They say that hindsight is 2020. Since we are now in Q2 2021, we now have the benefit of hindsight when we look back at the year that will forever be associated with COVID. Some companies fell apart. Others flourished. Enough time has passed that we can start drawing initial conclusions about how the business world has changed since the onset of the COVID crisis. Today’s STAGE spotlight shines on Mars, a company that you might think you know, but you probably do not know much about where it gets its revenue.
Who are they?
Today’s STAGE Article will be a bit different than usual. That’s because I am sitting here, jealous of my American colleagues across the pond who have already received their vaccines and are sunbathing in the light at the end of the tunnel. Here in Europe, we are still in the dark, but to lighten my mood, I decided to write about a topic that will cheer me up: pets.
The pet care industry has been one of the primary beneficiaries of the COVID Crisis. In general, crises are not good for pets. Because of financial strain, families are sometimes forced to make the heartbreaking decision to give up the family pet to save money. The nature of the COVID Crisis has led to a much happier, heart-warming situation for family pets. People were stuck at home, which meant that they were “stuck” with their pets. This ended up being one of the most positive aspects of the crisis. Instead of the daily guilt trips associated with leaving your best friend at home, you now got to spend the entire day with your beloved pet. Everyone, including the pet care industry, is better off for it.
Mars is best known for its candy products such as M&M’s, Snickers, and Skittles, as well as its gum. Despite being known mostly for these products, this same company is a powerhouse in the pet care market. For decades, they were known within the pet industry for their pet food brands, such as Royal Canin, Pedigree, and Whiskas, but they also had a sizable veterinary service portfolio. In 2017, Mars acquired VCA, a network of over 800 animal hospitals and 60 diagnostic laboratories throughout the US and Canada. Despite not being the company’s claim to fame, the Mars pet care segment accounts for more than a half of its total sales, more than its candy and gum business combined.
How did covid impact the company?
STAGE articles are often effective because they delve deeper into publicly available data. That is why we focus on publicly traded companies that are required by stock exchanges to publish their financial performance. During the COVID Crisis, however, we have found that the relatively few privately held companies that have seen great success during the crisis are making major moves. Mars recently announced the significant expansion of one of their 14 American production facilities. Within that announcement came a juicy research nugget: more than 11 million American households welcomed a new pet into their homes during the pandemic. This significant uptick meant increased demand for the company’s products, thereby necessitating expansion.
Unlike most companies, Mars did not need to shift their strategy much during the pandemic; they simply had to make relatively simple adjustments on the supply side. For this reason, the Mars COVID story is remarkable because it is so ordinary. While other companies had to deal with massive shifts in the way they conduct business, Mars simply had to stay on its original path. The Mars of 2020 was exceptional by being so unexceptional.