November 28, 2023
Mars is paying US$665 million (€534 million) to buy Royston, England-based Hotel Chocolat, as the U.S.-based Snickers and M&M’s manufacturer expands its presence in the U.K. and increases its exposure to premium confections. Mars has operated in the U.K. since 1932, reports Food Dive.
Andrew Clarke, global president of Mars Snacking, said his firm has “long admired” Hotel Chocolat, which is known for its lower sugar and higher cocoa content. Clarke called Hotel Chocolat a “differentiated brand.”
While Mars is bes- known for its mainstream confections, the acquisition of Hotel Chocolat will give the New Jersey-based company a premium brand that it can expand in the U.K. and “potentially, in new geographies.” Mars said the purchase will add to its portfolio a brand with “distinctive capabilities in product development, luxury gifting, and immersive brand experiences.”
Even though premium offerings have been hit hard by inflation, having another brand that plays in this category could benefit Mars by complementing the lower-priced sweets synonymous with the more than century-old company.
At the same time, Mars acquires a chocolatier that has attributes that are increasingly popular with consumers, including the use of natural ingredients, a commitment to use every part of the cocoa bean, and guaranteeing its growers receive a living income in exchange for meeting sustainable and ethical labor targets.
In buying Hotel Chocolat, Mars will bring to the mix its larger global footprint, supply chain connections and relationship with retailers that immediately provide a platform to grow the nearly 20-year-old brand. Mars also will benefit from Hotel Chocolat’s physical stores and digital commerce platform.
Hotel Chocolat’s international expansion plans have run into problems before; so having Mars as its parent will be valuable, should it decide to grow into additional markets. CNBC noted that Hotel Chocolat shuttered its direct-to-consumer website sales in the United States in September 2022, months after closing its high-street stores in the country.
“We know our brand resonates with consumers overseas, but operational supply chain challenges have held us back,” Hotel Chocolat said. “By partnering with Mars, we can grow our international presence much more quickly using their skills, expertise and capabilities.”
Research contact: @FoodDive