Packaging Iconic Brands Brings Mars Sweet Success

For the Masterfoods USA unit of Mars Inc., candy is indeed dandy. (And so are pet food and rice.) With estimated global revenues of more than $18 billion, Mars is America’s sixth-largest privately held company and its largest privately held food company. Its product line-up includes some of the most venerable, iconic brands in candy history, including M&M’s, Milky Way and Snickers. Other products include ice cream (Dove Chocolate Bars and ice cream bars based on its famous candy brands), pet food (Whiskas, Pedigree, Cesar, Sheba) and Uncle Ben’s rice and rice-based dishes.

These established brands form the foundation for some significant successes. According to a recent Bloomberg report, Masterfoods USA picked up market share over the recent holiday season with new varieties of M&M’s and Dove Chocolate Bars. The company ranks sixth on Food & Drug Packaging’s 2005 list of top food packagers. As a private company, Mars does not release financial data, but according to estimates from Hoover’s, its income has increased steadily from $15.5 billion in 1998 to $18 billion in 2005.

Mars’ brands may be well-established, but taking maximum advantage of them is an ongoing, ever-evolving process. Michael Payne, director of snack food packaging for Masterfoods USA, says the company puts out hundreds of new stock-keeping units (SKUs) a year, and processes up to 6,000 specs for discrete aspects of a packaging change, whether graphical or structural. (Masterfoods USA is a division of Mars Inc., with individual countries having their own units. Last year, reports hit the business media that Mars is planning to phase out the Masterfoods name. The company acknowledges such a plan but has not publicly announced a timetable to do so.)

 

Even the most seemingly simple changes can be challenging. One such change was last year’s use of the rear panel of Snickers bars to read “SATISFIES,” using the same typeface and color scheme as the product name. This allows the bars to be displayed with alternate sides facing up, showing the message “SNICKERS SATISFIES” over and over.

To make this work, Masterfoods USA personnel had to do more than just shuffle the graphics around. They had to figure out how to use the fin seal of the flowrapped film to print the required nutritional information, and how to reliably print the bar code in the film’s cross direction instead of the normal machine direction. As a result Masterfoods USA was awarded a 2006 DuPont Award for innovation in food processing and packaging.

Other recent candy packaging innovations of which Masterfoods USA is proud include a club-store pack of 30 mixed candy bars, which is sold in Sam’s Club, Costco and BJ’s; “My M&M’s” metal hexagonal tins, containing wedge-shaped paperboard cartons, each with a different flavor; and a stand-up reclosable pouch of M&M’s, also for club stores.

Then there is perhaps the ultimate in SKU segmentation: “personalized” M&M’s, bearing whatever message the consumer wants. Consumers can order these candies on-line, with two lines of eight characters per line, and specify two colors. Masterfoods started offering them in late 2004; sales have increased more than 50% from 2005 to 2006, and the company expects to reach sales of $100 million in the next year or so. (Operationally, the breakthrough was developing a proprietary print technology for the message, as opposed to the direct-transfer printing of the traditional “m.”)

The non-candy divisions of Masterfoods USA have been active in packaging innovation, too. Uncle Ben’s Ready Rice revolutionized rice packaging in 2002 when it came up with a way, as part of a retorting process, to cook rice in a flexible, microwavable pouch. (This came in the wake of the company’s release of pet food in a retorted pouch, released in 2000.)

More recently, the pet food division has come out with the Sheba Dome, a single-serve metal cup for Sheba cat food with a peelable foil lid; new multipacks for Sheba and Cesar dog food; and a multiwall paper bag with a slider zipper for Pedigree and The Goodlife Recipe dog food. This last innovation won an AmeriStar award from the Institute of Packaging Professionals.

 

Since the company makes such a variety of products, it stands to reason that each business unit would be responsible for its own packaging.

“One thing we’re really thrilled about is that packaging is in the R&D function,” says Ralph Jerome, vice president for snack food R&D. “That’s a key thing. We don’t have a central packaging function—we pretty much have our packaging distributed across our strategic business units, and this is a way to leverage technical skills to deliver outstanding packaging.”

But that structure doesn’t cut off the internal flow of information, Jerome emphasizes.

“A second thing that’s unique about us, and this goes for working cross-segment as well as within segments, is that we’re really well-networked,” he says. “Another thing about the R&D community at Mars is that we know each other globally. When there’s an issue or a problem, you pick up the phone, and you know the person on the other end—you don’t even have to have a video conference.”

That kind of synergy can extend across product categories. Perhaps the most striking example of that in the last few years was the development of the retort pouch.

“We pioneered the wet pouch in pet [food], and we really went big into that,” Jerome says. “And then were able to leverage that capability into the rice pouch. When you think about that, the category didn’t exist. The product was enabled by the package.”

That sort of synergy extends to Mars’ international operations. The company shares ideas across the more than 100 countries it serves, with overseas sales occasionally serving as a test market for America and vice versa. For instance, the Sheba Dome was a big success in Europe before it reached American shores.

Generally speaking, Mars strives for consistency around the world in its packaging—up to a point. Certainly the brand identity has to be protected through graphic elements. And, in the words of Kevin Rabinovitch, director of process and packaging development for Mars Pet Care U.S., “The laws of physics remain the same everywhere”—meaning that requirements for functional aspects like moisture barrier are unlikely to change. (However, they sometimes need to be tweaked to accommodate a given area’s climate or logistical capabilities, Rabinovitch says.)

On the other hand, the realities of individual international markets can impose different requirements on packaging, such as size.

“In Europe or the U.S., we typically sell a single M&M’s bag of 44 grams of product,” Jerome says. “That might not be desirable in Thailand. You’ll find single units will be smaller, depending on the market.”

 

Masterfoods USA strives for consistency in primary packaging, but secondary packaging is another matter. Like any consumer products company, Mars is under a lot of pressure from big customers to customize certain loads. And in candy, secondary packaging plays a big role in driving sales, because it often is converted into point-of-sale displays. Since candy is one of the more impulse-driven foods, good POS appeal is crucial.

“What we do with European businesses on display is very different from what we do in Japan, and that’s by request,” Payne says. “What you can do in Japan on the shelf is very different from what you can do here and what the expectations are from a trade perspective.”

For instance, European displays often consist of several dozen of the same product in clamshells in a pre-existing display. “That package form, and the real estate that takes up, isn’t really consistent with the customers that we work with in the U.S.,” Payne says. “They’re looking for more integrated displays. They’re looking for displays that give consumers more options, as opposed to a large display with just one chocolate in two or three different package forms.” In addition, Japan and many other countries have significantly less retail display space than America, meaning the POS has to be scaled down.

POS is so important at Masterfoods USA that it has its own group. “We have a specific group that works and focuses on display,” Payne says. “And display is not only in that group—it works across the groups. It translates into understanding the customer needs: How big is the end-aisle shelf? How deep is it? How much do we want on there?”

This approach has allowed the company to do some far-reaching work in customizing secondary packaging. One recent example is their “power wing” system designed for interior pillars at some retailers. The power wing is a structure attached with Velcro semi-permanently to the pillar; individual shipping case/displays are sized to fit it.

“So now you’ve taken real estate that before had nothing on it” and made it useful, Payne says. “And we’ve done that with some other displays. We’ve modified some displays so we can put them on the sides of racks, or in alternative outlets.”

In general, shipping/POS boxes follow one of several standard “chassis,” or frameworks. The chassis can last years, but the graphics can change as needed for seasonal or promotional messages.

The main mission at Masterfoods USA can be summed up this way: Support and intensify the advantages conferred by the company’s long-established, beloved brands.

“The positive is that the brands are tremendously popular, and they’re great brands,” Payne says. “And so when you’re working with the brands from a consumer standpoint, that really lets you engage the consumer. They’re very willing to share with you their feelings about the product. Same thing for the trade side. They want to work with you to allow new points of distribution and new methods of display. It makes partnering with people very easy, be it a consumer or a trade partner.”