Mars Inc.
1 - COMPANY BACKGROUND
Mars, Incorporated (Mars or “the company”) is a privately-held company, primarily engaged in the manufacture and sale of confectionary products, pet food products, drinks and staple foods. The company operates in about 68 countries worldwide. It is headquartered in McLean, Virginia and employs about 65,000 people.
The company's net sales are estimated to be around $30,000 million. Mars is a private company and has not released its annual report. Therefore, its financial details are not available.
Mars produces and distributes branded snack foods, main meal foods, drinks and pet care products. It also makes drink vending equipment and electronic automated payment systems. The company operates more than 130 factories, in about 75 countries worldwide.
The company operates through six business segments: chocolate; petcare; Wrigley gum and confections; food; drinks; and symbioscience.
The company's chocolate segment operates under brand names such as M&M's, Snickers, Dove, Galaxy, Mars, Milky Way and Twix. The major brands under the petcare segment include Pedigree, Whiskas, Sheba, Cesar and Royal Canin. In the
Wrigley gum and confections segment, the company owns Extra, Orbit, Doublemint, Skittles, Starburst and Altoids. The company operates its food segment under the Uncle Ben's, Dolmio, Seeds of Change, Ebly and Masterfoods brand names.
Its drinks segment includes Klix and Flavia brands. Furthermore, the company's symbioscience segment owns brands such as Wisdom Panel MX, Seramis and Cocoapro.

2 - SWOT ANALYSIS
Mars is a privately-held company, primarily engaged in the manufacture and sale of confectionary products, pet food products, drinks and staple foods. The company owns an extensive portfolio of products and brands that it offers through its six segments including chocolate, petcare, Wrigley gum and confections, food, drinks, and symbioscience. The extensive product portfolio of Mars helps it to cater to the needs of the various markets. In addition, the wide brand portfolio results in steady revenue growth and provides the company with a competitive advantage. However, with increasing popularity of private labels, Mars may see the erosion of its market share and is likely to face a bigger challenge.

Strengths:
Comprehensive product portfolio complemented by strong brand recognition:

The company owns an extensive portfolio of products and Brands.The Company offers a wide range of products under six segments including chocolate, petcare, Wrigley gum and confections, food, drinks, and symbioscience. The company sells its chocolate products under the brand names such as M&M'S, Snickers, Dove, Galaxy, Mars, Milky Way and Twix. Its petcare products are sold under Pedigree, Whiskas, Sheba, Cesar and Royal Canin brand names. The company sells Wrigley gum and confections under Extra, Orbit, Doublemint, Skittles, Starburst and Altoids brand names. Further, the company offers wide range of food products under the Uncle Ben's, Dolmio, Seeds of Change, Ebly and Masterfoods brand names. Its drinks segment includes Klix and Flavia brands. Some of the company's brands like Mars, M&M, Snicker, Dove, and Milky Way are among the leading brands in the US confectionary segment. Others like Wrigley's brand of gums and confections and Pedigree pet foods enjoy wide recognition in the Asia and other regions. The Klix and Flavia are one of the leading suppliers of the drink vending solutions in the UK market. The company's brands are popular world-wide, and seven of its brands occupy the top 20 confectionary best-sellers list.
The extensive product portfolio provides a diversified source of revenue for the company, while the strong brand recognition has enabled better market penetration for the company. The above mentioned competitive advantages enable the company to strengthen its leadership position in the world's confectionary, and pet care markets.
Diversified operations across the globe strengthens the company’s revenue generating capabilities in the light of positive economic outlook:

The company has a strong geographic presence worldwide. The company operates in about 70countries worldwide. Its products are consumed in over 100 countries spanning North America including the US and Canada, Europe (France, Germany, Switzerland, the UK, Ireland, Austria,
Poland), Latin America (Argentina, Brazil, Mexico, Peru, Colombia), Asia-Pacific (India, China, Japan, Australia, Indonesia, Taiwan), Africa (South Africa, Morocco) and Middle East (the UAE, Egypt) regions.
Diversified geographical operations across the globe enables the company to hedge the risks of revenue loss in matured markets like North America, and

Weaknesses:
Ownership Status:

Mars faces problems in funding its growth owing to its ownership status. It is a private and small company as compared to some other larger players that operate in its markets. The company does not have the kind of access to financial resources that public companies have. Mars competes with public companies such as Nestle and Hershey Company, which have a clear advantage in terms of raising capital.
Publicly held corporations have a greater financial flexibility in funding organic and inorganic initiatives. Public companies besides having better access to capital markets will fund acquisitions through stock transactions. Private ownership restricts financing options available to the company.

Opportunities
Growth prospects in the health and nutritional food markets:
The health and wellness food market has seen enormous growth over the past few years in both developed and emerging markets. The ingredient composition of the food products is increasingly influencing the consumers’ purchasing decisions. According to a recent study, 77% of consumers read ingredient statements on packaging and are using nutritional information to make their purchasing decisions. This movement has taken firm hold across North America, Europe as well as in emerging markets such as Russia, Mexico and Brazil. Global health and wellness food and beverages industry outperformed the overall food sector's growth rate by approximately 18% between 2005 and 2007.
Organic and fortified or functional foods saw annual growth rates of 20% to 30% during the same period. The tremendous growth in the health and wellness food industry has also driven the growth of nutritional ingredient industry. The strengthening of health and wellness tend was demonstrated in US, where the nutritional products industry reported 5% increase in sales even in a recessionary environment.
Mars has introduced several versions of health confectionaries in recent years to tap on the increasing trend towards health and nutrition. Continuing the trend, the company is planning to introduce its Mars bar, Snickers, Milky Way and Topic brand confectionary with 15% less saturated fat per bar compared with its previous recipes, in the 2010 fiscal. The company claims that the products now have the equivalent of 35-45% less saturated fat than the average of 25 chocolate brands per 100 gram. Besides, the company also markets flavanols, and phytonutrients based products under the Cirkuhealth and Cocoapro brand names.
Similar launches and offerings in the health and nutrition segment would enable the company to source earnings from one of the fastest growing product segments.

Scope of business expansion in the groups emerging countries:
Mars, a leading global player in the confectionary and petcare market, is strategically looking for expansion in the emerging countries like India and China.
In India, the company operates through its subsidiaries Mars International India, Royal Canin, and Wrigley’s India. The Mars International India recently launched the international range of snacks and treats for dogs under its pet food brand, Pedigree, in 2009. As per estimates, the number of pet dogs in the country is nearly 2.2 millions, and is growing 26% annually. The launch of Pedigree's range of snacks and treats comes in light of these developments. These snacks and treats provide functional benefits like reducing risk of dental diseases, help in development of bones and teeth, and strengthening of the immune system. Initiative like this would further strengthen the company's position in the Indian petcare market.
On the other hand, China, the most populous country but still accounting for less than 2% of the global confectionary consumptions, provides growth prospects for Mars’s leading confectionary brands. China currently consumes about 146 million pounds (66.5 million kilograms) of chocolate annually, or 1.8 ounces (50 grams) per person. As compared to this, Switzerland, consumes nearly 167 million pounds (76 million kilograms) of chocolates annually, or 22 pounds (10 kilograms) per person. Americans, by comparison, consume approximately 3,000 million pounds (1,400 million kilograms) a year, or 11.7 pounds (5.3 kilograms) per person annually. With rising per capita income in China, the market for confectionary is also projected to grow. Mars, which markets some of the leading consumer brands in the country, is well-positioned to capitalize on the Chinese opportunities.
Besides, India and China, the company also has operations in other emerging countries like Brazil, Malaysia, and South Africa. The company could leverage its scale-benefits and brand recognition to tap the growth potential in these markets also.

Threats:
Increased competition from private labels:

Private-label goods, generally lower priced products sold under a store's own name, are a constant threat to other branded goods, especially during times of economic weakness. Brand owners include retailers, distributors and wholesalers. Some of the top private labels sold in the US include Ahold USA, Safeway and Wal-Mart. Consumers' incessant quest for better value has affected food and beverage companies in a variety of ways. Sales trends indicate that consumers have become increasingly price-conscious and therefore can be easily swayed by in-store promotions and advertising. Growth in private-label consumption is also playing a significant role. In some of the largest private-label categories, sales gains of private-label goods have even outpaced those of branded products.
With increasing popularity of these private labels combined with the depth of their penetration in local markets, Mars may see the erosion of its market share in certain geographies and is likely to face a bigger challenge from these private levels in future.

Agitation against the company by consumer groups:
The consumer agitation against the use of artificial coloring in confectionery products is on rise in the US. In 2008, Tuesday, a well known food safety advocacy group in the US called on federal regulators to ban several colorings. The group claims that these colorings are linked to hyperactivity in children. Although the US Food and Drug Administration rejected such claims, the food safety group is of the opinion that by putting a spotlight on the issue, food producers would voluntarily drop artificial colors.
Mars continues to use artificial dyes in the US, in spite of rising food safety advocacy groups. These artificial dyes are less expensive and look more vibrant than natural colorings. Similar agitations against the company could dilute the company’s brand image and its popularity; leading to loss of certain customer base. Furthermore, this could have financial implications when these agitations results in lawsuits filed against the company. The company could have to incur legal expenses and damage settlements, in these scenarios, which in turn could reduce its profits and margins.

3 - FINANCIAL STATEMENTS:
Mars is a Private Company, and private companies do not file annual reports, unless they happen to have public debt.
4 - RECENT NEWS:
Press
Jan,2012
Middle East & Africa/Petcare
30,000 Two and Four-Legged Visitors Expected for Middle East’s Largest Pet Event From Arabian Heritage Events to Police and Agility Displays to Fabulous Fancy Dress, the Pedigree® & Whiskas® Dubai Pet Show is a Don’t Miss Family Day Out on 3rd February 2012
Dubai, United Arab Emirates; More than 30,000 two- and four-legged visitors are expected to turn out for the Pedigree® & Whiskas® 2012 Dubai Pet Show, held for the second year running at the Dubai Rugby Sevens stadium, on Friday 3 February from 08:00 onwards. The Middle East’s biggest event for animal lovers will offer more than 15 categories of competition as well as fun and educational classes, complemented by saluki displays and demonstrations from the canine units of the UAE police force.

Visitors can now sign up to receive event updates and to register their pets for the judged competitions here, www.dubaipetshow.com On the day, there will be nominal AED10 entry fee for adults and children will not be charged. As Pedigree® & Whiskas® Dubai Pet Show is a non-profit event, part of the proceeds from tickets will be donated to the event partners; K9 Friends and Sharjah Cat & Dog Shelter (SCADS).

Rahmah Alwazir, Marketing Manager, Mars GCC Pet Care, the manufacturers of Pedigree® & Whiskas® pet food, comments: “From the Arabian heritage of the saluki display to the agility and innovation witnessed in the police dog demonstrations, the Pedigree® & Whiskas® Dubai Pet Show has something to entertain and inform visitors of all ages. For more than two decades, the event has also promoted responsible pet ownership; working with charity partners such as K9 friends to re-home pets and educate our visitors on breeds and benefits of owning pets”.

Now in its 24th year, the non-profit Pedigree® & Whiskas® Dubai Pet Show is an integral part of the Middle East calendar for the animal-loving public of all ages, as well as the dog-owning community and parents who wish to educate their children on how best to help look after a family pet. The Pedigree® & Whiskas® Dubai Pet Show gives an annual meeting place for animal enthusiasts, to share stories and tips and while displaying their dogs’ fitness and stature in the exciting competition rounds.

In addition to the regular Show features, such as the Kids Entertainment Zone, Dog Health Check Station, and judged Best Fancy Dress and Best Crossbreed competitions, there will also be new elements for the 2012 event for the family to enjoy. The Pedigree® & Whiskas® Pet Health and Nutrition Consultation area, aims to help pet owners take better care of their animals, through talks from the experts at Waltham®, the world’s leading authority on pet care and nutrition, on topics such as diet, training and health. Visitors will be welcomed to the specially-designed Arabian Saluki Centre, where they can learn about the formidable desert Hounds and the Arabian heritage of hunting in the desert. One of the Pedigree® & Whiskas® Dubai Pet Show’s most avidly-anticipated elements are the police dog displays, working with officers and their canine companions from across the Emirates, who showcase the roles that police dogs play in protection and crime prevention.

For more information on the Pedigree® & Whiskas® Dubai Pet Show, please visit www.dubaipetshow.com

Sources
Mars. Incorporated, Company Profile¸ Datamonitor, 4th of November 2011.
Food Market Watch, Company Spotligh: Mars, Incorporated¸ July 2010.
Press Center, Mars Incorporated Website.