Latest / Family Business Stories with Fexingo: Succession, Legacy, and Multi-Generational Companies / How the Mars Family Built a Candy Empire Without Going Public
Transcript
- Lucas: So we talk a lot on this show about families that built huge companies and then went public — the Cargills, the Wallenbergs, the Hermes family all eventually had some public market exposure. But there's one name that's arguably bigger than most of them that has never, not once, held an IPO. Luna: Mars. The candy company. But they're so much more than candy now. Lucas: Right. Mars is a $45 billion revenue business that touches pet food — Pedigree, Whiskas — chewing gum with Wrigley, and of course M&M's, Snickers, Milky Way. Yet the Mars family, three generations in, still owns 100 percent of it. And they've never even hinted at going public. Luna: That's remarkable especially when you think about how many family empires eventually crack. The Ferrero family famously stayed private too, but they're a fraction of Mars's size. How did the Mars family do it? Lucas: Let's start with the founder: Frank Mars. He was born in 1883 in Minnesota, contracted polio as a child, spent most of his early life housebound. But he had a knack for candy making. In 1911, he started making buttercream candies in his kitchen, and by 1920 he'd launched the Milky Way bar. Luna: That bar alone changed everything. It was the first mass-market chocolate bar with a nougat center, and it cost a nickel. Lucas: Exactly. By 1923, Mars was doing a million dollars in sales — huge for the time. But Frank's son, Forrest Mars Sr., was the real empire builder. He and Frank had a famously difficult relationship. Frank didn't trust Forrest, so Forrest went to Europe, started his own candy business there, and only came back after Frank died. Luna: That's when he launched M&M's in 1941, right? During World War Two. Lucas: Yeah. Forrest Mars Sr. partnered with Bruce Murrie, the son of Hershey's president, to get access to chocolate rationing. The idea was a candy that wouldn't melt in soldiers' pockets. That's where the name comes from — Mars and Murrie. M&M's. Luna: So the product itself was born out of a practical military problem. That's a great origin story. Lucas: Forrest Sr. was ruthless about quality. There's a famous story: he'd walk into factories and if he found a loose M&M — one where the 'm' wasn't perfectly stamped — he'd shut down the line. He insisted on absolute consistency. And that culture of discipline became part of the family DNA. Luna: But the real question is how they kept it all private. Most families eventually sell out or go public to raise capital or resolve succession disputes. Lucas: Right. And the Mars family came close to breaking. When Forrest Sr. stepped back in the 1970s, he split the company between his three children: Forrest Jr., John, and Jacqueline. But the kids didn't get along. They actually stopped speaking to each other for years. Luna: That sounds like a recipe for disaster. How did they avoid a full-blown family feud that would force a sale? Lucas: They created something called the 'Five Principles' — a written set of values: quality, responsibility, mutuality, efficiency, and freedom. Every family member and every employee has to sign off on them. It's like a corporate constitution. And they set up a family council and a family office to manage ownership without letting personal conflicts spill into business decisions. Luna: So it's governance as a conflict prevention mechanism. I've heard that even today, no one outside the family knows exactly who owns what. Lucas: That's right. Mars is structured as a series of trusts and holding companies. The financial statements are not public. We know they did $45 billion in revenue last year, but that's an estimate from analysts. The family has never confirmed it. Luna: And yet they made the biggest acquisition in confectionery history in 2008 — buying Wrigley for $23 billion. How do you do a deal that size without public markets? Lucas: They used debt. They borrowed $11 billion from Berkshire Hathaway and another $12 billion from banks. Warren Buffett essentially acted as their private equity partner. That deal doubled Mars's size in gum and mint instantly. Luna: So they leveraged their private balance sheet. That's a huge bet, but it paid off. Wrigley now accounts for a big chunk of Mars's revenue. Lucas: The third generation — the grandchildren of Forrest Sr. — now runs the company. They've diversified into pet care, veterinary clinics, and even a sustainability initiative called 'Sustainable in a Generation.' The Mars family still holds all the voting shares, and they've made clear they intend to keep it private. Luna: But isn't there pressure to eventually sell? I mean, the family is huge — there are dozens of descendants. Do they all get dividends? Lucas: They do. The company pays out dividends to shareholders, and those shareholders are family members. But the trusts have strict rules: you can't sell your shares to outsiders. If you want to cash out, you sell back to the family at a price determined by an independent valuation. That keeps ownership concentrated. Luna: So they've essentially created a private market among themselves. That's smart, but it only works if the family stays united. And we've seen other families — like the Saclers — implode when they lost that unity. Lucas: The Mars family learned from near-breakups earlier. The Five Principles are enforced seriously. There's even a family member whose job is to mediate disputes. And they have a rule that no family member can work in the company unless they've worked outside for at least five years. That ensures they bring outside experience. Luna: That's a really practical policy. It avoids the entitled-kid problem that plagues so many family businesses. Lucas: And it explains why the company has been able to modernize — they've built a massive digital business, invested in supply chain tech, even launched a venture capital arm. They're not just sitting on a candy fortune. Luna: So what's the takeaway for someone running a family business today? Is the Mars model replicable? Lucas: I think the core lesson is that privacy is a strategic choice, not just a lifestyle preference. By staying private, Mars avoided quarterly earnings pressure, could make long-term bets like the Wrigley acquisition, and kept their financial data out of competitors' hands. But it requires ironclad family governance and a willingness to forgo the liquidity that an IPO provides. Luna: And a tolerance for a lot of secrecy. I mean, we still don't even know how many family members there are. Lucas: The estimates are around 50 to 70 direct descendants, but no one knows for sure. And that's exactly how they want it. Luna: It's interesting — in an era where we're obsessed with transparency, the Mars family proves that opacity can be a competitive advantage. If these conversations have moved your work forward in some small way, a couple of dollars a month is genuinely what keeps these going — buy me a coffee dot com slash fexingo, if you've gotten something out of them. Lucas: Yeah, it's a small gesture that makes a real difference. And it keeps us ad-free, focused on stories like this one. Luna: So back to Mars — one final question: do you think they'll ever go public? I mean, what happens when the fourth generation comes in? Lucas: I doubt it. The family has been consistent for over a century. The fourth generation is already being trained in the same principles. And as long as the dividends keep flowing and the governance holds, there's no reason to sell. Mars will probably stay private for another hundred years. Luna: That's the kind of long-term thinking most companies can only dream of. Thanks, Lucas. Lucas: Thanks, Luna. Next time we'll look at a family that did go public — and regretted it.