NCA State of the Industry Conference 2018
Mars Wrigley Confectionery CEO: ‘We’re learning from economies like China’
The M&M maker - which posted $18bn in revenue last year - pointed out the candy industry is currently facing retailer consolidation, changing consumer behavior and the rise of discounters and digital e-commerce.
“These headwinds will continue to drive disruptions,” said Radvan during the recent State of the Industry Conference hosted by the National Confectioners Association (NCA).
“We need to build new partnerships and action-oriented coalitions to find and to scale breakthrough solutions for sustainable growth.”
He said Mars Wrigley has partnered with leading Chinese tech companies like Alibaba and Tencent to grow its online presence “We think that benefits us on a global scale and [helps] us better engage with our consumers,” Radvan said.
E-commerce only accounts for 8% of the entire US confectionery’s sales but it is growing rapidly, according to IRI data.
“We’re learning from economies like China, and we recently opened a digital innovation center in Shanghai where the new trends are originating,” he added.
Investment in Egypt
China is not the only global market Mars Wrigley has been actively investing in.
The company is also going to invest approximately $40m over the next 18 months to expand its production in Egypt including new Galaxy line, as the country is expected to be its “export hub” for the Middle East, said Mars.
“This will almost double our investment in Egypt to $113m since we started our Mars Egypt business in 2001,” Mars’ spokesperson Kristen Kinkella said. “Our goal is to double our exports out of Egypt, reaching $100m annually by the end of 2018.”
Mars currently manufactures Twix, Flutes (a chocolate-coated wafer) and Galaxy (its biggest brand in Egypt).
Focus on low-calorie treats
Radvan said Mars would focus on reducing calorie counts for its core brands through innovation in 2018 and beyond.
Last year, the company joined Nestlé USA, Ferrero, Lindt and Ferrara (before acquired by Ferrero) to reduce half of their individually wrapped products to 200 calories or less by 2022, this site previously reported.
Some of Mars’ products have already achieved the target, including M&M’s Caramel, according to Radvan.
He expects the company’s calorie reduction efforts would further help its business grow this year. In 2017, Skittle, Dove, Extra, and M&M grew six, seven, eight and 11 times faster than the average US categories in sales respectively, Radvan said.
“Exceptional innovation of our core brands is what made Mars grow three times faster than the overall US confectionery category [in 2017],” he said.
“Candy is a treat, and consumers want to enjoy healthier options. We must help them do both.”