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Quiet, sweet company

You may think that a chocolate company with one of the world’s most famous brands would have a flashy headquarters with a visitors’ centre and a neon sign. Not Mars. A notoriously secretive Virginia-based firm, it is run out of an anonymous brown building near the CIA’s headquarters.

Nicknamed “the Kremlin” for its opaque ways, the snacks manufacturer is wholly owned by a reclusive dynasty of billionaires who spend a good deal of time on a remote ranch in Wyoming.

This week’s $22b takeover of the chewing-gum maker Wrigley put Mars dead centre on Wall Street’s radar screen — giving the firm the kind of visibility it had studiously avoided for 98 years.

“They’re based in a dark, hidden building,” says Jan Pottker, author of a tell-all book about the Mars family, Crisis in Candyland. “It’s simply incredible — rather than being proud of their company, they don’t want to be noticed.”

With 129 factories and 223 offices in 66 countries, Mars employs 48,000 staff and commands annual sales of $22bn. As well as confectionery such as its eponymous bar, Twix, Snickers and Starburst, its lines include Uncle Ben’s rice, Dolmio pasta sauces, Masterfoods ready meals and Whiskas catfood. Its move for Wrigley came out of the blue — astonishingly audacious for such a relentlessly low-profile business.

“Mars is a very, very quiet company,” says Mitchell Howard, a food analyst at the stockbroker Morningstar in Chicago.

He believes the deal’s logic is largely driven by marketing muscle and by distribution power — the combined company will command shelf space at more corner-shop retailers, particularly in emerging markets.

“This gives them a huge distribution footprint all over the world,” says Mr. Howard. “Wrigley has a lot of distribution in Asia and eastern Europe. The retail trade is a lot less consolidated in those markets, so distribution really matters.”

The deal, agreed in only three weeks, was negotiated with Wrigley’s bosses over sandwiches around the kitchen table of Mars’s president, Paul Michaels. Mars tapped the world’s richest man, Warren Buffett, for $6.5b and secured a further $5.7b from Goldman Sachs.

Food industry experts see it as a sign that Mars is finally opening up — possibly due to the influence of Michaels, a former Johnson & Johnson executive who is part of a first generation of non-family members to be responsible for the day-to-day business. — © Guardian Newspapers Limited, 2008

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