Dove ice cream sticks are packaged at Mars’ facility in Bull 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 aims to reach $1 billion in global sales for its ice cream business by 2030. In May, Mars named executive Anton Vincent to lead its global ice cream business, building on his current role as president of Mars Wrigley North America.
Mars faces stiff competition to achieve its U.S. ambitions, but the company has been investing in the business. The company has spent $50 million to upgrade its ice cream factory in Burr Ridge, Illinois, and allocated an additional $20 million for the facility, but has yet to spend it.
Mars has also been expanding its product portfolio with new flavors such as M&M’s Cookies and Cream Ice Cream Cookie Sandwich and Twix Cookie Dough Ice Cream.it uses its $5 billion acquisition Best known for its nut bars, the North American company has launched a plant-based ice cream alternative.
While summer remains the biggest season for ice cream sales, Mars is also trying to boost business in the fall and winter through a partnership between the National Football League and its Snickers parlors.
Mars aims to expand its share of the ice cream market as part of its broad-based business. In addition to candy and ice cream, Mars also has a large pet care division 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, Mars’ global ice cream sales have grown 42%. The Dove ice cream brand alone grew 12% last year.As the market segment grows, The U.S. accounts for more than half of the company’s ice cream business.
As Mars pours resources into its ice cream business, the company will learn whether its familiar brands are enough to meet its ambitious $1 billion sales goal.
Mars Ice Cream Targets Depends on Old and New
Mars entered the ice cream business in 1986 with the acquisition of Dove. Before the confectionery company branched out into chocolate, it was known only for its ice cream bars. Three years later, Mars launched a Snickers ice cream bar, now the best-selling item in its portfolio, followed by M&M’s ice cream cookie sandwiches.
“We don’t have the biggest ice cream brand, but we believe we have the biggest ice cream brand,” Shaf Lalani, head of Mars Ice Cream US, told CNBC.
Today, Mars ranks among the top 10 U.S. ice cream makers by retail sales, according to Euromonitor International.but it far exceeds the haagen dazs boss general mills; Ben and Jerry’s parents Unilever; and Blue Bell Creameries, which is privately held.
“The Mars ice cream brand faces stiff competition and is far from the leading position in the US ice cream market,” said Carl Quash, head of food and nutrition research at Euromonitor.
In trying to fill that shortfall, Mars’ main strategic focus for growing ice cream sales has been to reverse what it did with Dove: take other confectionary brands and turn them into frozen treats.
“The crossover rate of people buying our confectionary products and engaging with our brand is about 64 percent, which gives us a lot of confidence that we have a right to win,” Lallani said.
In addition to Snickers and M&Ms, Mars’ other confectionery brands have also shown promise in their transition to ice cream. Twix ice cream is the fastest-growing product in the company’s ice cream portfolio. Lallani thinks the frozen version of Galaxy Candy (known as the Mars Bar outside the U.S.) has the potential to be the next big thing.
While Lallani said Mars has plenty of room to grow with its existing product portfolio, not all of Mars’ ice cream growth has been organic. Acquisitions will also help boost sales and bring in new customers.
For example, Kind’s frozen meals entered Whole Foods a few months ago, adding a new retail chain to Mars’ frozen business.
In December, Mars announced the acquisition of Tru Fru, a startup that produces frozen and freeze-dried chocolate fruit. Financial terms of the deal were not disclosed.
Inside the ice cream factory
Dove bars are dipped in chocolate at the factory.
Source: Mars
When Mars acquired Dove nearly four decades ago, it also purchased the brand’s manufacturing facility in Bull Ridge, Illinois. Today, the plant is responsible for all the ice cream the company sells in the U.S., accounting for 55 percent of its global demand.
As sales accelerated, the company had to invest in sprawling factories to increase capacity and the ability to produce new products, such as Kind’s frozen treats with nuts. The facility has a unique line dedicated to Mars product types: sandwiches, bars and bars.
Mars’ manufacturing process is largely automated, with workers standing by to monitor the machines.Many ingredients come from elsewhere – ice cream mixes and M&Ms from regional suppliers, peanuts from Mars’ bakery — all assembled at the Burr Ridge facility.
But it’s a delicate process that requires a precise balance of ice cream consistency, quality and temperature requirements.
The Snickers ice cream bar, for example, features a layer of ice cream, the candy’s signature peanuts and caramel, and a chocolate coating. Inside the frigid factory, the chocolate has to be kept warm enough to melt on top of the ice cream sticks, and conveyor belts are then zipped through freezing tunnels so the ice cream doesn’t melt.
From there, the Snickers ice cream sticks pass over sensors that detect production errors, such as being too big or too small. Snickers peanuts are often the culprit.
The machine quickly pushed the waste aside to join a group of outcasts, slowly melting away. The floor of the production line was strewn with chocolate ashes that did not meet Mars standards. To keep the ice cream sticks from melting, the conveyor belt had to move quickly, leaving no time to correct mistakes.
But those who made the cut were moved to Snickers packaging. Using a small vacuum, the robotic arm picks up the Snickers bars without crushing them, and places them in wrappers, which are then placed in individual boxes and placed in cartons.
New products also bring new manufacturing challenges. For example, Romain Lepicard, head of Mars’ ice cream research and development team, said that Kind’s frozen sticks are designed to taste the same in every bite, but it’s hard to achieve that level of consistency with nut blocks.
The $50 million that Mars spent was mainly to upgrade its ice cream stick production line, which can produce hundreds of thousands of Snickers sticks a day. The investment also goes toward a number of other technology upgrades, such as digital screens that will help the facility go paperless.
Mars will invest an additional $20 million to further increase the plant’s ice cream production. The company plans to invest in equipment to help it produce more Snickers stick ingredients, such as caramel, and other upgrades to the line’s capacity.