Motley Fool Hidden Gems Investing - Chocolate Secrets from Inside Mars

Episode Date: October 27, 2020

Mars makes some of the most popular chocolate candies in the world. It’s dedication for secrecy rivals Willy Wonka. Joelle Glen Brenner, author of the book The Emperors of Chocolate: Inside the Secret World of Hershey and Mars, shares why secrecy is such a crucial ingredient in the industry. Learn more about your ad choices. Visit megaphone.fm/adchoices

Chris Hill. With The Motley Fool Money Extra, I'm Chris Hill. With Halloween coming up, let's talk about the business of candy, specifically Mars, the company behind M&Ms and some of the most popular chocolate bars in the world. Started by the Mars family in 1911, it's one of the biggest private companies in America, as well as one of the most secretive, one of the few people to get inside is Joelle Glenn Brenner. At the time, she was a reporter for the Washington Post, and when we talked in 2017, I asked her where the company's culture of secrecy comes from. Was it simply handed down from the original founders, or is it seen as a critical business advantage? The secrecy is a very interesting thing. First of all, I don't think

many of your listeners know that the story of Willy Wonka, the Raoul Dahl original story, was based on the stories that he read in England about the competition between Cadbury and Roundtree. And his parody of the candy business as being this incredibly secretive, strange, eccentric world was based in truth. And there is a history within this industry, and you'll understand it really quickly when I explain, the ingredients in the products, they're not a secret, right? I mean, everybody knows what's in an M&M, what's in a Milky Way, what's in a Mars bar.

If you can't patent or somehow protect intellectual property with your products, what can you do? How do you gain an edge? And so those are the things that all of the candy companies were incredibly secretive about. If, for example, Ferrera were to figure out how to put a crispy cookie inside a bonbon of chocolate, which they did with their candy Ferrera Rocher, which is now very popular in the United States, that little gold-foiled ball, then that's a trade secret. That becomes incredibly valuable, and I'll tell you, Forrest Mars Sr. would have given anything to understand how the Ferreira family had figured that out, because getting a crispy cookie into a piece of chocolate that has, right, fat, it has cocoa butter in it, it has some liquid in it, how do you keep that cookie crisp?

I mean, these are things people don't think about when they eat candy, but there's a lot of technology and a lot of science that goes into making the candies that we eat. And when I talk about technology, I'm not talking about the Internet. I'm not talking about coding, but I'm talking about things, for example, at Mars, their manufacturing systems are unbelievably fast. There isn't a company on this planet that can match the production levels. What Mars can get out of its factories in a 24-hour period beats the competition hands down. But that's a huge trade secret. So when Mars has to have somebody come in from the outside, which is a little rare, but when they do have to bring someone in from the outside to fix something on the line

or to fix a piece of equipment, they literally blindfold them. They don't want anybody outside of the company to see how they do what they do. All of those things become your trade secret. If you want to learn more, check out Joelle Glenn Brenner's book, The Emperors of Chocolate, Inside the Secret World of Hershey and Mars. I'm Chris Hill. Have a safe and happy Halloween. Thanks for listening. We'll see you next time. Thanks for watching.