $5 billion acquisition or Kind North America, best known for its nut bars, to push for plant-based ice cream substitutes.
While summer is still the biggest season for ice cream sales, Mars is also trying to boost sales in the fall and winter through a partnership between the National Football League and the Snickers Ice Cream Bar.
Mars wants to increase its share of the ice cream market as part of a broader venture. In addition to candy and ice cream, Mars also owns a large pet care segment and other food brands, including Combos Stuffed Snacks and Ben’s Original Rice.
The bet on ice cream has paid off for the company. Over the past five years, global ice cream sales from Mars have increased by 42%. The Dove Ice Cream brand alone grew 12% last year. As the segment grows, the US accounts for more than half of the company’s ice cream business.
As Mars pours resources into the ice cream industry, the company will discover whether its well-known brands are enough to meet its ambitious $1 billion sales goal.
Mars’ ice targets depend on the old and the new
Mars entered the ice cream category in 1986 when it bought Dove, then known only for its ice cream bars before the candy company expanded into chocolate. Three years later, Mars introduced the Snickers Ice Cream Bar, now the best seller in its portfolio, followed by M&M’s Ice Cream Cookie Sandwiches.
“We don’t have the biggest ice cream brands, but we do believe we have the biggest ice cream brands,” Shaf Lalani, the US head of Mars Ice Cream, told CNBC.
Today, according to data from Euromonitor International, Mars ranks among the top 10 U.S. ice cream makers by retail sales. But it is far surpassed by the owner of Haagen-Dazs General Mills; Ben & Jerry’s parent Unilever; and Blue Bell Creameries, which is privately owned.
“Mars Inc.’s ice cream brands face fierce competition as they are a long way from the leading spot in the US ice cream market,” said Carl Quash, head of food and nutrition research at Euromonitor.
While it tries to make up for that ground, Mars’ primary strategy for growing its ice cream sales is centered on reversing what it did with Dove: take other candy brands and turn them into frozen treats.
“There is a crossover rate of about 64% for people who buy our confectionery products and participate in our brands, which has given us a lot of confidence that we have the right to win,” Lalani said.
Outside of Snickers and M&Ms, Mars’ other candy brands are showing promise in their transition to ice cream. Twix Ice Cream is the fastest growing product in the company’s ice cream portfolio. Lalani thinks the frozen version of the Milky Way candy bar – known outside the US as the Mars bar – has the potential to be the next big hit.
While Lalani said Mars’ existing portfolio has plenty of runways, not all of Mars Ice Cream’s growth will be organic. Acquisitions will also boost sales and attract new customers.
Kind’s frozen treats, for example, arrived at Whole Foods a few months ago, adding another retail chain to Mars’ frozen food footprint.
In December, Mars announced it was buying Tru Fru, a startup that makes frozen and freeze-dried chocolate-covered fruit. The financial terms of the deal were not disclosed.
Inside the ice factory
Dove Bars are dipped in chocolate at the factory.
Source: Mars
Nearly four decades ago, when Mars bought Dove, it also bought the brand’s manufacturing facility in Burr Ridge, Illinois. Today, the factory is responsible for making all of the ice cream the company sells in the US, accounting for 55% of global demand.
As sales accelerated, the company had to invest in the sprawling facility to add capacity and the ability to create new products such as Kind’s frozen treats studded with nuts. The factory has several lines dedicated to the types of products Mars makes: sandwiches, bars and sticks.
Mars’ manufacturing process is largely automated and workers are on hand to monitor the machines. Many of the ingredients come from elsewhere – the ice cream mix and M&M cookies from regional suppliers, the peanuts from the Mars roaster – and they all come together at the Burr Ridge factory.
But it is a delicate process that requires precision to balance ice cream consistency, quality and temperature requirements.
For example, the Snickers Ice Cream Bars have a layer of ice cream, the candy’s signature peanuts and caramel, and a chocolate exterior. In the chilly factory, the chocolate must stay warm enough to melt on top of the ice bar, which then moves the conveyor belt quickly through a freezing tunnel so that the ice does not melt.
From there, the Snickers Ice Cream Bars move past sensors that detect production errors, such as being too big or too small. The Snickers peanuts are often the culprit.
The machine quickly pushes aside the rejections and joins a mob of fellow outcasts who slowly melt. The floors of the production line are strewn with the chocolate ashes of those who failed to meet Mars standards. To prevent the ice cream bars from melting, the conveyor belt must move quickly, leaving no time to correct the misfits.
But those who make the cut go down to get wrapped in the Snickers wrapper. Mechanical arms use small vacuum cleaners to pick up the Snickers bars without crushing them and place them in wrappers, which are then placed in individual boxes and boxes.
New products also bring new production challenges. Kind’s frozen bars, for example, are meant to taste the same in every bite, but according to Romain Lepicard, head of Mars Ice Cream’s research and development team, the nut chunks presented difficulties in achieving that level of consistency.
The $50 million Mars has already spent has largely been spent upgrading the line dedicated to its ice cream bars, which can produce hundreds of thousands of Snickers Ice Cream Bars per day. The investment also went into a number of other technical upgrades, such as digital screens that help the facility go paperless.
Mars will spend the additional $20 million investment on increasing the number of ice cream bars the plant can make. The company plans to invest in equipment that will allow it to make more components for the Snickers Ice Cream Bars, such as caramel, plus other production line capacity additions.