Gary Kroot, plant director of Mars Snackfood's Elizabethtown, Pa. plant, proudly stands behind a high-speed, high-volume moulding line producing Dove chocolates.
Amidst all the talk about the growth of premium and dark chocolates both globally and within North America, there’s one household name that’s often been given short shrift: Dove.
Yet, Mars Snackfood, which is primarily known for its iconic mainstream brands, such as M&M’s and Snickers, has quietly established itself as a leader in the premium and dark chocolate category in North America with the brand whose heritage stems from ice cream.
Thanks to the unprecedented growth of Dove during the past three years – a 44.3% jump during 2005/2006; 36.2% in 2006/2007 and 28.2% for the first 12 weeks of 2008 – Mars not only has the fastest growing brand within the chocolate category; it also has the leading brand in the hotly contested premium segment.
“The little engine that could [Dove] has evolved into the strong engine that will,” says Thomas Pinnau, vice president, indulgence.
And no, that’s not a typo, he is the vice president of indulgence. That title demonstrates how seriously Mars Snackfood views the premium/indulgent sector within the overall chocolate category.
Pinnau, who spent 14 years with Procter & Gamble in the global health and beauty field, and who just recently joined Mars Snackfood a year ago, also views the premium/indulgent segment seriously.
“It’s a key growth engine for the company,” he explains. “My job is to beautify this part of the business.”
With the launch of Dove Beautiful earlier this year, a milk chocolate product that delivers rich indulgent taste with skin-nourishing additives such as vitamins C and E, biotin and zinc “to help hydrate from within to support beautiful looking skin,” one could take Pinnau’s statement quite literally.
There’s certainly little doubt that Pinnau does. As he explains, “There’s a focus at Mars Snackfood to drive the premium segment.”
Anyone attending the All Candy Expo last year discovered how focused Mars Snackfood can be, its Dove tent showcasing scores of new product launches at the booth.
A quick review from 2007 affirms the activity level regarding Dove and its newly launched legion of premium products: Boxed Chocolates, Chocolate with Almonds Promises, Extra Dark, Flavored Caramels and Origins.
“In 2008, we’re going to take Dove to the next level,” Pinnau asserts.
Members of Mars Snackfood's plant leadership team in Elizabethtown, Pa.: (Standing) Steve Silver, Jodi Cook, Richard Morgan, Sherry Day, Gary Kroot and Dave Spangenberg. (Seated:) Maria Calderon and Cecilia Gonzales.
That next level will address four key growth areas with the premium/ indulgent chocolate sector.
First, there’s continued interest in dark chocolate. Within the United States, dark chocolate grew 27% last year, boosting its share of total chocolate consumption to 11.2% according to the latest statistics from Chicago-based Information Resources Inc.
“Although it started with the premium segment, the preference for dark chocolate has latched onto mainstream channels,” he adds.
Another key driver with the segment is the tablet/large bar sub-segment, Pinnau continues.
“It’s an emerging category in the United States and still continuing to grow in Europe,” he says. ”Consumers are also looking for innovation in chocolate as it relates to more exotic flavor choices. There’s more acceptance on the part of the consumer to experiment with new and different, even edgy choices.”
Finally, there’s what Pinnau calls “permissible indulgence,” one that combines sweet satisfaction with health and well-being.
“I like to call it indulgence-plus,” he says. “Consumers are open to receiving enhanced benefits that go beyond the indulgence experience, benefits that deliver well-being and nutritional value.”
As mentioned earlier, Mars Snackfood has already addressed this trend, having introduced in early 2008 not only Dove Beautiful, but Dove Vitalize, a dark chocolate bar that contains healthful ingredients like energy-releasing B vitamins, plus the natural goodness of cocoa.
“We are going to continue to explore this trend,” he says. “The key is finding the right balance between functional and indulgence. We’re seeing that it’s critical to accent indulgence first, then functional.”
Mars Snackfood is also tapping into the large tablet bar trend this summer by introducing an innovative new packaging format for its premium tablet bar collection. The tablet bar features three individually wrapped pieces in an elegant, recloseable pack-addressing consumers’ desire for portion control, portability, share-ability and freshness without the mess. Naturally, the package design accents premium indulgence with a distinctive curve, which is also replicated in the mould design.
Six new, luscious flavors will join the Dove premium tablet collection, including Blueberry Almond, Cranberry Almond, Dark Chocolate with Roasted Almond, Extra Creamy Milk Chocolate, Peanut Toffee Crunch and Roasted Hazelnut.
Of course, the company will also continue to expand its successful Dove Promises line – the new Desserts series delivers indulgence with two equally tempting flavors: Milk Chocolate Bananas Foster and Dark Chocolate Tiramisu.
Recognizing consumers’ penchant for variety, Mars Snackfood will also offer a Dove Promises Collection, that features dark chocolate, dark chocolate with almonds and dark chocolate caramels in a stand-up pouch.
All this activity and growth has certainly placed additional pressure on Mars Snackfood and its ability to produce premium chocolates. Determined to retain its U.S.-based production capabilities not only to meet growing demand, but to fulfill enhanced consumer expectations for quality and innovation, the company has committed itself to a major investment program.
In doing so, it has allocated more than $70 million to expand its cocoa bean processing area as well as build a new Center for Chocolate Excellence in Elizabethtown, Pa.
Prior to the expansion, the 300,000-sq.-ft. plant housed two moulding lines that handled a variety of Dove items as well as a bar line that produced 3 Musketeers, Milky Way and Milky Way Midnight products.
Just recently, the company christened its new four-story cocoa processing building and looks to open its 60,000-sq.-ft. Center for Chocolate Excellence in October.
Although reluctant to give specifics on its new cocoa processing center, the new facility has increased its capacity by one-third, thus allowing it to meet projected requirements for all of Mars Snackfood’s chocolate operations in the United States, says Gary Kroot, plant director at Elizabethtown.
As the only remaining large-scale “bean-to-bar” chocolate manufacturer, the company prides itself on its cocoa bean expertise and experience.
Given its long-standing commitment to cocoa research as well as holistic approach to cocoa bean farming and community involvement in cocoa-growing areas, Mars Snackfood believes strongly in continuing its role as a leader in cocoa bean processing.
Cocoapro, the company’s patented system that encompasses specific techniques to enhance flavanol release with chocolate processing, plays a key role within the company’s innovation pipeline.
“The Cocoapro process involves the way we select beans, the way they are fermented, the way they are shipped and finally, how we handle them here,” explains Harald Emberger, vice president – supply chain for Mars Snackfood North America.
Noting simply that the company will employ a variety of processing methods, dependent upon the type of chocolate needed, Emberger sees the investment as an example of continuous improvement within the supply chain.
“It allows us to use certain IPs [Intellectual Properties] to extract certain benefits from the bean in a more efficient way.”
The same applies to the new Center for Chocolate Excellence building currently under construction. The initial plan calls for two new moulding lines to be installed and operational in the facility by October. Again, the emphasis will be on not only delivering volume efficiency, but enhanced flexibility.
“We wanted more customization abilities at the end of the line, so we’ve factored in a mixture of runners [high-volume capabilities] with day-to-day units for flexibility,” says Emberger.
And customized refers to having the ability to accommodate capabilities from a product perspective as well as a customer perspective. [My Dove Promises feature personalized messages inside the foil].
“We have plenty of space in the new facility, which allows us to plug in and play with equipment,” he adds. “We will be able to change packaging and moulding equipment on the fly. As a result, we have a state-of-the-art layout, featuring a best-in-class modular setup. This way we didn’t have to shoe-horn a moulding line into the facility. This provides us product flexibility as well as efficiency.”
Noting that Mars Snackfood has more than 25 moulding lines operating globally, Emberger said the company was able to evaluate using a “best practices” approach what would best address the needs for the new Center.
From an engineering perspective, the company doesn’t have a single global unit focusing on confectionery production. Rather, it has three regional engineering centers – North America, Europe and Asia – that zero in on areas of expertise.
“In Europe, the center’s expertise is robotics; in Asia it’s coding technology and in North America, it’s moulding line technology,” he says.
Emberger believes that the new Center for Chocolate Excellence will demonstrate “significant steps forward” in depositing and wrapping technology. But it’s the layout of the production lines where there’s been the most design work, he stresses.
“It’s very ergonomic and efficient, very flexible; essentially machines on wheels.”
The time and detail that’s gone into the Elizabethtown expansion reaffirms the company’s commitment to grow the category, Emberger adds.
“We want to grow this category by re-investing significantly in marketing as well as in the assets,” he stresses. “By reinvesting, we are coping with growth. In the end, the operating plants we have in North America are our flagship operations.”
It’s also a conscious call by the company to invest within the United States and not go offshore, Emberger adds.
“Elizabethtown will be the home of chocolate,” he says. “By drawing on our lean manufacturing practices and the capable skills of our candymakers, we can freshen the marketplace with new products and still remain competitive in costs.”
Emberger, however, is quick to point out that “lean” manufacturing at Mars Snackfood isn’t just a euphemism for cost cutting. Citing the practices developed and used by the automotive industry, Mars Snackfood takes “a structured approach” to lean manufacturing.
“In the end, it’s taking the pyramid and turning it upside down,” he says. “It’s all about leveraging our 4,500 associates [employees] and making them more responsible to make our business better. As a result, we employ a holistic North American approach to establish a continuous improvement mindset within the Mars operating system.”
The success of a lean manufacturing philosophy hinges on those involved in production, of course. In the end, it’s the operators that –after participating in something such as a Kaizen event – must apply that energy and transform it into a sustainable and significant improvement.
Kroot explains how a Kaizen event, which involves participation by operating crews on a specific area, works.
“We have our subject matter expert, which really are the operators, review an operation. We, of course, focus on the numbers a bit, what’s working, what’s not. In the end, we seek to capture their knowledge in a structural way.”
He brings up as an example a Kaizen event involving the improvement of startups on a moulding line.
“By having the wrapping operators participate in the event, they were able to point out that we could start the line differently, which had an impact on how products made it down to the wrapping machines, which helped us reduce the startup time by 50% as well as reduce waste.”
The key, as Emberger emphasizes, is sustainable improvement. Most importantly, the sustainable improvement philosophy extends beyond the plant floor.
“Our vision for the growth of the indulgence business is to be regarded as the premier chocolatier, to be universally regarded that way,” Pinnau says. “That vision encapsulates our goal to become a thought leader in the category.
A good example of such leadership can be seen in Mars Snackfood’s ability to extend the premium cachet into mainstream products, such as M&M’s.
The company has had tremendous success with its My M&M’s program, an online business segment (mymms.com) that allows consumers to personalize short messages/names onto M&M’s.
The fabulously successful program, which has been supported by an incredibly sophisticated infrastructure – from custom ordering to in-line imprinting – has delivered a new price point for M&Ms, one that extends the brand’s region into the everyday premium sector.
This summer, the company takes the imprint technology one step further by announcing its ability to imprint faces on M&M’s, a move that should generate even more excitement and growth in the My M&Ms segment.
The notion of imparting premiumization onto a mainstream brand takes on even greater significance with one more M&M twist this summer with the brand’s new line of Premiums.
The new M&Ms will shimmer in five new flavors – triple chocolate, chocolate almond, mint chocolate, mocha and raspberry almond – and come coated in iridescent, jewel-like colors. The 6-oz. bag will come packaged in recloseable, curved standup pouches and retail for $3.99.
It’s this kind of innovation that has Pinnau excited about the company’s involvement in the premium sector.
“It’s a tremendous opportunity for Mars Snackfood US,” he asserts.
“As the No. 1 global chocolate producer, we have the fastest growing brand. We have the science on hand. We have the ethical values in our approach to bean-to-bar production. And we know what we’re doing with the product since we know exactly what goes into it.
As it is, we now have in the United States a fantastic foundation for growth.”
