The Mars empire — more than you think
You probably know Mars for chocolate bars. But Mars Inc. is one of the largest privately-owned companies on Earth. Confectionery is just one corner of what they own. The same holding company that makes Mars bars and Maltesers also controls a significant slice of the global pet care industry — food, veterinary practices, insurance and more. This is what makes MNCs so powerful: surplus cash gets deployed into adjacent and unrelated markets, building an empire that is almost impossible to dislodge.
Click each division to explore
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Confectionery
The original business. Global chocolate and candy brands.
Mars barSnickersMaltesersTwixM&MsSkittles
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Pet food
Budget to premium — a brand for every owner.
PedigreeWhiskasRoyal CaninShebaIams
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Veterinary care
Mars owns a huge chunk of the UK vet market.
BanfieldVCALinnaeusAniCura
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Food
Human food brands beyond confectionery.
Uncle Ben's / Ben's OriginalDolmioSeeds of Change
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Drinks
Entered the coffee sector through acquisition.
FlaviaAlterra CoffeeThe Bright Tea Co.
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Pet science
Research and technology for animal health and nutrition.
Wisdom Panel (DNA tests)AniCura clinics
Vertical vs horizontal integration
Vertical integration
Horizontal integration
Compare both
Vertical integration means owning different stages of the same supply chain — from raw materials all the way to the end customer. You control front-to-back.
Raw materials
Cocoa beans, milk, sugar, wheat
Mars: sourcing direct
Processing
Chocolate production, mixing, moulding
Mars: owns factories
Distribution
Logistics, warehousing, delivery
Mars: own logistics
Retail / end user
Supermarkets, vending, direct
Mostly third-party
Why it matters: controlling your own supply chain reduces costs, improves quality control, and makes you less vulnerable to supplier price increases or shortages.
Exam use: "Mars' vertical integration in cocoa sourcing gives it a cost advantage over smaller confectionery rivals who must pay market prices for the same raw materials."
Horizontal integration means expanding sideways — acquiring competitors or businesses at the same level of the supply chain in the same or related markets.
Step 1
Own one dog food brand (Pedigree)
Step 2
Acquire a premium brand (Royal Canin) — same market, higher price point
Step 3
Add cat food (Whiskas, Sheba) — adjacent market, similar production
Why it matters: horizontal integration grows market share rapidly, eliminates a competitor and enables shared purchasing, marketing, and production resources across a wider portfolio.
Exam use: "Mars' horizontal integration across budget and premium pet food brands means it captures spending from every type of pet owner — a strategy unavailable to a single-brand rival."
Vertical integration
Owning the supply chain top-to-bottom. Controls quality, reduces input costs, protects against supplier power.
Mars owns cocoa sourcing, processing, and factories. Each stage owned = lower cost, higher control.
Horizontal integration
Acquiring businesses at the same supply chain level, often competitors or related products. Grows market share fast.
Mars acquires Royal Canin (pet food), then Banfield (vets). Different products, same pet-owner customer.
Advantage of both
Cost efficiency through scale. Pricing power over suppliers. Ability to cross-sell to the same customer across multiple divisions.
A Mars customer buys Pedigree, takes the dog to a Linnaeus vet, pays with Mars-affiliated insurance. Mars earns at every point.
Risk of both
Complexity, diseconomies of scale, regulatory scrutiny (competition authorities), loss of focus, integration costs.
Owning 40% of UK vets attracted competition concerns. Managing pet food AND chocolate AND coffee is a coordination challenge.
Quick-fire questions
Exam practice
Analyse — 9 marks
Two fully developed chains · no bullets in your answer
Analyse two reasons why an MNC like Mars might choose to pursue horizontal integration by acquiring businesses in the pet care market.
Point 1 — revenue diversification
Horizontal integration into pet care gives Mars a second major revenue stream that is largely uncorrelated with confectionery demand. If chocolate sales fall during a cost-of-living squeeze — as consumers trade down or cut discretionary spending — pet food and veterinary revenue provides a buffer. Pet owners rarely cut spending on their animals even in recessions, making pet care a relatively recession-resistant market. This reduces Mars' overall business risk and smooths earnings for its shareholders.
Point 2 — shared resource economies
Pet food production shares significant similarities with confectionery at the industrial level: bulk purchasing of raw materials (proteins, starches, fats), large-scale manufacturing processes, logistics and cold-chain management. Mars can leverage its existing procurement relationships and manufacturing expertise across both divisions, achieving purchasing economies that a standalone pet food firm cannot. This reduces unit costs across the portfolio, improving profitability in both divisions simultaneously.
Evaluate — 20 marks
KAA (10) + Evaluation (10) · must conclude
"The growth of MNCs like Mars and Nestlé makes it impossible for smaller confectionery businesses to compete effectively." Evaluate this view with reference to the confectionery market.
KAA for — why MNCs dominate
MNCs enjoy purchasing economies, technical economies (expensive automated production lines), financial economies (cheap borrowing) and massive marketing budgets spread over billions of units. Mars' 50%+ market share in some confectionery segments gives it shelf dominance and retailer leverage that a small firm simply cannot match. These structural advantages compound over time.
Evaluation against — how smaller firms survive
Tony's Chocolonely competes not on price or volume but on ethics, story and premium positioning. Its fair trade, slave-free cacao sourcing creates a differentiated product that a significant and growing consumer segment actively seeks out — and pays £4.50 for versus £1.20 for a Dairy Milk. Mars cannot easily replicate this without undermining its entire cost model. Niche, values-led brands have carved out defensible positions that scale alone cannot crush.
Evaluation — "impossible" is too strong
The word "impossible" is the key to evaluate here. In mass-market, price-competitive confectionery — plain milk chocolate, mainstream sweets — it is extremely difficult for a small firm to compete. But in premium, ethical, artisan or culturally specific niches, smaller firms not only survive but thrive. Hotel Chocolat, Tony's, and numerous regional confectionery brands demonstrate this. The confectionery market is large enough and varied enough to support both MNC giants and specialist challengers.
Conclusion
MNCs make mass-market competition extremely difficult for small firms — this is true. But "impossible" overstates the case. The most successful small confectionery businesses have chosen not to compete with Mars on its own terms (price, volume, shelf space) but to occupy positions where Mars' scale is actually a disadvantage — premium ethics, authenticity, artisan quality. The strategic lesson is about choosing where to compete, not whether it is possible.