Mars Wrigley commits 30% of its turnover to sales and marketing to catch up with rivals

Mars Wrigley, which began its operations in India in 2002, has established a significant presence in the country's confectionery market with a diverse portfolio. With flagship brands including Snickers, Galaxy, Mars, Bounty, Twix, and Boomer under its umbrella, the company has set ambitious growth targets for the Indian market.

Central to Mars Wrigley's growth strategy is its substantial allocation of resources to build both brand equity and distribution networks.

"We invest about 30% of our total turnover into sales and marketing, and it is because we are in a kind of formative phase. We are building our brand equity. We are building the reach of our brand. We are also, at the same time, building our route-to-market (RTM) reach," reveals Nikhil Rao, who is the chief marketing officer of Mars Wrigley India.

"For Mars Wrigley as a global company, I would not be mistaken if I said India is a number one seed market"

Nikhil Rao, Mars Wrigley

Even during challenging global financial periods, the company protects its India investment. "We're careful not to cut budgets in India, even when we do in other markets. We prioritise India, and we want to invest in India," Rao emphasises.

With the company's priorities established, the brand has its own way of marketing itself versus formidable competitors such as Mondelez (with its Cadbury brand), Nestle, and ITC. 

"For Mars Wrigley as a global company, I would not be mistaken if I said India is a number one seed market," Rao says. "It is the biggest priority for Mars Wrigley globally. And we're here to stay. We've already put our money where our mouth is. We've invested in the factories. We invested in our offices."

The confectionery giant's revenue for the financial year 2023-24 stood at Rs 2,329 crore, growing at a CAGR of 15% over the past five years, according to the RoC filing from the company.

Mars Wrigley currently operates three manufacturing facilities in India—a chocolate factory in Pune, a bubble gum factory in Baddi, and a chewing gum factory in Bangalore.

Local manufacturing of Snickers began in 2016, followed by Galaxy, with both products specially adapted for the Indian market with features like heat resistance and vegetarian formulations.

Marketing approach and media strategy

The company employs a differentiated marketing approach for each of its core brands based on their market positioning and target audiences.

For Galaxy, positioned as a premium offering, the objective is to first cater to the affluent consumers of the country. "It's one of the smoothest, best-eating, tasting chocolates that we have in the country, and we want to first build it at the top end of the country," explains Rao. 

"We're targeting, like, a few lakh consumers in the top 50,000 outlets. So the media is tailored accordingly. We're largely on OTT and connected television, supplemented by Meta and Google."

Snickers, with its broader distribution reaching about 300,000 outlets, employs a mass-market approach: "We are on mass media with that. We invest a lot in television, with big investments in Meta and Google, and we also do a lot of stuff in-store."

For Boomer, with its extensive reach across "18 lakh outlets", the strategy focuses on maximum penetration: "It's on TV. We're trying to get to more people. We try to be present in the wholesale mandis as well, alongside activations at the bottom of the pyramid."

When asked about advertising frequency compared to competitors, Rao responds, "As the saying goes, we're number two. So we have to work harder. I think at every step, our creatives work harder."

The brand announced two major ambassadors last year, with Rohit Shetty endorsing Snickers and Jasprit Bumrah becoming the face of Boomer. 

Distribution and channel strategy

Mars Wrigley's distribution strategy and revenue mix reflect its premium positioning in the market. Quick commerce contributes 10-15% of the company's total revenue, significantly higher than the industry average of 4-5%, as per Rao. 

Similarly, modern trade accounts for approximately 20% of its revenue, compared to the industry average of around 10%. The remaining 60-70% come from traditional trade channels.

"We're still building our route to market. I would say it's year four or year five of really building that," Rao explains. 

"We started with the metros, then the tier one towns. We are investing in things like chillers to keep our chocolate. We are also investing in our 'perfect store' initiative to ensure chocolates are visible in retail. We are building a distributor backbone in this country."

The company's distribution network currently reaches around "three lakh to four lakh outlets" for its chocolate brands, compared to "50 lakh outlets for the whole chocolate category," indicating significant headroom for growth.

The company has also focused on localising its products for Indian preferences, including developing eggless snickers, heat-resistant chocolate formulations, and introducing flavours like Kesar Pista, almond, and cashew butter.

Mars Wrigley employs a nuanced pricing strategy to complement its variegated product portfolio. "We segregate the offerings between those that are less than Rs 50 and those that above Rs 50," Rao explains. 

"Less than 50 rupees is typically the affordable or impulse price point. A person may be wealthy but might be in a rush and on the go."

For these impulse purchases, maintaining psychological price points is crucial. "We ensure certain price points remain unchanged. For instance, we have to keep Boomer at Re 1. Snickers has to be at Rs 10. We're very particular about rounded price points, like 1, 10, 20, all the way up to 50," Rao adds.

However, above the 50-rupee threshold, the strategy is a bit different. "Here, the shopper is very flexible. So she might be buying the product as part of a basket. Round price points do not matter as much here."

"Most of our sales come from above the Rs 50 price point. Therefore, we offer Snickers at Rs 50, Rs 75, and Rs 125. For Galaxy, most of our business comes from the above Rs 50 price point as well. We have gifting options through Galaxy Jewels, which is positioned at the gifting price point," Rao reveals.

Consumer trends shaping strategy

Several key consumer trends are influencing Mars Wrigley's approach to the Indian market.

The rise in snacking culture is a significant driver: "People are on the go, especially in India, as consumers are urbanising. More and more consumers are moving to urban centres and metros, living in nuclear families, are very ambitious about their careers, and earn more," Rao explains. 

"There's a lot of hustle, and it's not always convenient to have the time to sit down and have a proper breakfast, lunch, or dinner. So snacking is on the rise, and that plays really well for us." 

Health and well-being is another crucial trend: "COVID has possibly really accelerated that. People are very, very literate and aware about how their health works," says Rao.

The company addresses this concern through sugar-free offerings such as Orbit chewing gum and Galaxy Fusions with 70% cocoa content. Additionally, Mars Wrigley offers portion control options across its portfolio.

Premiumisation continues to drive growth, particularly in states where "per capita incomes have already crossed $2,500", enabling greater discretionary spending. "If you look at the South where we have our highest market share, per capita income is in excess of $3,000 in any of the Southern states. That is a pretty big trend that premium brands like ours will tap into," Rao notes.

Rural penetration is also increasing, with rural areas now contributing 30% of the chocolate market, as per Rao.

Expansion strategy and future outlook

Mars Wrigley's expansion strategy follows a deliberate pathway from urban to rural markets. "We have a strong base in the metro and tier one towns. We possibly reach up to 6,000 towns today," says Rao.

"We want to build a strength there and slowly take it to tier two, tier three and finally, rural. So that's not going to happen on the immediate horizon."

The company is also selectively exploring opportunities in the chocolate gifting segment, which constitutes approximately Rs 1,100 crores of the estimated Rs 20,000 crore chocolate market in India, as per Rao.

While mainstream gifting has slowed, Rao reveals, "The premium gifting, or the luxury gifting, as you might call it... which is about 25% of the market, has been growing at high double digits."

The company still considers itself a challenger in the Indian confectionery market, but eyes a larger market share with time. 

"We are still a challenger here. You can see through the market share and the momentum we have, and the investments we are making. We are here to stay and here to grow really big," Rao concludes.