What other ostentatious companies in the food and beverage industry like Coca-Cola can learn from them? Everything, from doing business right to taking care of stakeholders and the environment.
Note: Mars is as big a behemoth as Coca-Cola.
Forrest Mars Sr, the founder of Marc Inc, had a brilliant business idea forged out of a eureka moment and a management philosophy learned from his father, a chocolatier in the US. The revolutionary idea was to pour malted milk chocolate as filling into a candy bar. During the 1970s, when Asia and Africa faced famines, Europe felt the pinch of high grain prices and food shortages. People needed calories at low cost, and Mars took off as a good substitute for battling the calorie deficit European market.
Forrest Mars Sr noticed that the Europeans were obsessed with pet dogs, which led Mars Inc to venture into the pet food market. So in 1935, he b get a company that made Chappie, a tinned dog food. Even the most premium dog food brand, Royal Canin, is owned by Mars Inc. Pet food accounts for nearly 60% of its sales.
Mars Inc is family-owned, whereas Coca-Cola is publicly traded. In 2014 they had Revenue of around $45 bn, larger than Coca-Cola’s revenues. The success is credited to their simple business philosophy devised by Forrest Mars Sr in Slough, a small town in the UK.
They are internally known as
- Quality,
- Responsibility,
- Mutuality,
- Efficiency and
- Freedom
How do these five managerial and business terms strike the right balance between purpose and profit?
The family dynasty worth 96Bn runs the board with various priorities ranging from sustainability to welfare of employees (known as Martians). But performance with long-term growth is equally important as positive social impact and trust.
The shareholders reap less than a tenth of profits as dividends. That means most of the money goes back to the business. In the early days of Amazon, Jeff Bezos returned every penny earned to the company to strengthen the foundation. the current Mars family lead meager lives that fit with Mars egalitarian ethos and preference for privacy
Remember using the term “Eating your own dog food”? It was first practiced literally in Mars Inc. Everyone in the family tried mouthfuls of canned dog food to check its quality. The practice continues till today, though with far less frequency.
Delegation of responsibility is imbibed into their culture. Mars has a relatively flat management structure, with no cushy perks for bosses such as dedicated parking spaces. Martians are encouraged to take responsibility at a younger age and have been given the freedom to make big decisions. There is no punishment for a calculated business risk gone south.
For the stakeholders (what Mars calls mutuality), it insists on putting the interest of the customer, worker, supplier, community and the environment alongside the company shareholders. Nearly 1Bn is earmarked to support sustainable initiatives in renewable energy.
With low debt, lots of cash and products resilient to economic turbulence, Mars is in a strong position to expand further. Some of its competitors, such as Kellogg, a food company, are flogging parts of its business.
Conclusion
It does not discuss strategy; however, the family is more open about its commitments to society and keeps business matters tightly under wraps. That legacy, which also dates back to Forrest Sr, may start to change. In 2020 Mars opened the Slough factory to TV cameras for the first time.
This content has been adapted from the economist Article publish in the first week of July 2022
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