Mars Candy looks to grow its ice cream business through factory investment

Candy giant Mars is trying to make a name for itself in a new category: ice cream.

The family-owned company aims for its ice cream business to reach $1 billion in sales worldwide by 2030. In May, Mars tapped CEO Anton Vincent to lead its global ice cream business, adding to his role as president of Mars Wrigley North America.

Mars faces stiff competition to achieve its ambitions in the US, but the company has been investing in the business. The Burr Ridge, Illinois, ice cream factory cost $50 million and allocated an additional $20 million to an unused facility.

Mars is expanding its portfolio by releasing new flavors such as M&M’s Cookies and Cream Ice Cream Cookie Sandwiches and Twix Cookie Dough Ice Cream. She used the $5 billion acquisition of Kind North America, known for its nut bars, to replace plant-based ice cream.

While summer is still the biggest season for ice cream sales, Mars is trying to boost business in the fall and winter through a partnership between the National Football League and Snicker’s Ice Cream Bar.

Mars aims to grow its share of the ice cream market as part of a broader business. In addition to candy and ice cream, Mars also owns a large pet care division and other food products, including Combos crunchy snacks and Ben’s Original Rice.

The bet on ice cream paid off for the company. In the past five years, Mars’ global ice cream sales have increased by 42 percent. The Dove Ice Cream brand alone grew 12 percent last year. As the room grows, The US accounts for more than half of the company’s ice cream business.

As Mars pours resources into the ice cream business, the company will ensure that its well-known brands are sufficient to reach its ambitious sales target of $1 billion.

Mars entered the ice cream category in 2010. Three years later, Mars introduced the Snickers Ice Cream Bar, now the top seller in its portfolio, followed by the M&M’s Ice Cream Cookie Sandwich.

“We don’t have the biggest ice cream brands, but we believe we have the biggest brands in ice cream,” Shaf Lalani, head of Mars Ice Cream USA, told CNBC.

Today, Mars is among the top 10 U.S. ice cream makers in terms of retail sales, according to Euromonitor International data. But General Mills, the owner of Haagen-Dazs, is far superior; Ben & Jerry’s parent Unilever; and privately owned Blue Bell Cream.

“Mars Inc.’s ice cream brands face intense competition as they are far from the dominant position in the US ice cream market,” said Carl Quasch, head of food and nutrition research at Euromonitor.

In trying to make up that ground, Mars’ main strategy to boost ice cream sales will focus on reversing what it did with Dove.

“There is a 64% shift in value to people who buy our sweet products and engage with our brands, which gives us a lot of confidence that we have the right to win,” Lalani said.

Outside of Snickers and M&M’s, Mars’ other candy brands show promise as they move into ice cream. Twix Ice Cream is the fastest growing product in the company’s ice cream portfolio. Lalani thinks the frozen Milky Way candy bar — known outside the U.S. as the Mars Bar — has the potential to be his next big hit.

While Lalani Mars’ existing portfolio has many runways, not all of Mars Ice Cream’s growth will be organic. Findings help fuel sales and bring in new customers.

For example, Kind’s Frozen Foods moved into Whole Foods a few months ago, adding a new retail chain to the Mars Frozen footprint.

In December, Mars announced the acquisition of TruFru, a startup that makes frozen and dried chocolate-covered fruit. Financial terms of the deal were not disclosed.

When Mars bought Dove four decades ago, it bought the brand’s manufacturing facility in Burr Ridge, Illinois. The factory is currently responsible for producing all of the ice cream sold in the US, accounting for 55 percent of worldwide demand.

As sales accelerated, the company had to invest in an expanding facility to increase capacity and develop new products, such as Kind’s frozen meals with nuts. The factory has separate lines for the types of products Mars makes, including sandwiches, bars and sticks.

Mars’ manufacturing process is mostly automated, and workers stand by to monitor the machines. Many of the ingredients come from elsewhere — ice cream mix and M&M cookies from regional suppliers, peanuts from Mars Roasting Institute — and it’s all put together at the Burr Ridge factory.

But it’s a delicate process that requires precision to balance the consistency, quality, and temperature needs of the ice cream.

For example, Snickers ice cream bars have ice cream, candy’s signature peanut and caramel, and a chocolate exterior. In the cold factory, the chocolate must stay warm enough to melt on the ice cream bar, which the ice cream doesn’t melt as the conveyor belt passes through a rapidly cooling tunnel.

The Snickers Ice Cream Bars then pass sensors that detect production errors, such as being too big or too small. Snickers peanuts are usually to blame.

The machine quickly pushes the rejects aside, where they slowly melt in with the other outcasts. The floor of the production line is dusted with chocolate ash, which is the lowest level of Mars. In order for the ice cubes not to melt, the conveyor belt must move quickly, which does not give time to correct the mistakes.

But to wrap in Snickers’ packaging that makes the cut down. Mechanical arms use a small vacuum to lift the sneaker bars without crushing them and place them into wrappers, which are then placed in individual boxes and placed in cartons.

New products bring new manufacturing challenges. For example, Kind’s frozen bars are meant to taste the same with every bite, but the nut flakes have presented challenges in meeting that level of consistency, said Romain Lepicard, head of Mars Ice Cream’s research and development team.

The $50 million was to upgrade Mars’ already dedicated ice cream bar line, which can churn out several hundred thousand Snickers ice cream bars a day. Investments have also been made in other technology upgrades such as digital screens that will help the facility become paperless.

Mars will invest an additional $20 million in how much ice cream the factory can make. The company plans to invest in equipment for Snickers Ice Cream Bars such as caramel and other equipment to improve the capacity of the production line.