Behemoth size has advantages and disadvantages. With $21 billion in annual sales and 100 facilities in 65 countries, Mars Inc. has vast resources to draw upon for product development, but it also faces the hurdles of being a huge and international company.
Despite its size, Mars is not really that diverse. Two categories – snack foods and pet foods – nearly evenly account for 91 percent of its sales (with food and drinks making up the remaining 9 percent). Snack foods essentially is synonymous with candy, and even that is overwhelmingly chocolate. So the company really is not so broad as it is deep … very deep in chocolate. Nevertheless, novel product developments have been helped along by expertise from other divisions, many of them in distant lands.
Mars takes a traditional cross-functional approach to product development, one in which people from R&D, plant ops, packaging, marketing and other departments all play key and formalized roles. One little difference from other companies may be the role supply chain plays in the process.
“We always have the product architect and engineers working together, with supply chain personnel serving as the bridge in between,” says Harald Emberger, vice president of supply chain at Mars Snackfood U.S., whose office is in the division’s Hackettstown, N.J., headquarters. Supply chain makes for a good “bridge” because it encompasses external as well as internal suppliers of ingredients, equipment, packaging and other components of a product launch, as well as the logistics involved in bringing them all together.
Ralph Jerome, vice president of research and development at Mars Snackfood U.S., likes to call it “distributed R&D.” “Globally, we have a networked R&D community. All the R&D heads from all the units around the world meet in person for a week every year. It’s always at a Mars location — Netherlands, Poland, Russia, Australia, the U.K.,” he says. “Plus, we have segment meetings two or three times a year, so we get a sense of what’s going on in the other segments. In Snackfood, we have a conference call monthly and we meet at least quarterly in person.
“We all have pretty good knowledge of what’s being developed in other geographic markets. We often send out samples, prototypes of products for others to comment on. Sometimes, process engineers will switch places for a while. We may want them to learn how a process is being developed in Australia. Or another unit with a problem to overcome may want one of our people with relevant experience.
“Several of our engineers were in Europe just last week [mid-December] for some technology exchange because our Russian unit had developed something that sounded very interesting and we wanted to see it first hand,” Jerome says.
Mars has a global Wiki, an online dialog that Mars employees can read or contribute to, announcing projects, problems, questions, comments. “People will ask for ideas and solutions. Often, someone will write, ‘Try this, it worked for us,’ ” says Jerome.
Mars Snackfood also maintains a vendors assurance group, a formal process of sending Mars people out to suppliers’ facilities, especially of raw materials, to inspect and qualify them. “We have sets of standards they must adhere to,” explains Jerome. The frequency depends upon the nature of the supplied material, but all vendors are certified at least yearly.
Focus on snackfoods
In the U.S. snackfoods unit, there are three R&D centers. Hackettstown is the epicenter: the corporate headquarters, the home of M&M’S and the place where flavanols were discovered. A two-hour drive west, Elizabethtown, Pa. is the center for chocolate and cocoa development, and it's the site where cacao beans are roasted. Cleveland, Tenn., focuses on baked products, where the cookie centers of Twix and the Combos salty snacks are developed; it also makes M&M’S.
“Within each business unit, people are charged with idea capture and generation,” says Jerome. Formal BMTs (business management teams) exist at least on the brand level, and sometimes there are more than one within larger brands, such as M&M’S.
Jerome says new product ideas come from three general sources:
- “The place of making things” — Plenty of ideas come from Mars Snackfood’s own knowledge base and facilities, primarily the manufacturing plants and the product development labs. Ideas are driven by what employees know about their own unit’s processes and products. Personalized My M&M’S is one example. But also contributing is pure research, which yielded the understanding of flavanols in cocoa and their role in heart health.
- “The place of acquisition” — Usually this means a retail store, be it a grocery or a convenience store, although with My M&M’S it brought Mars into direct selling via the Internet. Jerome says the company studies “consumer ethnographics” – why people like what they like and how they shop, what causes an impulse purchase.
“It’s like being an anthropologist,” says Jerome. “We even develop algorithms – psychographic and ethnographic – to understand the target.”
- “The place of consumption” — Do consumers eat the product on the run, in the car, at home or at work? Understanding the ultimate disposition of the product can greatly affect the up-front thinking on it.
At the very beginning, an Activity Management Project qualifies ideas with respect to both marketability and to resources. “This gets engineering and supply chain involved at the very beginning, so we can see everything that will be needed to produce a new idea,” says Jerome.
The pipeline of new ideas at Mars Snackfood is always full, he say. It’s a matter of picking out the best ideas to pursue. The AMP meets regularly, so people and their ideas vie for places on the agenda.
Then comes the Development Quality Plan. Representatives of all job functions formally get together to discuss the product under study. At this point packaging and quality also are brought into the process. If the process continues successfully, prototypes are produced in the pilot lab and the product may well be launched.
It’s all very cross-functional, and it seems to be working. Some of the same candy-shell and printing technology behind M&M’S begat fruit-flavored Skittles. Build in some manufacturing flexibility and add Internet information technology and you get My M&M’S. Put the same personalized messages on foil wrappers and you’re eating My Dove. What to do with all this flavanol research? Create a new line of health-food chocolates: CocoaVia. Then make it decadent via the Dove brand. Next, make it liquid, as in a new Dove beverage expected to debut in the coming weeks.
R&D, marketing, manufacturing and more job functions all share the credit for keeping the pipeline full.
Note to Plant Ops
One of the keys to Mars Inc.’s success over the years has been its belief in the competitive edge that superior manufacturing and technological know-how provide. Mars has cross-trained its managers for decades, bringing along employees with potential for management through a succession of promotions from R&D posts and shift management to plant management and high-level operations and engineering posts. The mix of product understanding, manufacturing experience and technical understanding pave the way to top management positions.
Manufacturing has a great deal of input on the product development process at Mars Snackfood U.S. One key element of manufacturing’s involvement is food quality and safety. “We have a (cross-functional) team in the organization that makes sure that any change in processing or recipes goes through a rigorous review process,” says Harald Emberger, vice president of supply chain.
The cross-functional grooming of Mars personnel makes them “good at understanding the product from both ends,” the supply chain head notes. Engineers understand the R&D perspective and, conversely, R&D personnel grasp the engineers’ concerns.