How Mars Inc. became a $50 billion private empire from candy and pet food

Executive overview

Mars Inc. is the second wealthiest family in America and one of the top five largest private companies in the world, yet almost nobody knows its story. The company was built across three generations of a deeply dysfunctional family, starting with a failed candy entrepreneur and culminating in one of the most strategically brilliant operators in American business history.

Forrest Mars Sr. understood scale economies, vertical integration, and modern management decades before his competitors — and used each of those advantages to build an empire that spans candy, pet food, rice, and veterinary services.

The founding: Frank Mars and the early candy business

• Frank Mars contracted polio as a child and learned candy-making from his mother; he started his first candy company at 19 in 1902
• Three consecutive candy companies failed between 1902 and 1920; a fourth, started in Minneapolis, became Mars Inc.
• Chocolate was barely a category in America until Hershey scaled production and distribution from 1900 onward
• Hershey priced chocolate at a nickel and pushed into every distribution channel, deliberately setting American taste for a century
• World War One introduced millions of soldiers to chocolate rations; Prohibition redirected adult spending from alcohol to candy
• By the late 1920s, more than 40,000 candy bars existed in America — almost all regional and handmade; Hershey supplied chocolate wholesale to all of them
• The Milky Way (1924) was Mars's first hit count line, generating $800K in its first year; Snickers followed in 1930, Three Musketeers in 1932
• During the Great Depression, Mars revenue grew to $25 million — candy was recession-proof from the start
• Frank wanted comfort; Forrest wanted to "conquer the whole goddamn world" — the rift ended when Frank refused to give Forrest a stake and Forrest walked out

Forrest Sr. in Europe: learning chocolate and building an empire

• Forrest left America in 1932 with $50,000 and the foreign rights to the Milky Way recipe — nothing else
• He moved to Switzerland and worked anonymously on the factory floor at Toblerone and Nestlé to learn how chocolate is made
• In 1933 he opened a factory in Slough, England, bought Cadbury's chocolate wholesale, and launched the Mars bar — adapted for British tastes
• Within five years, Mars UK became the third-largest confectionery company in Britain behind Cadbury and Rowntree
• In 1934 — barely a year into operations — he acquired a small British dog food company (Chappie), entering the pet food market before the category even existed; it became cash-generative almost immediately
• The five Mars principles were set in Slough: Quality, Responsibility, Mutuality, Efficiency, and Freedom
• Open floor plan, no private offices, no executive perks, time cards for everyone including Forrest — all started in the 1930s
• Pay was set at 3–4x market rate, with bonuses tied entirely to company performance and a 10% punctuality bonus for zero late arrivals
• Return on total assets (ROTA) at a target of 18% became the primary operating metric, derived from a 1930s British management textbook; assets were always valued at replacement cost, not book value

The M&M's origin and the US comeback

• Forrest spotted dragée candies — chocolate coated in a hard sugar shell — being eaten by soldiers in the Spanish Civil War; he also almost certainly saw Rowntree's Smarties launched in the UK in 1937
• Returning to the US in 1939, he famously walked into Hershey's headquarters unannounced, placed dragées on president William Murray's desk, and noted they had survived a full summer day in his pocket without melting
• The pitch: a joint venture — M&M Limited, 80% Forrest, 20% Murray's son Bruce — that would use Hershey's chocolate, capital, and military sales relationships
• M&M's launched as a military ration in 1941; the Air Force and Army were the first customers
• The Wrigley brand tube packaging used in early M&M's closely mirrored Smarties' format
• Forrest simultaneously launched Uncle Ben's parboiled rice (1942) as a military food supplier — the first branded rice in America, today over $1 billion in annual revenue
• After the war, consumer sales were slow; Forrest used humiliation tactics (posting daily "FAILED" sales reports in the men's bathroom) to push Bruce Murray out; bought his 20% for $1 million in 1949

The M&M's marketing breakthrough

• Ted Bates & Co. research in 1950 revealed M&M's appealed most to children — but parents were the actual buyers
• The resulting campaign — "Melts in your mouth, not in your hand" — targeted parental anxiety about chocolate mess, not children's desire for candy
• Sponsorship of The Mickey Mouse Club and Howdy Doody amplified the message directly to kids
• By 1956, M&M's were the best-selling candy in America, doing over $40 million annually
• The animated M&M characters debuted in 1954; computer-generated versions followed within a year of Jurassic Park's CGI in 1993
• Mars passed on the ET product placement deal in 1982 (required $1 million in co-marketing guarantees); Hershey's Reese's Pieces took it and tripled its sales — a rare Mars misstep
• The 1995 color vote (replacing tan with blue, lit up the Empire State Building) was a masterclass in zero-cost consumer engagement
• Hershey refused to advertise at all until 1970 — and when they finally started, pulled the plug two years later when profits dipped; Mars never stopped

Taking control of the family company

• Frank Mars died in 1933; the company passed to his second wife Ethel and was run by her half-brother
• Forrest inherited roughly a third of Mars Inc. after Ethel died in 1945; Patricia held another large stake
• He spent the 1950s lobbying from an inside office, writing critical memos to the board, accumulating trust
• When Patricia's husband became CEO in 1959, revenue fell from $50M to $40M by 1963 — a catastrophe in a high fixed-cost business
• In 1963, Forrest finally persuaded Patricia to sell on two conditions: don't fire her husband (James), and preserve the Mars Inc. name as the parent entity
• By mid-1964 he had full control; once Patricia died of cancer later that year, he fired James, tore out all office walls, demolished the executive dining room, sold the art collection and the helicopter, and issued everyone a time card
• His first call as CEO of the unified empire was to Hershey: he was phasing out their chocolate supply
• By 1973, combined Mars + M&M's passed Hershey to become the number one candy company in America; Forrest retired and handed the business equally to his three children — Forrest Jr., John, and Jackie — when it was doing ~$800 million in revenue

The price war that broke Hershey

• Hershey kept the nickel bar price from 1900 until 1969 — nearly 70 years — managing inflation by shrinking the bar from 1.25oz to 0.625oz
• When they finally raised the price to 10 cents in 1969 and restored the original size, consumers felt exposed and betrayed
• Forrest responded by increasing Mars bar sizes while holding price, triggering a sustained price and size war
• Mars also built a sophisticated commodities trading operation; rumored to have generated billions in profit from market swings in cocoa and other inputs that hurt competitors

Forrest's final act: Ethel M Chocolates

• At 76, Forrest came out of retirement and started Ethel M Chocolates in Henderson, Nevada — a high-end chocolate brand competing with See's, specializing in liquor-filled chocolates
• He built an apartment directly above the factory and ran the business from there
• Within a few years it was doing $150 million in revenue; Mars Inc. acquired it in 1988

The brothers' era: globalization and acquisitions

• Forrest Jr. and John Mars grew revenue from $800 million to $20 billion during their 28-year tenure — a 25x increase
• Key moves: global brand unification (Snickers is Snickers everywhere), 1984 Olympics sponsorship, expansion into Japan, China, Russia, Middle East, and South America
• 1974: Skittles, Twix, and Starburst (Opal Fruits) brought over from the UK
• 1986: Acquired Kal Kan Foods (US), entering the American pet food market; Dove ice cream bars acquired the same year, later expanded into Dove chocolate
• 2002: Acquired Royal Canin (prescription pet food) — a grand slam that anticipated the humanisation of pets
• 2005–2017: Acquired Banfield Pet Hospital (embedded in PetSmart), then VCA — the largest independent vet chain in America — for $9 billion; now owns ~3,000 of 35–40,000 US vet locations
• 2008: Acquired Wrigley for $23 billion with Warren Buffett providing $6.5 billion in financing (4.4B debt at 11.45%, 2.1B preferred equity); Berkshire ultimately earned ~$4+ billion total; Mars bought Buffett out by 2016
• 2020: Acquired Kind Bar for $5 billion after first taking a minority stake
• Pending: $35.9 billion acquisition of Kellanova (Kellogg's snacks and international cereals — Pringles, Pop-Tarts, Rice Krispies Treats, RX Bar); the largest CPG deal since Kraft-Heinz in 2015

What Mars looks like today

• Revenue exceeds $50 billion annually; the family's net worth is estimated at $117 billion
• Pet care is the dominant segment at 59% of revenue; Mars Snacking (all candy) is 18% of revenue
• Nearly 100,000 of 140,000 employees work in pet care
• Mars and Hershey each hold ~24% US candy market share; globally, Mars leads at 11% in a highly fragmented market
• Climate change is a significant threat: cacao trees grow only in narrow climate bands, take 25 years to reach peak production, and have been genetically modified for resilience at the cost of flavour complexity
• The company remains 100% privately owned by the Mars family; no external financial statements, no public equity, no investor relations
• The five principles — Quality, Responsibility, Mutuality, Efficiency, Freedom — still govern operations; open floor plan, no private offices, time cards for all

Playbook themes

• Scale economies are the core power: high-gross-margin products with large fixed cost bases that become more efficient as volume grows — the same dynamic as software or cloud
• Buy commodities, sell brands: cocoa beans in one side of the factory, Snickers out the other; pricing discipline and low-cost ingredients (nougat, peanuts) gave Mars a structural margin advantage over Hershey's pure-chocolate bars
• Control the means of production: making their own chocolate was resisted by every outside advisor but proved essential for quality, scale, and flexibility
• Impulse purchase dominance: 90% of candy is bought on impulse; Mars pioneered candy displays at cash registers in 1979, transforming supermarket layouts
• Recession-proof and universal: 98% of US households buy candy annually; average 35 purchases per year; same dynamic holds for pet food
• Conglomerate by design, not accident: Mars has always run multiple unrelated businesses and has developed the muscle to acquire, integrate selectively, and hold forever — 30+ acquisitions since the 1990s, only two divestitures since 2015
• Duration compounds: 14% compound annual revenue growth over a century, enabled by global applicability, recurring habitual purchase, operational efficiency, and sustained dominant market share