Mars Drives $50 Billion Empire by Weaponizing Vending and Vet Units

Acquired

The reclusive Mars family outmaneuvered Hershey to build America's second-largest fortune by treating candy as a low-COGS impulse asset and aggressively diversifying into high-margin veterinary care.

AI-assisted summary of Mars Inc. - The Chocolate Story (Audio) — original source. Check the original for full context.

Source published: 2024-12-16

Detailed notes

## Background Published on YouTube by the channel Acquired on December 16, 2024, this audio episode chronicles the incredible, little-known entrepreneurial history of Mars, Incorporated. The page description highlights Mars as a 100% privately owned, deeply secretive empire controlled by the Mars family—the second wealthiest family in the United States—whose massive portfolio surprisingly spans both iconic candy brands and an extensive pet care division.

## TL;DR The episode explores the multi-generational history of Mars, Inc., tracing its evolution from Frank Mars's early candy-making hardships and the breakthrough launch of the Milky Way bar to the hyper-competitive, empire-minded expansion led by his son, Forrest Mars Sr. It breaks down the corporate philosophies that forged the company's culture, including an obsession with quality, radical operational efficiency, and a strict adherence to private ownership and extreme secrecy. Furthermore, the narrative details Mars's historic market battles with Hershey, its sophisticated commodities trading, and its modern strategic pivot into global brand acquisitions, high-margin gum via Wrigley, and a massive veterinary hospital rollup.

## Atmosphere & style The episode carries a compelling blend of serious family drama and light-hearted, conversational fair, driven by the deeply collaborative dynamic between hosts Ben Gilbert and David Rosenthal. It feels like an analytical yet highly evocative deep dive, contrasting the reclusive, intense, and sometimes cutthroat nature of the Mars dynasty with nostalgic reflections on childhood candy brands. Listeners are taken on an engrossing narrative journey that balances heavy food science, industrial scaling engineering, and corporate warfare with authentic moments of awe and witty commentary.

## Key takeaways - [01:45](https://www.youtube.com/watch?v=GyWJeY55x-8&t=105s) Mars, Incorporated is entirely privately held by the Mars family, ranking as one of the top five largest private companies in the United States and generating over $50 billion in annual revenue. - [08:18](https://www.youtube.com/watch?v=GyWJeY55x-8&t=498s) Frank Mars established his fourth candy company in Minneapolis in 1920, which ultimately became Mars Incorporated, after his previous three candy ventures failed or went bankrupt. - [19:39](https://www.youtube.com/watch?v=GyWJeY55x-8&t=1179s) The massive expansion of the solid milk chocolate consumer market post-1879 was historically unlocked by Rudolph Lindt's discovery of the conching process and Henri Nestlé's invention of milk powder. - [42:08](https://www.youtube.com/watch?v=GyWJeY55x-8&t=2528s) Milky Way, launched in 1924, pioneered the concept of putting a malted milkshake flavor into a candy bar and achieved rapid financial scale by implementing early factory automation to produce uniform 'count lines.' - [58:23](https://www.youtube.com/watch?v=GyWJeY55x-8&t=3503s) Forrest Mars built the industrial operations of Mars by utilizing assembly line engineering from the Austin Company, allowing the Chicago facility to run lines 24/7 and rapidly scale up production during the Great Depression. - [01:08:23](https://www.youtube.com/watch?v=GyWJeY55x-8&t=4103s) Following a major fallout with his father Frank in 1932, Forrest Mars left for Europe, mastered industrial food science incognito at Nestlé and Toblerone, and successfully launched the Mars Bar in Slough, England. - [01:31:23](https://www.youtube.com/watch?v=GyWJeY55x-8&t=5483s) Forrest Mars pioneered a radical corporate culture defined by 'The Five Principles,' paying high performance-driven bonuses while enforcing transparency through physical time cards and the world's first open-plan office layout. - [01:43:53](https://www.youtube.com/watch?v=GyWJeY55x-8&t=6233s) Mars instituted a strict operational efficiency target of 18% Return on Total Assets (ROTA) for every division, forcing internal investments to pay for themselves in less than five years. - [01:57:24](https://www.youtube.com/watch?v=GyWJeY55x-8&t=7044s) Forrest Mars formed a joint venture with Hershey president's son Bruce Murray to launch M&M Limited in 1941, securing a key pipeline to supply non-melting dragée chocolates to the U.S. Military during World War II. - [02:31:16](https://www.youtube.com/watch?v=GyWJeY55x-8&t=9076s) Following a historic 1979 internal market research study showing 70% of candy sales were unplanned impulse buys, Mars successfully lobbied major supermarkets to establish dedicated candy displays directly next to checkout registers. - [04:29:54](https://www.youtube.com/watch?v=GyWJeY55x-8&t=16194s) Mars overtook Hershey as the number one candy company in America in 1973 by aggressively expanding product sizes and launching national advertising blitzes to capitalize on Hershey's rigid 70-year price freeze and shrinkflation blunders. - [04:37:31](https://www.youtube.com/watch?v=GyWJeY55x-8&t=16651s) Mars partnered with Warren Buffett and Berkshire Hathaway to orchestrate a massive $23 billion acquisition of the high-margin Wrigley gum business in October 2008, which Mars subsequently bought out fully. - [04:42:32](https://www.youtube.com/watch?v=GyWJeY55x-8&t=16952s) Mars transitioned its business heavily into veterinary health, acquiring Banfield Pet Hospital, VCA for $9 billion, and Royal Canin to construct a high-margin distribution network for prescription pet care. - [04:46:00](https://www.youtube.com/watch?v=GyWJeY55x-8&t=17160s) Mars announced a blockbuster $35.9 billion definitive agreement to acquire Kellanova, the largest consumer packaged goods transaction since 2015, in order to scale its infrastructure to compete globally against Nestle. - [04:52:25](https://www.youtube.com/watch?v=GyWJeY55x-8&t=17545s) The modern Mars portfolio is predominantly driven by its Pet Care division, which accounts for 59% of total company revenues and employs approximately 100,000 of its 140,000 global workers. - [04:55:07](https://www.youtube.com/watch?v=GyWJeY55x-8&t=17707s) Mars and Hershey maintain a strict duopoly in the United States confectionery market, with each company controlling an identical 24% market share. - [05:03:01](https://www.youtube.com/watch?v=GyWJeY55x-8&t=18181s) In 1982, Mars famously passed on a $1 million co-marketing opportunity to feature M&M's in Steven Spielberg's E.T. the Extra-Terrestrial, allowing Hershey to secure the spot for Reese's Pieces and instantly triple its sales. - [05:12:11](https://www.youtube.com/watch?v=GyWJeY55x-8&t=18731s) The candy and pet care industries exhibit strong macroeconomic resilience, with Mars maintaining constant revenues through the 2008 financial crisis due to recurring consumer buying habits.

## Detailed walkthrough ### [00:00](https://www.youtube.com/watch?v=GyWJeY55x-8&t=0s) M&M's and the Mars Portfolio

The episode kicks off with host Ben Gilbert quizzing his co-host David Rosenthal on how many varieties of M&M's he can name off the top of his head. David begins listing the basics—plain, peanut, and peanut butter—prompting Ben to chip in with a quick bit of trivia: "plain" is technically now called "milk chocolate." They cover dark chocolate and discuss the seasonal nature of mint M&M's, which are exclusively a holiday offering. David jokes that, at the end of the day, only plain and peanut actually matter from a sales perspective. Ben agrees but continues to list out the increasingly eclectic lineup: pretzel, almond (which David always forgets about due to an allergy), and crunchy cookie—the latter having replaced the beloved "crispy M&M's" packaged in the distinct blue bags from their youth.

The conversation pivots to specialty flavors like dark chocolate peanut, fudge brownie, campfire s'mores, and caramel cold brew. Ben then introduces the "really wild limited edition ones," listing off birthday cake, chili nut, and pumpkin spice latte. While David notes that pumpkin spice latte sounds "disgusting," they both agree that milk chocolate and peanut remain the core sales drivers. With the introductory banter wrapped up, the show's theme music plays, transitioning into the Fall 2024 season finale of *Acquired*.

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[01:45](https://www.youtube.com/watch?v=GyWJeY55x-8&t=105s) The Unlikely Scale of Mars Incorporated

Ben and David welcome listeners to the season finale, explaining that they originally selected M&M's thinking it would be "nice light-hearted fair" about childhood candies and nostalgic commercials. However, as they dug into the parent company, Mars Incorporated, they discovered a thrilling, high-stakes story packed with World War I, World War II, groundbreaking inventions, and "serious serious family drama." Ben notes that Mars's corporate strategy is as clever as heavyweights like lvmh, Walmart, and Costco. Their execution has earned them a staggering distinction: they are the second wealthiest family in America. David draws immediate parallels to their recent episode on Ikea, though he notes that the Mars family is "way more quiet and reclusive than anybody."

The hosts highlight the shocking breadth of the Mars portfolio. Beyond owning M&M's and Snickers—the world's most popular candy—Mars operates a massive pet food business, owns Ben's Original rice, controls Kind bars, and has a major pending deal on the horizon. Ben drops a mind-blowing statistic to illustrate their sheer scale: Mars now generates more revenue than the Coca-Cola Company. Last year alone, Mars crossed $50 billion in sales. Because it remains entirely privately owned by the Mars family, it stands as one of the top five largest private companies in the United States.

- **Annual Sales:** Mars crossed $50 billion in sales last year. - **US Wealth Ranking:** The Mars family is the second wealthiest family in America. - **Ownership Structure:** Completely privately owned, ranking in the top five largest private companies in America. - **Brand Portfolio:** Includes M&M's, Snickers, Ben's Original, Kind bars, and an extensive pet food division.

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[03:37](https://www.youtube.com/watch?v=GyWJeY55x-8&t=217s) Administrative Updates and Sponsor Thanks

Before diving deep into the history, Ben directs listeners to check out their companion feed, *ACQ2*. He highlights a recent interview with Rene Haas, the CEO of ARM Holdings. Ben describes it as one of his favorite conversations in the show's history, detailing ARM's role in designing the architecture and instruction sets for chips inside smartphones, cars, laptops, and data centers. David jokes that between their previous episode on Synopsis and this one with ARM, they might need to rename ACQ2 to "Acquired Semiconductors." Ben pitches it as an excellent blend of computer science and history.

The hosts also announce the winner of their listener survey: Ctie from Boston, who wins a free pair of Ray-Ban Metas. Ten additional runners-up will receive free *Acquired* "dad hats," with notifications arriving via email. Finally, Ben and David express their gratitude to their presenting sponsor, JP Morgan Payments, for an incredible year. They emphasize that just as "every company has a story, every company's story is powered by payments." They close out the housekeeping by reminding listeners that the podcast is purely for informational and entertainment purposes, not investment advice.

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[05:04](https://www.youtube.com/watch?v=GyWJeY55x-8&t=304s) Frank C. Mars and the Hardships of Candy Making

The historical narrative begins in September 1883, with the birth of Frank Clarence Mars in Minnesota. David pauses to acknowledge Joel Glenn Brenner, author of *The Emperors of Chocolate*. Because Mars is famously protective of its privacy, Brenner remains the only journalist to ever secure real, deep access to the company. She accomplished this in 1991 as a young reporter for *The Washington Post* by calling the company every single day for a year, eventually turning her magazine piece into a definitive book.

Returning to Frank's childhood, David explains that his father operated a flour Grist mill and his mother, Elva, was a housewife. As a young boy, Frank contracted a mild case of polio. While he survived, he was left with weak legs and had to wear orthopedic braces throughout his youth. Unable to play outside or participate in sports, Frank stayed home after school with his mother. To utilize the extra bags of flour his father brought home, Elva and Frank spent hours baking bread, pies, cakes, and candy.

At this point in American history, "candy" did not mean chocolate, which was virtually nonexistent in the US. Instead, candy meant "Penny Candy"—sugar-based sweets like gumdrops and licorice. These treats were entirely unbranded and sold wholesale by small regional bakers to local drugstores and merchants, who targeted children. David compares the candy industry of the early 1900s to the modern baked goods market: consumers bought treats from local shops without ever knowing the specific independent baker behind them.

- **Source Material:** *The Emperors of Chocolate* (1999) by Joel Glenn Brenner, based on unprecedented 1991 access. - **Frank Mars's Birth:** September 1883 in Minnesota. - **Childhood Adversity:** Contracted polio, requiring orthopedic leg braces and keeping him confined indoors.

---

[08:18](https://www.youtube.com/watch?v=GyWJeY55x-8&t=498s) Three Strikes and a Reset

By the time he was in high school, Frank Mars had become a local "candy chef extraordinaire," mastering his mother's recipes and inventing his own. In 1902, at age 19, he leaned into his entrepreneurial spirit and launched his own wholesale candy business in Minneapolis. That same year, he married a woman named Ethel Kissack. The couple had a son named Forrest Mars—whom Ben points out is the "real protagonist" of the Mars empire. However, Frank's business faced massive structural headwinds. Penny candy was highly perishable, and in an era before commercial air conditioning, inventory spoilage ruined many producers.

By 1910, Frank's first business had collapsed into bankruptcy. His marriage fell apart, and Ethel divorced him. Unable to collect the $20 a month in child support that Frank legally owed, Ethel could not afford to raise six-year-old Forrest alone. She sent the boy to live with her parents in a remote mining town in Saskatchewan, Canada, while she took a job as a department store clerk in Minneapolis to reset her life. David and Ben reflect on how brutal and commonplace these financial resets were in the early 1900s.

Undeterred by bankruptcy or his status as a "deadbeat parent," Frank remarried a woman also named Ethel. The new couple moved to Seattle, where Frank started his second candy venture. Within a single year, this business failed as well. Fleeing creditors, Frank skipped town and moved down the road to Tacoma, Washington. In 1914, he launched his third candy business, operating directly out of his home kitchen. A few years later, this business failed too. By 1920, sitting on three consecutive failures, Frank and Ethel number two crawled back to Minneapolis, hoping that enough time had passed for them to show their faces again. He established his fourth candy company, which against all odds, would become the modern $50 billion Mars Incorporated.

- **First Marriage:** Married Ethel Kissack in 1902; fathered Forrest Mars. - **Childhood Support Debt:** Frank owed $20 per month in child support, which he failed to pay. - **The Seattle & Tacoma Failures:** Candy company #2 (Seattle, failed within a year); candy company #3 (Tacoma, launched 1914 out of his kitchen, failed). - **The Fourth Attempt:** Launched in Minneapolis in 1920 after a 10-year absence.

---

[13:32](https://www.youtube.com/watch?v=GyWJeY55x-8&t=812s) The Rise of Chocolate and Milton Hershey

The secret to Frank’s fourth company was a pivot to chocolate. David explains that chocolate was an entirely different universe compared to penny candies and caramels. It required processing cocoa beans, which at the time were a scarce, difficult-to-import commodity that very few Americans knew how to handle. In the early 1900s, chocolate production was dominated by Europeans, with one massive American exception: Milton Hershey.

To understand the Mars trajectory, the hosts dive into the legendary history of Hershey. Milton Hershey had been a highly successful caramel entrepreneur who sold his regional Philadelphia caramel business in 1900 for a staggering $1 million—equivalent to roughly $36 million or $37 million today. Before selling, Hershey had traveled to the 1893 Colombian Exposition in Chicago (the precursor to the World's Fair). In the German Pavilion, he tasted chocolate for the first time and was instantly "smitten." He was so taken by its rich complexity that he bought the German company's entire display of chocolate-making equipment on the spot, ordering it shipped straight to his facility in Lancaster, Pennsylvania.

Ben and David clarify that this was not milk chocolate yet; it was plain, solid dark chocolate. Solid chocolate bars were a novel concept, as nearly all chocolate up to that point had been consumed as a beverage. David remarks that chocolate has a deep 5,000-year history tracing all the way back to Moctezuma, the Aztecs, and origins in Ecuador roughly 5,300 years ago. Until the late 1800s, it remained a coarse, barely enjoyable drinking activity. It wasn't until Hershey traveled to Europe that he observed the Swiss company Nestlé processing milk chocolate, prompting him to try to unlock the secret to mass-producing it back home in America.

- **Milton Hershey's Capital:** Sold his caramel company in 1900 for $1,000,000. - **The Epiphany:** Discovered solid chocolate at the 1893 Colombian Exposition in Chicago. - **Historical Context:** Prior to the late 19th century, chocolate was consumed almost exclusively as a drink for over 5,000 years.

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[17:28](https://www.youtube.com/watch?v=GyWJeY55x-8&t=1048s) How Chocolate is Made

To explain the complex evolution of milk chocolate, Ben and David pause to outline the fundamentals of chocolate production. They give a shout-out to Todd Masonis at Dandelion Chocolate, a bean-to-bar chocolate company in San Francisco, who gave them a personal tour of their factory to explain the science.

Ben explains that chocolate begins as a cocoa fruit pod, which looks somewhat like a football and grows on trees originally native to South America (and now heavily cultivated in Africa). When you cut open the pod, the seeds are covered in a sweet, pulpy white fruit. Ben and David recall tasting this pulp during their factory tour, noting that while it is delicious and sweet, it tastes nothing like chocolate. The distinct chocolate flavor that the world loves is locked entirely inside the seeds, or beans, which require extensive fermentation and roasting to be unlocked.

[18:18](https://www.youtube.com/watch?v=GyWJeY55x-8&t=1098s) From Bean to Nib: The Complex Science of Chocolate Production

The speakers kick off by dispelling a common misconception about chocolate's origin: while humans spent thousands of years eating the cocoa fruit, it is actually the internal seed that becomes the chocolate we know today. The manufacturing journey begins directly at the site of growth—typically in South America or Africa—where the beans undergo a precise multi-stage fermentation process in wooden boxes. First, yeast consumes the natural sugars to create alcohol, and subsequently, specialized acids consume that alcohol. This intense chemical reaction generates enough heat to successfully kill the bean.

Once fermentation wraps up, the beans must be dried using methods that heavily dictate the final flavor profile, ranging from open-air drying beds and banana leaves to aggressive mechanical smoke dryers. The speakers emphasize that the speed and intensity of this drying stage directly control the remaining acid levels inside the beans. After drying, the crop is packed into sacks and loaded onto boats. Historically, these shipments were sent almost exclusively to Europe, which held a strict monopoly on chocolate manufacturing at the time. Upon arrival, the beans are sorted, sterilized, and roasted before undergoing "winnowing"—the mechanical process of stripping away the outer shell to reveal the rich, internal "meat" known as the nib.

- **Key Processing Steps:** Fermentation (yeast to alcohol, acid to alcohol) -> Drying -> Shipping -> Sorting & Sterilization -> Roasting -> Winnowing. - **The Core Derivative:** The process isolates the "nib", which is the foundational building block for all chocolate products. - **Flavour Variables:** The aggressiveness of the drying stage alters the bean's final acidity and flavor fluctuation.

[19:39](https://www.youtube.com/watch?v=GyWJeY55x-8&t=1179s) Accidental Smoothness: Rudolph Lindt and the Invention of Conching

The conversation shifts to how chocolate transitions from a coarse texture into a luxurious, melting solid. By pressing the newly isolated nibs, chocolate makers extract two distinct components: cocoa powder and cocoa butter. While processors frequently separate these elements, chocolatiers often recombine them later in highly calculated, customized ratios. To achieve a smooth texture, the nibs are ground down to a micro-particle size and put through a process called "conching"—which uses massive, spinning cylinders to continuously smooth out the particulate matter.

The hosts share a famous historical anecdote from 1879 starring Swiss chocolatier Rudolph Lindt. Lindt accidentally discovered the virtues of extended conching when he left his cocoa mixture running in a roller grinder over an entire weekend instead of shutting the machinery down. After three full days of continuous mechanical pressing, he returned to find a uniquely silky, flowing texture. This breakthrough allowed Swiss chocolatiers to fold massive amounts of extra cocoa butter back into the mixture, creating the ultra-creamy Swiss style celebrated worldwide today.

- **Nosedive into Nibs:** Grinding and pressing nibs yields two core components: cocoa powder and cocoa butter. - **The 1879 Breakthrough:** Rudolph Lindt discovered conching entirely by accident via a weekend manufacturing oversight. - **The Swiss Secret:** Heavy conching paired with re-introducing high ratios of cocoa butter gives Swiss chocolate its signature creaminess.

[20:55](https://www.youtube.com/watch?v=GyWJeY55x-8&t=1255s) Crystal Alignment: The Dark Art of Tempering

Even after chocolate is smoothly conched, it remains highly unstable. The speakers explain that if liquid chocolate is simply left to air-dry naturally, it will fail to be shelf-stable and will inevitably "bloom." They relate this to the familiar, unappealing experience of leaving a chocolate bar inside a hot car; when it melts and resolidified, it develops a "white gross stuff on top," loses its glossy shine, and no longer snaps cleanly when broken. Preventing this requires highly complex chemistry known as tempering.

Tempering is the deliberate process of aligning the microscopic crystals within the cocoa butter. The hosts walk through the delicate thermal steps: the liquid chocolate is first superheated to a high temperature to entirely eliminate all existing crystal structures, allowing the makers to "start from scratch." Next, the liquid is cooled down precisely to the exact temperature where desired "seed crystals" begin to form. Finally, it is gently heated a second time to allow the remaining chocolate structure to cleanly lock in place around those perfect seed crystals.

- **The Danger of Blooming:** Untempered chocolate suffers from fat/sugar bloom, resulting in a white surface film, a dull appearance, and a lack of a clean break. - **The Tempering Cycle:** Superheating (destroys bad crystals) -> Precision Cooling (forms perfect seed crystals) -> Re-heating (bonds the remaining structure). - **Complexity Debate:** The hosts argue that due to these multi-continent agricultural and chemical stages, chocolate production is "more complex than wine" and "more complex than coffee."

[23:22](https://www.youtube.com/watch?v=GyWJeY55x-8&t=1402s) Bitterness, Additives, and the Retrofitted History of "Dark" Chocolate

The dialogue pivots to the modern formulation of dark chocolate, noting that the term "dark chocolate" is actually a funny historical misnomer. Originally, dark chocolate was simply "chocolate"—a pure mixture of cacao and sugar. The industry had to retroactively invent the modifier "dark" only after milk chocolate came along and completely dominated consumer expectations.

The speakers outline the math behind modern chocolate bars, asserting that pure 100% dark chocolate is incredibly complex but far too bitter for the average consumer. As a result, most consumer palates max out at 85% cacao (where the remaining 15% of the bar is pure sugar) or gravitate toward standard 70% bars (containing 30% sugar). In mass-market production—excluding high-end "bean-to-bar" craft operations like Dandelion Chocolate—manufacturers routinely introduce an array of additives during the final stages to standardize flavor.

- **Standard Chocolate Formulations:** * 85% Bar: 85% Cocoa / 15% Sugar * 70% Bar: 70% Cocoa / 30% Sugar * Milk Chocolate: Roughly 30% to 50% Cocoa, with the remainder composed of milk and sugar. - **Common Industrial Additives:** Extra cocoa butter, processed sugar, soy lecithin (as an emulsifier), and vanilla to simulate a familiar, uniform taste profile.

[24:20](https://www.youtube.com/watch?v=GyWJeY55x-8&t=1460s) Baby Formula and the Secret Origins of Henri Nestlé

The narrative takes a sharp turn back to 1866 Switzerland—long before Milton Hershey built his empire—to reveal a "mind-blowing" historical connection: the modern chocolate industry was directly enabled by early innovations in infant baby formula. German-Swiss pharmacist Henri Nestlé was intensely researching alternative infant feeding methods in an effort to combat the era's horrific infant mortality rates, where roughly "one in five babies died before their first birthday."

The core scientific hurdle Nestlé faced was that fresh milk quickly turned rancid. Condensing milk without burning it proved incredibly difficult, but Nestlé successfully engineered a proprietary method utilizing an air pump at low temperatures to safely evaporate the water, leaving behind a stable milk powder. By blending this powder with a specialized cereal mix, he invented the first viable commercial baby formula in 1867. The hosts share an amazing coincidence: one of Nestlé’s literal neighbors in Switzerland happened to be a struggling chocolatier named Daniel Peter, whose baby was currently rejecting breast milk and desperately relied on Nestlé's miracle formula to survive.

- **Historical Era:** 1866–1867 in Switzerland. - **The Infant Mortality Crisis:** Approximately 20% of infants during this era passed away before reaching age one. - **The Air-Pump Invention:** Nestlé utilized low-temperature air pumps to concentrate milk into powder without scorching the sugars. - **The Luxury Analogy:** The speakers joke about unexpected product origins, comparing Nestlé's pivot from baby food to chocolate to how the high-fashion Hermès Birkin bag originally began its life as a utilitarian sack designed for holding baby bottles.

[26:08](https://www.youtube.com/watch?v=GyWJeY55x-8&t=1568s) Daniel Peter's Long Quest for Solid Milk Chocolate

Witnessing the stability of Nestlé's condensed dairy innovations gave Daniel Peter a revolutionary idea in 1867: he would combine milk with cocoa and sugar to create a shelf-stable product. Up until this point, consumers were already manually splashing fresh milk into their warm chocolate drinks, but no one had successfully created a pre-packaged, shelf-stable milk chocolate product. Peter ran into immediate, grueling engineering roadblocks; fluid milk contains massive amounts of water, which aggressively rejected the natural oils of the cocoa bean, resulting in a grainy, separated mess that went rancid almost instantly.

The speakers clarify a common piece of historical misinformation: Daniel Peter actually walked away from Nestlé's dry powdered milk entirely. Instead, he found success by utilizing condensed milk—which functions more like a thick, concentrated sugar syrup. Peter's winning breakthrough involved spreading the condensed milk and chocolate sludge onto massive industrial trays, exposing them to low, gradual heat, and drying the mixture into stable milk chocolate flakes. These flakes could easily be distributed to turn into drinks, or shipped to European pioneers like Cadbury to be pressed into the very first solid milk chocolate bars.

- **The Chemical Conflict:** Water inherently rejects cocoa bean oils; introducing unevaporated moisture ruins the tempering and causes immediate spoilage. - **The True Ingredient:** The breakthrough relied on *condensed milk syrup*, not fully dehydrated milk powder. - **The Source Text:** The host attributes this granular historical data to *Chocolate Wars*, a book authored by Deborah Cadbury, a direct descendant of the legendary Cadbury chocolate family.

[28:24](https://www.youtube.com/watch?v=GyWJeY55x-8&t=1704s) The 10x Market Explosion and Milton Hershey's Trial-and-Error Gambling

The fusion of Daniel Peter's dairy processing and Rudolph Lindt's conching completely revolutionized the global candy landscape. Prior to 1879, chocolate bars were notoriously gritty, brittle, and difficult to chew. The sudden introduction of solid milk chocolate paired with a silky mouthfeel fundamentally transformed chocolate from a niche luxury into a massive mass-market phenomenon, expanding the consumer market "10x" almost overnight.

This brings the story back to Milton Hershey, who was observing these massive European advancements from across the Atlantic while establishing his new operations in Pennsylvania. Hershey was intensely determined to bring mass-scale milk chocolate to the United States. However, unlike his highly academic European counterparts, Hershey was not a trained chemist, nor did he hire any. He had absolutely no idea how to replicate the secret European formulas. Operating entirely on raw intuition, Hershey spent years engaging in blind, expensive trial-and-error experimentation, even going so far as to construct a massive, costly manufacturing plant in the future town of Hershey, Pennsylvania, before he had even finalized a working recipe. He was quite literally "betting it all" on a high-stakes gamble.

- **The Great Market Shift:** Post-1879, chocolate evolved from an unappealingly gritty substance into a smooth commodity, expanding the global market by an estimated tenfold. - **Hershey's Methodology:** Entirely non-scientific, un-credentialed trial and error. - **The Go-Big Strategy:** Hershey aggressively built a massive scale production facility before his team even possessed a functional, working milk chocolate formula.

[30:00](https://www.youtube.com/watch?v=GyWJeY55x-8&t=1800s) The "Spoiled" Secret Behind the Classic American Flavor Profile

After years of exhaustive structural failures, Hershey's team finally stumbled upon a repeatable method for manufacturing mass-market milk chocolate. However, because their process lacked the rigorous, clinical precision of European laboratories, the milk used in the recipe ended up slightly spoiling during production. The speakers joyfully break down how this technical flaw directly created the iconic, tangibly sour "funk" that defines Hershey's chocolate to this day. While non-American consumers frequently complain that Hershey’s taste is "disgusting" or "sour," generations of Americans grew up on it, permanently mapping that exact flavor profile in their brains as the definitive taste of chocolate.

The hosts detail two competing historical theories surrounding how this unique flavor profile came to be. The first account attributes the breakthrough to an internal Hershey scientist named Schabach, who successfully evaporated non-fat milk over very low heat to eliminate the water content without scorching it; the resulting bar was smooth but retained a distinct, original sourness that Hershey loved. The second, more scandalous theory—often propagated by European rivals—claims Hershey simply purchased a massive, cheap batch of European milk powder that had soured during its long Atlantic transit. Reluctant to waste his capital, Hershey pushed it into production anyway and found that the public adored the taste. Though Hershey corporate officials have vehemently denied the soured-powder rumor for a century, the consequence remains the same: it locked in a deeply nostalgic taste association.

- **The Nostalgia Factor:** 75% of candy today is consumed by adults, and adults account for 90% of total candy purchases, driven heavily by childhood flavor associations. - **Account 1 (The Schabach Method):** Precision low-heat evaporation of non-fat milk that naturally retained a distinct, original tang. - **Account 2 (The Transatlantic Spoilage Rumor):** A cost-saving measure utilizing a bulk shipment of imported European milk powder that turned sour on a cargo ship.

[33:36](https://www.youtube.com/watch?v=GyWJeY55x-8&t=2016s) The Five-Cent Empire: Ubiquity and the Invention of Modern Candy Distribution

Milton Hershey's massive capital investments ultimately paid off, granting him a total monopoly over the only high-volume, scaled chocolate production facility on the American continent. He leveraged this infrastructure to pull off a brilliant, highly aggressive business strategy. Despite producing a luxurious product that could easily command a premium price tag, Hershey intentionally locked the price of his signature chocolate bar at a single nickel (five cents).

Hershey's core objective was absolute ubiquity. He aggressively pushed his five-cent bars into every conceivable retail crevice across the United States, single-handedly inventing modern candy distribution networks. His bars flooded five-and-dime storefronts, grocery outlets, gas stations, newsstands, and even Standard Oil service stations. Because Hershey possessed the unique personal wealth—roughly $40 million from the lucrative sale of his previous caramel enterprise—he was able to completely out-fund and out-manufacture any domestic competitors who tried to reverse-engineer the European styles. He successfully established both the definitive flavor profile and the dominant brand of American chocolate, right before World War I arrived to permanently cement his success.

- **The Iconic Price Point:** The original Hershey bar was deliberately priced at a "nickel" ($0.05) to ensure it was affordable for every citizen. - **Distribution Footprint:** Five-and-dimes, grocery stores, gas stations, newsstands, and Standard Oil stations. - **Hershey's Financial War Chest:** Backed by $40 million in personal liquid capital generated from selling his prior caramel venture.

[35:18](https://www.youtube.com/watch?v=GyWJeY55x-8&t=2118s) The Rise of the Chocolate Wholesale Business and Candy Bars

During World War I, European armies began sourcing chocolate as ration bars for their troops, and Hershey's emerged as the primary supplier. This massive operation introduced millions of American GIs to the slightly sour taste of Hershey’s chocolate, effectively hooking them on it. The chocolate bars served as a super dense store of energy and triggered a happiness-inducing emotional response in the brain—whether through dopamine or serotonin—which was a welcome stimulus for a soldier on the front lines.

When these soldiers returned home, they encountered Prohibition, which legally cut off access to alcohol. Seeking a new social lubricant, adults naturally turned to chocolate, sparking a massive national candy bar craze. Former penny candy entrepreneurs across the country realized they could market to adults. Because buying pure chocolate from Hershey's was expensive, these regional operators started stretching the chocolate by blending it with cheaper ingredients like nuts, nougat, or sugar. This allowed them to lower production costs while developing unique, regional flavor profiles. By the end of the 1920s, there were more than 40,000 different candy bars being manufactured in America.

``` [ Raw Cocoa Beans ] │ ▼ [ Hershey's Plant ] ───( Supplied Chocolate)───► [ 40,000+ Regional Entrepreneurs ] │ │ ▼ ▼ [ Branded Hershey Bars ] [ Combination Candy Bars ] (Stretched with nuts, nougat, sugar) ```

Hershey fully embraced this boom. Since they controlled the means of production and remained the primary source of milk chocolate, they became the "AWS of the chocolate business," supplying the core ingredient to their nominal competitors. This "blue jeans and pickaxes" strategy during the candy gold rush propelled Milton Hershey to the financial tier of the Rockefellers, Carnegies, and Vanderbilts. It marked a structural shift in the industry's value chain, transforming chocolate from a simple bean-to-bar consumer product into a robust wholesale enterprise. Meanwhile, the U.S. military favored these combination bars because the outer chocolate layer effectively sealed in high-energy ingredients like nuts and egg-filled nougat, keeping the "complete meals" fresh for the troops.

* **Hershey's Market Dominance:** Acted as the fundamental infrastructure provider for the 1920s candy boom by selling wholesale milk chocolate to regional entrepreneurs. * **The Military Utility:** Chocolate functioned as a natural sealant, preserving protein-rich and fat-heavy ingredients like nuts and nougat inside portable military field rations.

---

[39:38](https://www.youtube.com/watch?v=GyWJeY55x-8&t=2378s) Frank Mars and the Introduction of "Count Lines"

This booming marketplace set the stage for Frank Mars's fourth attempt at a candy company back in Minneapolis. Having observed the immense popularity of cream truffles while working out west in Seattle and Tacoma, Frank "stole" the concept and introduced "Victorian Buttercreams" to the Minneapolis market. He coated these buttercream truffles in wholesale Hershey's chocolate, finding solid local success. He later expanded his lineup with "Patricia's Chocolates," named after the daughter he had with his second wife, Ethel. Within a few years, the business was generating a highly respectable $100,000 in revenue. While not matching the sheer scale of Hershey's operations, it provided a comfortable living.

``` [ Traditional Chocolate Industry ] ──► Measured & sold strictly by WEIGHT [ New Candy Bar Industry ] ──► Manufactured & sold as COUNT LINES (Units produced) ```

In 1922, aiming to capitalize on the national combination bar craze, Frank launched his first true candy bar: the Marrow Bar. This type of product introduced a fundamental shift in how confectionery manufacturing was measured. Historically, chocolate was treated as a single substance and priced strictly by weight. However, because combination bars relied heavily on cheaper fillings, weight no longer mapped cleanly to the consumer product. As a result, factories began measuring their output by the number of units rolling off the line, giving rise to the industry term "count lines." Although Frank set up these modern count lines, the Marrow Bar failed to find a lasting audience.

* **Frank's Revenue (Early 1920s):** Reached approximately $100,000 in revenue primarily driven by his Victorian Buttercreams and Patricia's Chocolates. * **The Marrow Bar (1922):** Frank's first combination count-line bar, which ultimately failed to achieve commercial success.

---

[42:08](https://www.youtube.com/watch?v=GyWJeY55x-8&t=2528s) The Fateful Reunion and the Birth of the Milky Way

In the summer of 1923, a highly dramatic and legendary reunion occurred when Frank's estranged 19-year-old son, Forest Mars, suddenly reappeared in his life. According to company lore, Forest was working a summer college job as a traveling salesman in Chicago, pitching Camel cigarettes. After his boss demanded a massive sales push, Forest aggressively plastered downtown Chicago with marketing posters, covering nearly every storefront window on State Street. The stunt generated significant publicity and a mention in the *Chicago Tribune*, but it was also entirely illegal, landing young Forest in a Chicago jail cell.

``` [ Forest in Chicago Jail ] ──► Calls Estranged Father ──► Frank Mars Travels from MN to IL │ ( Reunited Lunch) │ ▼ "Malted Milkshake in a Bar" │ ▼ Milky Way Launched (1924) ```

Forest used his one phone call to contact his father, Frank—a detail commentators find highly amusing and suspect, given that the two had not spoken since Forest was six years old, and Frank lived an entire state away in Minnesota. Frank drove down, bailed him out, and took him to a local luncheonette to get reacquainted. Over a lunch where Forest ordered a wholesome malted milkshake, Frank explained his struggling candy business and the lackluster Marrow Bar. Forest allegedly proposed a breakthrough concept: "What if you take this malted milkshake here... and put that into a candy bar?"

While a modern Milky Way consists of nougat and caramel coated in chocolate—a mix distinct from an actual milkshake—intensive flavor R&D brought the concept to life. In the family archives, Forest later recalled the breakthrough with characteristic bluntness:

> "I'll be damned if a short time after our lunch the old man has a candy bar and it's a chocolate malted drink... he put some caramel on top of it and some chocolate around it... and that damn thing sold."

Launched in 1924, the Milky Way bar was an instant, undeniable triumph. In its very first year, it drove the company's sales from a modest $73,000 to a staggering $793,000. Unlike regional competitors who hand-made individual batches, Mars achieved this scale by implementing early industrial factory automation to churn out uniform count lines under a single brand.

* **Financial Leap:** The company's sales skyrocketed from $73,000 to $793,000 within a single year of launching the Milky Way bar. * **Industrial Approach:** Mars outpaced traditional competitors by manufacturing their new count lines in massive factory quantities rather than relying on localized, handmade production.

---

[50:25](https://www.youtube.com/watch?v=GyWJeY55x-8&t=3025s) The Origins of Forest Mars's Hyper-Competitive Drive

Forest's sudden emergence raises questions about his upbringing and how he arrived at UC Berkeley. After his parents' divorce when he was six, Forest was sent to live with his grandparents in a hardscrabble, rural mining community in Saskatchewan, Canada. Growing up in a deeply traumatic and insecure environment, Forest developed into a brilliant, hyper-ambitious, and intensely arrogant outlier. Biographer Deborah Cadbury captured his unstoppable nature well, noting that "Noah's flood wouldn't have deterred Forest Mars."

Defying the local norm of entering the mines as a laborer, Forest secured a scholarship to the University of California, Berkeley, to study mining engineering. He possessed a rare blend of a marketing mind and an engineer's focus on system-wide efficiency, which later shaped his corporate philosophy.

To support himself during his freshman year at Berkeley, Forest took a job in the campus cafeteria. Displaying his sharp negotiation skills, he struck a deal with the head cook: if Forest could source meat and provisions from local wholesalers below budget, they would split the savings and pocket the difference. The hustle worked flawlessly, netting Forest around $100 a week. Annualized to roughly $5,200, his student income was double what the average American head of household earned at the time. This extraordinary financial drive mirrors the youth stories of other iconic retailers and entrepreneurs, such as Ingvar Kamprad, Sam Walton, and Warren Buffett, who all famously out-earned adults while still in their youth.

* **UC Berkeley Education:** Forest enrolled in the School of Mining to study engineering, developing a systems-thinking mindset that he later applied to industrial manufacturing. * **Student Hustle Earnings:** Made roughly $100 per week ($5,200 annualized) by restructuring the university cafeteria's supply chain, double the average contemporary American wage.

[53:13](https://www.youtube.com/watch?v=GyWJeY55x-8&t=3193s) Forest Mars Realigns His Ambitions

During his freshman year at Berkeley, Forest Mars takes a summer job with a traveling Camel cigarettes sales team after the university cafeteria closes down. While traveling through midwestern hubs like Chicago or Minneapolis, Forest reconnects with his estranged father, Frank Mars. He discovers that Frank has finally found massive financial success with his candy company, which was generating around $100,000 a year even before the explosive launch of the Milky Way bar. Even assuming a conservative 10% profit margin, Frank was bringing home four to five times the income of the average American.

Seeing this concrete "existence proof" of a thriving family business completely reorients Forest's life goals. He realizes he no longer wants to be a standard engineer managing remote industrial operations. Upon returning to Berkeley, his literal words regarding his career path are, "the hell with running some mines in the Backwoods." These direct insights survive thanks to a rare video in the Mars family archives recorded after Forest retired but before he died, which a researcher named Joelle was permitted to review.

With his sights set much higher, Forest secures his father's financial backing to transfer to Yale University for his junior year. Much like the modern tech lore of Mark Zuckerberg heading to Harvard or coding Synapse with Adam D'Angelo, Forest's true motivation for attending Yale isn't just the academic prestige; he goes explicitly to network and learn how the elite upper class operates.

- **Frank's early success:** Making $100,000 annually prior to the Milky Way bar, significantly out-earning the average American. - **The Archives Video:** A rare, internal conversation between Forest and a longtime lieutenant captured late in his life, serving as the source for his most candid quotes.

[55:42](https://www.youtube.com/watch?v=GyWJeY55x-8&t=3342s) The DuPont Connection and the Move to Chicago

When Forest arrives at Yale, fortune places him in a room with a highly connected classmate: the nephew of Pierre S. du Pont. At this moment in history, Pierre S. du Pont is one of the most powerful corporate titans in America, simultaneously running both the massive DuPont chemical empire and General Motors (since DuPont was GM's largest shareholder). Forest strategically "worms his way through his roommate" to get face-to-face access to Pierre, aggressively pumping the tycoon for structural business insights. He spends his college years absorbing everything he can about the DuPont planning system, industrial chemical manufacturing, large-scale accounting, and corporate organization. It is an astonishing leap for a kid who was working in Canadian mines just years prior to find himself learning directly from an era icon on par with Rockefeller and Carnegie.

Upon graduating from Yale, Forest returns to his father's candy enterprise armed with institutional knowledge and immediately demands a strategic overhaul. His first major directive is moving the company out of Minneapolis and relocating to Chicago. Chicago is already established as the undisputed nerve center of the American candy industry—anchored by giants like the William Wrigley Jr. Company—and offers superior freight distribution networks crucial for launching a nationwide brand.

- **Wrigley's Presence:** The speakers joke about the incredible profitability of the chewing gum business by pointing out that the Chicago Cubs play in "Wrigley Field" next to a neighborhood dubbed "Wrigleyville." - **Strategic Location:** Chicago provided the main train lines necessary to rapidly ship finished candy bars out and bring bulk raw ingredients in.

[58:23](https://www.youtube.com/watch?v=GyWJeY55x-8&t=3503s) Industrial Scaling and the Great Depression

Frank Mars complies with the Chicago move, but the transition highlights a massive rift in ambition between father and son. Frank is older and wants to enjoy the fruits of his labor; he spends a staggering $500,000 to buy land next to a golf course, erecting a factory with a beautiful Spanish-style facade featuring stucco, cupolas, and wrought iron that "looks like a Hollywood studio building." Forest, conversely, focuses strictly on cold industrial efficiency. He hires the Austin Company—the iconic firm responsible for designing Henry Ford’s automotive assembly lines—to engineer the factory's interior layout. Forest drives the workforce relentlessly, insisting that the expensive, state-of-the-art lines run 24/7 on multiple shifts. By 1929, the first full year of operation, the facility is churning out a massive 20 million Milky Way bars annually.

Crucially, the Mars factory does not actually manufacture its own chocolate. They purchase it wholesale by the millions of dollars from Hershey, quickly becoming Hershey's single largest customer. At this point, Hershey acts much like Amazon does today, operating simultaneously as a direct consumer brand and an industrial wholesaler (the "AWS of chocolate"), happy to take their tax on any chocolate sold in America.

When the Great Depression hits, the candy business proves to be incredibly resilient. Between 1924 and 1932, Mars revenues skyrocket from $800,000 to $25 million. People facing the grim realities of economic ruin crave a cheap "dopamine hit," and both Mars and Hershey remain laser-focused on keeping prices low so their treats remain a habitual, everyday luxury for unemployed Americans.

- **1929 Production:** 20 million Milky Way bars produced in the Chicago plant's opening year. - **Revenue Growth:** Swelled from $800,000 in 1924 to $25 million in 1932, defying the worst years of the Great Depression.

[01:01:23](https://www.youtube.com/watch?v=GyWJeY55x-8&t=3683s) The Origins of Snickers and Three Musketeers

As immense wealth pours into the firm, Frank indulges in luxury, building a 20,000-square-foot vacation estate on a Wisconsin lake, purchasing his own private airplane, and buying a $2 million horse ranch in Tennessee which he names the "Milky Way Ranch." Forest detests this spending, wanting every dime reinvested into the business to rival DuPont. However, Frank's extravagant hobby gives birth to a historic product. In 1930, Frank creates a brand-new chocolate bar featuring nougat, caramel, and peanuts, naming it "Snickers" after his absolute favorite horse at the Tennessee ranch. The hosts laugh and pause to take a bite of a Snickers bar, joking about its modern marketing as an NFL energy bar. They note that an alternative "Forest Legend" claims Forest invented the bar after researching what the Roman army fed its marching legionnaires, discovering they relied on a dense, energy-rich mix of peanuts, eggs, and sugar.

In 1932, Mars expands the lineup with the Three Musketeers bar. The hosts point out that the modern bar's name seems confusing because it is just a single bar of chocolate-covered nougat with no peanuts or caramel. Originally, however, the product was literally sold as a single package containing three distinct bars of different flavors: chocolate, vanilla, and strawberry. War-time manufacturing restrictions during World War II and a concurrent spike in strawberry prices forced the company to permanently cut the vanilla and strawberry variations, leaving only the chocolate version behind.

- **Snickers Bar:** Launched in 1930 and named directly after a prize horse on Frank's Tennessee ranch. - **Three Musketeers Flavors:** Originally featured three separate bars (chocolate, vanilla, strawberry) before WWII supply shortages consolidated it into a single chocolate-nougat bar. - **Brand Strategy:** Rather than marketing variations of the same product, Mars uniquely built entirely distinct brands and personalities around each bar.

[01:08:03](https://www.youtube.com/watch?v=GyWJeY55x-8&t=4083s) The Ultimate Father-Son Fallout

By 1932, Forest recognizes that Mars has the momentum to completely crush the competition and directly challenge Hershey. He approaches his father with an aggressive expansion strategy, but Frank completely rejects the hustle. According to Forest's archived accounts, Frank tells him, "we're making enough money we have an airplane we've got the fishing place we've got horses why do we need anymore". Forest, unyielding, fires back with his own lifelong mission statement: "I want to conquer the whole goddamn world."

Forest issues his father a cold ultimatum: step aside, keep a two-thirds equity stake in the company to enjoy his retirement, and hand over one-third of the voting stock to Forest so he can run operations dynamically. Frank, deeply insulted that his son is demanding a third of the business he built from scratch, flatly tells him to go to hell.

The tension is exacerbated by bitter internal corporate dynamics. Forest is universally disliked by the staff because he drives everyone like slaves, whereas Frank is viewed as a relaxed, benevolent ruler. Furthermore, Frank has started a second family with his new wife, Ethel, and their young daughter, Patricia, making him protective of his wealth. Realizing he will never get control, Forest walks out of the meeting in a fury, explicitly telling his father to "stick his business up his ass." Abandoning the Chicago factory and America altogether, Forest packs his bags and sails for a completely new continent to build a rival empire from scratch.

[01:10:23](https://www.youtube.com/watch?v=GyWJeY55x-8&t=4223s) The Parting Gifts and Final Farewell

As Forest Mars heads out the door to leave America, his father Frank gives him two parting gifts: $50,000 in cash and the international rights to the wildly successful Milky Way recipe. Crucially, Frank retains the actual "Milky Way" brand name, meaning Forest can sell the formulation globally but cannot market it under the established family trademark. Taking these assets, Forest tells his father that he will never hear from him again, and he vanishes across the Atlantic. Tragically, this bitter exit proves to be the absolute final conversation between the two men. Just one year later, at only 50 years old, Frank collapses in his Chicago factory and dies of kidney failure; keeping his word, Forest does not return home for the funeral.

- **The Ultimatum:** Forest cuts off all communication completely upon leaving. - **Frank's Passing:** Frank Mars dies at age 50 from kidney failure in the Chicago factory plant. - **The Capital:** Forest starts his international venture with a lean $50,000 baseline budget.

[01:11:31](https://www.youtube.com/watch?v=GyWJeY55x-8&t=4291s) Ad Spot: Cruso's Climate-Aligned AI Infrastructure

Before diving into Forest's European exploits, the hosts take a moment to discuss one of their favorite companies and investment positions: Cruso, a climate-aligned AI infrastructure firm. Cruso builds and operates state-of-the-art GPU data centers tailored specifically for intense AI workloads. Unlike traditional cloud computing hyperscalers that have spent two decades building infrastructure optimized for low latency—crucial for real-time web services like e-commerce—AI training workloads don't care about latency. This paradigm shift allows Cruso to counter-position themselves by building data centers in remote locations where cheap, stranded energy "happens," such as fields where excess oil is actively being flared.

Traditional data centers rely heavily on massive air conditioning units, which are utterly insufficient for large GPU clusters running full-tilt for weeks or months at a time. To combat this immense heat, Cruso equips their data halls with direct-to-chip liquid cooling systems. By pumping liquid coolant through the equipment racks directly to coldplate heat exchangers mounted onto each individual chip, they deliver drastically increased power density. For teams training cutting-edge, large-parameter AI models, this specialized environment means significantly fewer hardware failures and vastly superior scaling capabilities.

[01:14:50](https://www.youtube.com/watch?v=GyWJeY55x-8&t=4490s) The Chocolate Masterclass in Switzerland

Arriving in Paris at the end of 1932 with his wife and young son, Forest Jr., Forest quickly realizes that to build a global empire and ultimately "stick it to his dad," he needs to master the one skill Frank never truly understood: how to make chocolate from scratch. Guided by his fierce mantra—"you aren't going to hire anybody to make a product for you to make you rich. They'll only make it for themselves"—Forest upends his family's comfortable, Ivy League-adjacent life. He moves them to Switzerland in early 1933 to learn from European masters.

Rather than walking in with the swagger of a wealthy American entrepreneur or seeking a comfortable management position, Forest takes entry-level factory floor line jobs. He works incognito first at Jean Tobler (producers of Toblerone) and later at the manufacturing giant Nestlé. He works completely under the radar simply because the factories "never asked" who he was. By working directly on the assembly lines, he learns firsthand how the heavy industrial machinery operates and masters the precise chemical processes required to craft world-class chocolate.

- **The Secretive American Market:** Forest couldn't learn this back home because American companies like Hershey were intensely secretive about their formulas. - **The Science Gap:** While Hershey understood how to mass-produce their recipes through trial and error, European manufacturers genuinely understood the underlying food science. - **The Expanding Taste Fiasco:** Highlighting Hershey's lack of scientific precision, the hosts share an anecdote about Hershey's failed attempt to open a second factory outside of Pennsylvania; they famously couldn't replicate their signature chocolate flavor because they didn't actually comprehend what scientifically caused its distinct "sour note."

[01:18:54](https://www.youtube.com/watch?v=GyWJeY55x-8&t=4734s) Launching the Mars Bar in Slow

By late 1933, confident that he has extracted all the technical knowledge he needs, Forest moves his family to England. He rents a small, one-room apartment directly above a tiny new factory space in Slow—a small industrial town about 20 miles west of London near modern-day Heathrow Airport. Utilizing his $50,000, he begins manufacturing a modified version of the Milky Way recipe adapted specifically for the British palate, which meant dialing back the malt flavor and adding significantly more sugar. Lacking the rights to his father's brand name, he dubs it the "Mars Bar," which rapidly ascends to become the most popular candy bar in the United Kingdom.

Because building a proprietary chocolate-processing line from scratch requires massive capital expenditures and intricate raw bean supply relationships, Forest compromises by cutting a deal with Cadbury to supply the liquid chocolate coating for his bars. This arrangement perfectly mirrors the early deal his father struck with Hershey in America. Since Cadbury's chocolate base is already perfectly calibrated to local British tastes, the Mars Bar becomes an immediate commercial triumph. By 1939, just five years after spinning up the assembly lines, Mars UK shockingly scales to become the third-largest candy company in Britain, trailing only the legacy giants Cadbury and Rowntree's.

- **The Quaker Legacy:** Unlike the brash, hyper-capitalist Forest, both Cadbury and Rowntree's were run by devout Quaker families focused heavily on community welfare. - **The Factory Utopia:** Cadbury famously built its factory out in the country to create a worker utopia—a structural approach that originally inspired Milton Hershey to build Hershey, Pennsylvania. - **The Corporate Legacy:** Even though the American and British branches of Mars eventually unified into a single corporate entity, the historical brand split remains visible today; a UK Mars Bar and a US Milky Way are essentially the same product, while the US "Three Musketeers" bar is marketed overseas as the "Milky Way."

[01:24:22](https://www.youtube.com/watch?v=GyWJeY55x-8&t=5062s) An Empire Mindset and the Leap Into Pet Food

The hosts gleefully highlight Forest's eccentric, hyper-competitive character by sharing a famous corporate legend from later in his life. Upon returning to America to seize total control of Mars Inc., Forest reportedly walked straight into his first executive management meeting, dropped to his knees, clasped his hands, and shouted to his stunned boardroom: "I'm a religious man... I pray for Milky Way, I pray for Snickers, I pray for M&M's!" As the hosts laughingly note, if Forest worshipped anything, it was efficiency, massive distribution, and global scale. He lived by a definitive personal ethos: "I'm not a candy maker. I'm empire-minded."

Driven by this boundless ambition, Forest makes a wild, unexpected pivot in 1934—just one year after launching his candy factory. He buys out a small, obscure British outfit named Chapel Brothers, which manufactured a canned dog food brand called "Chappies." This move is incredibly radical for the mid-1930s because the commercial pet food market practically did not exist; historically, dogs and cats simply ate leftover table scraps. Recognizing that the manufacturing processes of canning meat weren't fundamentally different from processing snacks, Forest correctly anticipates a massive, post-Depression cultural shift toward modern pet ownership, laying the groundwork for a multi-billion dollar empire that would eventually rival Nestlé Purina.

[01:27:21](https://www.youtube.com/watch?v=GyWJeY55x-8&t=5241s) The Pet Food Pivot and the Origins of Mars Culture

In 1935, during his first or second year of operating in Slough, England, Forrest Mars made a monumental decision to diversify into pet food. This recent diversification hedge turned out to be an immediate success, turning profitable within just a few years and generating the crucial cash flow needed to fund the rapid expansion of the core Mars bar business. The hosts marvel at the underlying mechanics of the decision, noting that the pet food industry apparently offered "good margins" even back in the mid-1930s. This early period in England served as the crucible where the culture and fundamental principles of Mars were permanently forged.

Today, anyone who has ever worked at Mars will quote these principles to you "religiously." They function identically to the Amazon leadership principles, with employees routinely referencing them by number in daily conversations. The bedrock values originally began as a codified internal document titled "The Mars Way." After Forrest retired and passed the torch to his sons, the next generation adapted the text into what are now celebrated as the official "Five Principles" of the company.

- **Timeline of Pet Food Entry:** Diversification began around 1934–1935, turning profitable within a couple of years. - **The Mars Way:** The precursor internal document written by Forrest Mars to solidify company culture before it was officially adapted by the next generation.

[01:28:58](https://www.youtube.com/watch?v=GyWJeY55x-8&t=5338s) Principle One: An Obsession with Quality

The first and most vital principle is Quality. Forrest Mars was intensely, completely obsessed with quality across every single dimension of the operation, from the raw ingredients to the candy bars themselves, the precision of the wrappers, shelf placement, and retail displays. He understood ahead of his time that candy is fundamentally an impulse purchase, meaning that visual consistency, packaging, and exact product placement are the ultimate drivers of consumer buying behavior. This obsessive standard often clashed with his notoriously volatile temper. In one famous corporate anecdote, Forrest discovered a minor defect in a wrapper, called his executives into a room, and literally "hurls it at the glass" to express his fury.

Decades before the famous Toyota Production System was recognized globally, Forrest had effectively implemented its core concept in his 1930s UK factory. He instituted a cultural norm where every single worker in the entire facility had the authority to completely stop the production line at any time, for any reason, if they spotted something out of place, dirty, or imperfect. If a defect was found, Forrest would "scorch the earth" by throwing out the entire batch. He would relentlessly berate any manager or employee who failed to pull the plug, emphasizing that errors must never reach the finished product. Crucially, this wasn't quality for quality's sake—much like IKEA, it was about offering the highest possible value for money, allowing Mars to build an insurmountable scale lead over competitors.

[01:31:23](https://www.youtube.com/watch?v=GyWJeY55x-8&t=5483s) Principle Two: Radical Responsibility and the First Open Office

The second principle is Responsibility. Despite his terrifying corporate intensity, Forrest Mars was fundamentally not a micromanager. While he insisted on knowing how to perform every job in the business—including the manual art of making chocolate—he recognized that scaling to the heights of industrial giants like DuPont or General Motors required hiring the best people and leaving them entirely in charge. To incentivize top-tier talent to work at a tiny, startup factory in a new country, Forrest decided to simply pay them astronomical sums. For years, the standard baseline at Mars was for employees to earn three to four times the normal market salary for their role. While that baseline has compressed over time to roughly double the market rate, the company still mandates paying at least 10% above the industry average.

The hosts clarify that this high compensation was driven aggressively by company-wide performance bonuses rather than massive flat salaries. In tough years, bonuses were cut, making employment feel much more "akin to being a partner in a business than it is to being an employee." Every worker's pay was tied to hitting overall company metrics, with zero individual performance elements save for one famous metric: punching the clock on time. Employees received a strict 10% bonus if they were never late a single day all year. From Forrest Mars down to the modern CEO, everyone carried a physical time card to punch in and out.

Furthermore, Forrest used this operational philosophy to rebel fiercely against his father's corporate opulence. He stripped away all executive perks—banning reserved parking spaces and private offices. Long before Silicon Valley tech companies claimed the concept, Mars created the world's very first completely open-plan office layout in the 1930s.

- **Historical Compensation Structure:** Historical take-home pay was 3x to 4x the industry norm, stabilizing in later eras to roughly 2x, with a strict policy to stay at least 10% above industry competitors. - **Punctuality Incentive:** A clean attendance record with zero lateness over the course of an entire year guaranteed a 10% individual bonus. - **Office Design Restrictions:** To this day, Mars offices feature open floor plans with cheap, uniform black metal desks. Conference rooms purposefully do not have doors to enforce absolute internal transparency, completely contrasting the company's hyper-private public profile.

[01:35:59](https://www.youtube.com/watch?v=GyWJeY55x-8&t=5759s) Principle Three and Four: Mutuality and Return on Total Assets (ROTA)

The third principle is Mutuality, reflecting Forrest's belief that while business is hyper-competitive, it operates within an interdependent ecosystem. Suppliers, distributors, and retailers all have to make money. By ensuring that external partners grew wealthier selling Mars products than those of any competitor, Mars generated a compounding, long-term advantage.

The fourth principle, Efficiency, stems directly from Forrest's time at Yale and his deep obsession with management literature. While operating in England, Forrest devoured an academic textbook titled *Higher Control in Management* by T.G. Rose. The book argued that managers should ignore standard top-line revenue or profit growth, and focus entirely on a metric called Return on Total Assets (ROTA), calculated as net profit dollars divided by the total dollar value of fixed assets.

``` ROTA = Net Profit Dollars / Total Dollar Value of Fixed Assets ```

While textbook accounting calculates assets by their historical balance-sheet cost, Forrest viewed that as "insane." Instead, Mars constantly revalues its factories and real estate based on their current replacement cost. They instituted a rigid target of an 18% ROTA for every single division and factory, forcing every corporate investment to fully pay for itself in less than five years. Hitting exactly 18% was critical: anything lower meant resources were being wasted, while anything higher meant the company was pocketing too much profit instead of aggressively reinvesting in marketing, advertising, or product pricing.

- **Efficiency Benchmarks:** In 1990, Mars generated $429,000 in revenue per employee, compared to just $228,000 per employee at its chief rival, Hershey, despite operating with 30% fewer workers overall. - **Production Velocities:** The company's relentless 24-hour manufacturing lines achieve massive scale economies; for example, the Chicago plant produces fun-size Milky Way bars at a staggering rate of over 5,500 bars per minute. - **Tax Strategy:** Mars aggressively pumps excess profit dollars directly back into internal R&D and custom proprietary manufacturing equipment, keeping net income lower to legally minimize corporate tax yields in a fashion similar to media mogul John Malone.

[01:43:30](https://www.youtube.com/watch?v=GyWJeY55x-8&t=6210s) The Principle of Freedom and Family Secrecy

The core principle that guided Mars in its later years was freedom. In the early days, for Forest Mars Sr., freedom simply meant building his own business, breaking away from his father, and proving his own worth. Over time, however, this evolutionized into a fierce commitment to private family ownership, avoiding public markets, and refusing to take on debt. In the generations that followed, this translated into extreme privacy. For years, the Mars family refused to have any photographs taken of them out of fear of publication.

When *The Washington Post* published an article about them by journalist Joel Glenn Brenner, it featured what was believed to be the first public photographs ever taken of John and Forest Mars Jr. The family was so displeased with the article that they fired their PR consultant. To ensure the photos could never be reused, they tracked down the newspaper's freelance photographer and paid them $20,000 to buy the rights to the images. This absolute control mirrors other private giants like IKEA, or even Meta's board structure, where complete ownership grants the ultimate freedom: the ability to sub-optimize the short term, endure lumpy multi-year periods, and invest heavily for a vision a decade away.

- **Primary Metric:** Private ownership allowed Mars to operate with Return on Assets (ROA) as their primary operating metric rather than short-term profitability.

[01:45:21](https://www.youtube.com/watch?v=GyWJeY55x-8&t=6321s) Leaving the UK and the Threat of World War II

By the end of the 1930s, Forest's UK enterprise had achieved incredible success, becoming the third-largest candy company in the country. However, the onset of World War II disrupted everything. To fund the war effort, the British government imposed a heavy tax on all foreign residents. Forest firmly believed that his major British competitors, Cadbury and Rowntree's, had explicitly lobbied Parliament to implement this tax to run him out of town, as his rapidly growing chocolate business posed a massive threat to their domestic market share.

Whether driven by competitor lobbying or his own long-standing ambition to conquer America, Forest decided it was time to return home. In 1939, he made the audacious move of relocating his family back to the United States while leaving his UK factories running. It remains a staggering historical detail that during the chaos of a breaking world war, Forest trusted his British employee base enough to maintain his ownership and keep operations running across the ocean.

[01:47:40](https://www.youtube.com/watch?v=GyWJeY55x-8&t=6460s) The Return to Chicago and a Secret Weapon

Upon returning to America in 1939, Forest set his sights on Chicago Mars, effectively declaring, "Honey, I'm home." However, his late father's company was now being run by Forest’s widowed stepmother—the other Ethel—and her half-brother, who served as president and CEO. They detested Forest and blocked him from getting anywhere near the company. Forest was only a minority shareholder, holding an estimated 10% to 20% of the equity, while the second wife, his half-sister Patricia, and the employees held the rest.

Barred from his father's empire, Forest did what he always did: he resolved to start from scratch to prove them wrong. This was the final gauntlet—competing on the world's greatest stage against his family's established brand, despite not having lived in the U.S. for nearly a decade. He was confident, however, because he had brought back a secret weapon from Europe: a chocolate candy he had seen soldiers eating during the Spanish Civil War called *dragee*.

- **Origin of Dragee:** Originally a French style of candy designed for noble ladies who wanted to eat chocolate without melting it onto their white-gloved hands. - **The Concept:** Small, round pieces of chocolate coated in a hardened sugar syrup shell, a process confectioners call "hard panning," which prevented the chocolate from melting in hot weather or hands.

[01:50:35](https://www.youtube.com/watch?v=GyWJeY55x-8&t=6635s) Sponsor Spotlight: StatSig

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- **Bluesky Use Case 1:** When the Brazilian Supreme Court banned X, Bluesky tracked a massive spike in Portuguese posts via a StatSig dashboard, alerting them to the sudden user migration. - **Bluesky Use Case 2:** Bluesky used StatSig to run A/B testing to mathematically prove that users genuinely enjoy and prefer a purely chronological feed over traditional algorithmic timelines. - **Bluesky CTO Quote:** "We thought that we didn't have the resources for an AB testing framework, but StatSig made it achievable for a small team." - **Special Offer:** StatSig offers a generous free tier for small companies, a startup program providing 1 billion free events ($50,000 in value), and Enterprise discounts at `[statsig.com/acquired](https://statsig.com/acquired)`.

[01:53:29](https://www.youtube.com/watch?v=GyWJeY55x-8&t=6809s) The Legendary Handkerchief Meeting at Hershey

Resuming the history, the conversation turns to M&M's. In August 1939, Forest executed an ingenious revenge campaign by traveling to Hershey, Pennsylvania. He arrived completely unannounced and anonymously took the public factory tour. After the tour, he asked to see William Murray, the president and de facto operator of Hershey, while Milton Hershey was preoccupied with the town trust and orphanage. Forest got past the front desk by simply telling the guide, "Just tell him Mars is here," implying that the giant Chicago Mars company had arrived.

Once inside Murray's office, Forest executed a theatrical move reminiscent of Steve Jobs. He pulled a handkerchief from his pocket, opened it on Murray's desk, and revealed the *dragee* chocolates. He challenged Murray to try one, pointing out that these chocolates had been in his pocket all the way from New York, through a hot and muggy August train ride, and through the entire factory tour without melting. Murray was instantly hooked.

- **The Myth of Peanut Butter M&M's:** The hosts note a legend that peanut butter M&M's historically missed their full market potential because Forest Jr. and John Mars grew up in England, making them less appreciative of the uniquely American flavor combination popularized by former Hershey employee H.B. Reese.

[01:57:24](https://www.youtube.com/watch?v=GyWJeY55x-8&t=7044s) The Audacious 80/20 Deal

Forest and William Murray hammered out a deal to start a brand-new joint venture called "Mars & Murray" ($M\&M's$). The partnership was structured as an astonishing 80/20 split, with Forest retaining 80% ownership and Murray's son, Bruce Murray, receiving 20%. Forest brought nothing but the idea to the table, while Hershey was expected to supply the chocolate, the sugar, the technical expertise, and the capital.

Forest specifically targeted William Murray rather than Milton Hershey for two brilliant reasons. First, Murray was 66 years old and merely an employee; the company was owned by the Hershey Trust, meaning Murray had no corporate inheritance to pass down to his family. Forest offered him a legacy for his son. Second, Bruce Murray gave the venture a massive competitive advantage: direct access to the U.S. Military purchasing division. Because Hershey held an exclusive contract to supply chocolate to the military, this new partnership allowed Forest to bypass wartime rationing by positioning M&M's as the ultimate non-melting military ration. By making Bruce the partner rather than William, Murray avoided a direct conflict of interest with his employer contract at Hershey.

The Birth of M&M Limited and the Ultimate Rivalry

In the spring of 1940, Forest Mars and Bruce Murray—the son of Hershey’s executive William Murray—established M&M Limited as a partnership. By 1941, they built a factory in Newark, New Jersey, and officially commenced production. The sheer strategic irony of this move is underscored by a vivid observation from the Cadbury book, which notes that Forest made his triumphant return to the United States "without the support of his own family but with the support of his leading rival Hershey." Rather than being purely diabolical, the hosts view it as a stroke of strategic genius.

When the United States entered World War II in 1941, strict chocolate rationing was instituted for domestic consumers while military consumption skyrocketed. Hershey became the US military's premier supplier, commanding the only major milk chocolate contract and operating at a significant scale. Consequently, Hershey severely bottlenecked its wholesale chocolate distribution to regular enterprise customers like Mars in Chicago. The sole exception to this rule was M&M Limited, protected entirely because Bruce Murray owned a 20% minority stake in the partnership.

- **Partnership:** Founded in spring 1940 by Forest Mars and Bruce Murray. - **Factory Location:** Newark, New Jersey; production began in 1941. - **WWII Dynamics:** Military became Hershey's largest customer, sparking intense civilian rationing. - **The Wholesale Exception:** M&M Limited was the only enterprise customer whose wholesale chocolate supply was not restricted by Hershey.

The Military Pipeline and the Smarties Connection

During the war, the vast majority of M&M Limited's output went straight to the armed forces, with the Air Force emerging as the top customer, followed by the Army and Navy. Because William Murray handled Hershey’s sales relationships with purchasing officers at the Pentagon, his son Bruce was perfectly positioned to tag along and manage these massive military accounts. The hosts joke about Bruce being the "head of sales" for a company that didn't even sell to the public yet and had only three customers.

This raises a fascinating sidebar regarding the origins of candy-coated chocolate. While Forest claimed his inspiration came from observing soldiers during the Spanish Civil War, British listeners will instantly recognize the similarity to Smarties, which Rowntree's introduced to the British market in 1937—well before Forest left the UK. The early M&M's even copied the distinct tube packaging used by Smarties. According to documentation in the Nestlé archives, Forest and George Harris of Rowntree's both learned about dragée candies around the same time and allegedly forged a gentleman's agreement: Rowntree's kept the British market, Forest took the American market, and in return, Forest granted Rowntree's the rights to manufacture and market Mars Bars in British Commonwealth countries like Canada and South Africa.

- **Top Customers:** The US Air Force was the number one customer, followed by the Army. - **Smarties Timeline:** Rowntree's launched Smarties in the UK in 1937, three to four years before M&M's started in the US. - **The Tradeoff:** An alleged gentleman's agreement traded the US market for M&M's in exchange for Commonwealth rights to the Mars Bar. - **Packaging:** Early M&M's utilized tube packaging identical to British Smarties.

Diversifying into Rice: The Origins of Uncle Ben's

As M&M's grew, Forest sought another cash-flowing business to diversify his expanding empire, similar to his acquisition of Chappel Brothers. This led him to Houston, Texas, to enter the rice business. While multiple versions of the story exist, the most accurate account is that during his time in England, Forest befriended a chemist who invented "parboiling"—a new method for milling rice that made it more nutritious and faster to cook.

In 1942, Forest and the chemist formed a joint venture in Houston, patented the method in America, and immediately began selling the rice to the military, which was desperate for cheap, nutritious calories. This business eventually became Uncle Ben's Rice (known today as Ben's Original). Launching a branded rice product was considered a radical move at the time because rice was viewed strictly as an unbranded commodity. Today, Ben's Original generates over $1 billion in annual revenue, proving to be another vital puzzle piece assembled by Forest.

- **Launch Year:** 1942 joint venture established in Houston, Texas. - **Innovation:** Patented a "parboiling" milling process for faster cooking and higher nutritional value. - **Market First:** The very first branded rice product ever launched in America. - **Modern Scale:** Ben's Original now surpasses $1 billion in annual revenue.

The Bathroom Reports and the Million-Dollar Fistfight

Following the end of World War II, M&M's attempted to pivot to the civilian market, expecting an instant success story reminiscent of Hershey's post-WWI boom. Instead, the consumer launch fell incredibly flat. The tepid sales figures created massive friction between Forest and Bruce. Because Bruce was in charge of sales, Forest demanded a daily written report of the previous day's metrics every single morning. Whenever the sales missed Forest's targets, Forest would writes "FAILED" across the paper in thick red ink and tape it to the wall of the company's men's restroom.

The hosts note that while Forest was an undeniable genius, he possessed a brutal temper and was actively trying to torment Bruce into leaving so he could claim 100% ownership of the company. In 1949, after four years of middling postwar sales, the tension culminated in a literal office fistfight at the New Jersey plant. Forest had security escort Bruce off the premises and fired him from his executive role. This triggered intense buyout negotiations, concluding with Forest buying out Bruce's 20% stake for $1 million. In 2024 dollars, this valued the company at roughly $65 million, giving Bruce a handsome $13 million exit for nine years of work on a candy that had not yet truly caught on with the public.

- **Postwar Slump:** Five years elapsed between the company's founding and its civilian launch due to WWII, but initial consumer reception was weak. - **Intimidation Tactics:** Forest taped failed daily sales reports inside the men's bathroom to humiliate Bruce Murray. - **The Ouster:** A physical altercation in 1949 resulted in Bruce being thrown out of the factory. - **The Buyout:** Forest purchased Bruce's 20% stake for $1 million in 1949, valuing the young enterprise at $5 million.

The Marketing Revolution and the Legendary Slogan

Up until 1950, M&M's didn't even have the iconic "M" printed on the candies. Immediately after securing total ownership, Forest hired the ad agency Ted Bates & Company to execute a sophisticated market study. While corporate giants like Procter & Gamble were beginning to utilize systematic product management, the candy industry still operated purely by entrepreneurial instinct. Hershey famously maintained a strict policy of zero advertising, a rule they didn't break until 1970, and their entire corporate growth strategy was driven by a single old file card from Milton Hershey that simply read: "grow sales 4% every year." From this point onward, the chocolate wars became a battle of marketing and distribution rather than pure product innovation.

The Ted Bates agency discovered that while candies were historically an adult market, M&M's held immense appeal for children. However, because parents hold the purchasing power, the marketing needed to speak directly to parental psychology. This realization birthed one of the most brilliant slogans in advertising history: "The milk chocolate that melts in your mouth, not in your hand." David points out that the core truth of the slogan targets a parent's deepest desire: keeping their children quiet without having them smear melted chocolate all over the furniture and walls.

- **Ad Agency:** Hired Ted Bates & Company in 1950 to conduct comprehensive market research. - **Hershey's Stance:** Maintained an absolute ban on advertising until 1970, relying on a flat 4% annual growth target. - **The Slogan:** "The milk chocolate that melts in your mouth, not in your hand."

Crushing the Competition and Printing the "M"

To reinforce this parental marketing, M&M's heavily sponsored the most popular children's television programs of the era, including *The Mickey Mouse Club* and the *Howdy Doody* show. The strategy was an astronomical success. By 1956, just five years after launching the campaign, M&M's skyrocketed to become the number-one selling candy in America, bringing in over $40 million in annual sales and outpacing giants like Snickers, Milky Way, and the classic Hershey bar.

To combat a rising tide of copycats, the company began printing a small "M" on every single piece of candy. The imprint was originally black when introduced, but was switched to white in 1954. This change was accompanied by a secondary ad campaign urging consumers to "look for the M on every piece" to ensure authenticity. Through this, Forest proved he wasn't just selling candy; he was building intellectual property, consumer trust, and long-term nostalgia. By 1954, the very first television commercials featuring animated M&M's characters hit the airwaves, laying the groundwork for the cultural mainstay the brand is today.

- **Sales Growth:** Went from near-zero civilian traction to over $40 million in annual sales by 1956. - **Market Dominance:** Surpassed Snickers, Milky Way, and Hershey bars as America's top candy by the mid-1950s. - **The Iconic Imprint:** The trademark "M" was introduced to prevent copycats, transitioning from black to white ink in 1954. - **Media Expansion:** The first animated M&M's TV commercials debuted in 1954.

[02:19:02](https://www.youtube.com/watch?v=GyWJeY55x-8&t=8342s) The Battle for the Candy Category and the Rise of TV

M&M's early character concepts were hand-drawn and went through several iterations, but the core identity—personified M&M's delivering witty commentary—remained remarkably consistent from the beginning. This early branding established M&M's as a market powerhouse, much to the alarm of Hershey's. In a defensive move, Hershey's launched a copycat product called "Hersheyettes." However, the product failed miserably because it lacked an independent identity. In order to describe what a Hersheyette even was, marketers were forced to say "they're like M&M's." This perfectly illustrates why being first to market and rapidly achieving scale is so critical; M&M's successfully became the "product of record" for the entire category. While Hershey's would later find success with Reese's Pieces, the mid-1950s belonged to Mars's aggressive optimization.

The landscape shifted dramatically around 1955 when televisions became a staple in American living rooms. This was a "match made in heaven" for candy companies looking to manufacture consumer demand. Television commercials allowed brands to forge immediate emotional connections through quick, memorable taglines. As historian Deborah Cadbury noted, "one great TV campaign could shift Decades of Customer Loyalty in a matter of weeks," particularly in a burgeoning market like candy-coated chocolates. Concurrently, Mars began adding a burst of color to their lineup. Peanut M&M's, which originally launched exclusively in tan, were expanded in 1960 to include yellow, red, and green.

- **Hersheyettes:** A failed copycat product by Hershey's that suffered from a weak market position because it had to be explained by referencing M&M's. - **Peanut M&M's Color Rollout:** Originally launched only in tan; yellow, red, and green were introduced in 1960. - **The Power of Television:** Cultivated massive consumer demand post-WWII; allowed singular campaigns to upend decades of brand loyalty in weeks.

---

[02:21:05](https://www.youtube.com/watch?v=GyWJeY55x-8&t=8465s) The Automated Empire and Forest's Multi-Million Dollar Footprint

In 1955, Mars expanded into a highly lucrative but lesser-known arena: the vending machine industry. Operating under a UK-based business named "Vend Pack," Mars engineered earliest-generation vending machines, building highly advanced coin mechanisms and bill validators. They became the global market-share leader in bill-reading technology before eventually selling off the division in 2006. This venture exemplified the "empire-minded" scale of Forest Mars. By the late 1950s, his international operations were massive. He owned the UK’s most popular candy bar (the Mars Bar), had transitioned into manufacturing his own chocolate in Europe rather than sourcing it from Cadbury, and commanded the top candy product in the US with M&M's. Additionally, he owned the world's dominant pet food business and the largest branded rice business (Uncle Ben's).

Combined, Forest's web of companies was generating roughly $200 million in annual revenue. Yet, despite this spectacular wealth, two glaring goals eluded him: he did not control his late father’s Chicago-based company, Mars Inc. (holding only about a 10% stake), and he was still heavily dependent on Hershey's for his American chocolate supply. If Hershey's ever chose to cut him off, M&M's would be completely crippled. Fortunately for Forest, Hershey's enjoyed the massive revenue from their largest customer too much to pull the plug, giving him the time he needed to strategically plot his next moves.

- **Vend Pack:** Mars's vending machine and currency-validation business started in England; sold in 2006 after becoming a global leader in bill validators and change makers. - **Global Revenue (Late 1950s):** Forest's independent empire brought in ~ $200 million annually, compared to Chicago Mars's $50 million. - **Supply Chain Vulnerability:** M&M's in the US relied entirely on chocolate supplied by its chief competitor, Hershey's.

---

[02:23:32](https://www.youtube.com/watch?v=GyWJeY55x-8&t=8612s) Infiltrating Chicago Mars and the Corporate Takeover

When Mars family patriarch Frank Mars died, the majority ownership of Chicago Mars (around two-thirds) went to his second wife, Ethel, while the remaining third was distributed among minor shareholders and employees. Following Ethel’s death in 1945, her dominant stake was split 50/50 between her stepchildren, Patricia and Forest. Emboldened by the staggering success of M&M's in the 1950s, Forest set his sights on taking total control of his father's original company. He marched into the Chicago board room, citing his one-third ownership, and demanded a physical office and unhindered operational inspection rights. The board carelessly granted the request, completely misjudging his intent. They jokingly asked themselves if anyone saw an issue with letting a "fox that wants to hang out in our Hen House" inside.

They quickly regretted it. Forest essentially relocated to Chicago, showing up every day to aggressively criticize operations. He bombarded the board with memos detailing the failures of CEO William (Ethel’s half-brother) and campaigned for his termination. This aggressive, incremental takeover strategy mirrors the way modern figures like Elon Musk acquired Twitter—starting with a minor position, gaining a board footprint, issuing demands, and ultimately seizing the reins. When William retired in 1959, Forest lobbied his sister Patricia and the remaining shareholders to let him buy them out. Instead, Patricia chose to block Forest by installing her husband, James, as CEO.

- **Ownership Breakdown:** Frank Mars's will eventually left 1/3 of Chicago Mars to Forest and 1/3 to Patricia, with the final 1/3 held by various employee and legacy shareholders. - **The Infiltration:** Forest used his 1/3 stake to secure an office in Chicago, using it as a base to audit the company and author critical memos aimed at ousted management.

---

[02:26:24](https://www.youtube.com/watch?v=GyWJeY55x-8&t=8784s) "I Am Altering the Deal": The Fall of James and Reification of Mars Inc.

James proved to be a "totally, totally terrible CEO." Under his leadership, Chicago Mars's revenue plummeted from $50 million in 1959 to $40 million by 1963. While a 20% drop sounds bad on paper, it was catastrophic in reality due to the company's incredibly high fixed-cost manufacturing base, completely wrecking their return on total assets. To make matters worse, James chose to run the Chicago-based manufacturing plant while commuting all the way from San Diego in an era long before Zoom. Seeing his opportunity, Forest flew to San Diego in 1963 to pressure a desperate Patricia. He warned her that the company was facing imminent bankruptcy and that only he could save it. She finally relented and agreed to sell her stake under two strict conditions: James must keep his job, and the combined global empire must be unified under their father's legacy company name, Mars Incorporated. Forest readily agreed to both.

With Patricia's shares secured, Forest spent the first half of 1964 systematically buying out the remaining minority shareholders. Exactly twenty years after Ethel's death, Forest finally achieved absolute control of Mars Incorporated. It was an astonishing financial feat; Forest bought out two-thirds of a $40 million company entirely out of his own pocket without any external financing. Upon taking the keys to the Chicago headquarters, Forest famously went full "Darth Vader." He marched in and immediately ripped down all the office walls to implement a radical, completely open floor plan. He demolished the executive dining room, sold off the luxury corporate art collection and helicopter, and handed everyone—including his brother-in-law James—a time card to punch. Later that year, when Patricia tragically died of cancer before hitting the age of 50, Forest promptly altered the deal, fired James, and assumed the mantle of undisputed CEO.

- **Revenue Collapse:** Under James's remote leadership, Chicago Mars revenue fell 20% ($50M down to $40M) between 1959 and 1963. - **Corporate Restructuring:** Forest unified all of his domestic and international businesses under the umbrella of his father's original company, Mars Incorporated, in 1964. - **Cultural Shock:** Forest eliminated corporate hierarchy by installing open floor plans, liquidating executive perks (art, helicopters, private dining), and forcing executives to punch time cards.

---

[02:31:16](https://www.youtube.com/watch?v=GyWJeY55x-8&t=9076s) Ditching Hershey and the Zero-Sum Game of Supermarket Shelf Space

With the empire consolidated, Forest set out on his final conquest: making his own chocolate in America and breaking ties with Hershey's. He called up Hershey’s management to deliver the news. The Hershey team reacted with absolute disbelief, telling him he would be "nuts" to absorb that much fixed cost when Hershey had an entire town dedicated to cheap chocolate production. They estimated it would take Mars at least ten years just to break even on the capital investment. Forest ignored them, gave his plant managers a strict six-month deadline to start internal chocolate production, and quickly reaped massive benefits from operating leverage. This bold move aligned with the famous Alan Kay quote, "anyone who's serious about software should make their own Hardware"—or in Mars's case, if you are serious about the "quality principle," you must control all means of production.

``` Total Candy Purchases Breakdown (Mars 1979 Market Research) ┌─────────────────────────────────────────────────────────┐ │ [████████████████████████████████████████ ] 70% │ Impulse Purchases │ [██████████ ] 10% │ Planned Purchases └─────────────────────────────────────────────────────────┘ ```

Controlling production allowed Mars to master a scale-economies market where retail shelf space is a brutal, zero-sum game. Candy is overwhelmingly driven by consumer impulse. While historical estimates vary between 70% and 90%, a pivotal 1979 internal market research study commissioned by Mars confirmed that a staggering 70% of candy sales were purely unplanned impulse buys. Armed with this data, Mars launched a massive, historic initiative to lobby supermarkets to place dedicated candy displays directly next to cash registers. Before this push, checkout candy placement did not exist in major grocery chains. Because shoppers buy whatever is directly in front of their faces, achieving massive manufacturing scale gave Mars the leverage it needed to dominate checkout lanes and systematically push Hershey's to the bottom of the grocery shelves.

- **The Six-Month Ultimatum:** Forest forced his manufacturing teams to spin up an in-house chocolate production line in just six months, defying Hershey’s 10-year unprofitability predictions. - **Impulse Buy Statistics:** Mars's 1979 consumer research indicated that 70% of candy purchases were impulse-driven, prompting their ubiquitous checkout lane displays. - **Supermarket Power Dynamics:** The rise of chain supermarkets consolidated retail power, shifting leverage away from localized candy makers and turning shelf space into an aggressive volume game.

[02:36:45](https://www.youtube.com/watch?v=GyWJeY55x-8&t=9405s) The Brain-Dead Era of Hershey and the Scale Economy Entrepreneur

The retail landscape underwent a massive structural shift as television exploded and supermarkets began demanding a smaller number of high-performing Stock Keeping Units (SKUs). Grocers wanted to avoid inventory overwhelm and explicitly tied shelf space allotment to heavy marketing campaigns, knowing that television commercials were what moved product in their stores. This convergence of new TV technology and changing consumer behavior created massive returns for the scale player. Sadly for Hershey, with the exception of advertising, they had actually been benefiting from this exact strategy across their entire corporate life. Lower prices, nationwide distribution, and massive shelf placement were Milton Hershey's core playbook; the company just failed to put its foot on the gas at the critical moment.

Following the tenures of Milton Hershey and William Murrie, the company essentially became "brain dead" for about three decades, operating completely without an advertising or marketing department. They internalized a rigid behavior simply because it was tradition, senselessly treating their anti-advertising stance like a religion long after the environment where that rule made sense had vanished. A primary driver of this detachment was Hershey’s unique ownership structure; while it was a public company, the controlling interest was held by a trust whose management had become deeply removed from market realities. This vacuum created the perfect historical moment for the rise of the "scale economies entrepreneur," a personality type epitomized by Forrest Mars, who capitalized on globalization, national branding, and immense mass distribution to capture markets that were previously non-economic to reach.

- The shift to supermarkets meant retailers only wanted to stock a small number of SKUs backed by heavy television campaigns. - Hershey operated for roughly 30 years without any marketing department, rigidly adhering to an outdated anti-advertising rule. - The Hershey trust's management grew completely insulated from actual business and market realities.

---

[02:39:54](https://www.youtube.com/watch?v=GyWJeY55x-8&t=9594s) The Seventy-Year Price Freeze and the Shrinkflation Backfire

When Milton Hershey introduced the iconic Hershey chocolate bar in 1900, he priced it at a single nickel so it would be universally affordable. In an unbelievable display of corporate inertia, Hershey kept the price of that bar at exactly 5 cents from 1900 until November 1969. To put this nearly 70-year freeze into perspective, a nickel in 1900 had the purchasing power of roughly 23 cents by 1970—requiring the company to absorb a 4.5x inflationary gap. Instead of adjusting the sacrosanct nickel price, Hershey repeatedly altered the quantity by continuously shrinking the physical size of the bar.

The original 1900 Hershey's bar weighed 1.25 ounces, but by 1969, "shrinkflation" had whittled it down to half its original weight. This created a massive visual vulnerability against competitors; a contemporary Snickers bar weighed 1.86 ounces, and even though much of that mass came from cheaper ingredients like peanuts and nougat, it felt incredibly substantial. Consumers didn't care about the cheaper filling; they cared about perceived value, leaving the paper-thin Hershey bar looking ridiculous by comparison. When soaring commodity prices finally forced Hershey to double its price to 10 cents in 1969, they tried to appease the public by restoring the bar to its original 1.25-ounce size. Because they lacked a marketing department to communicate with customers, the move backfired terribly; consumers felt outraged by the sudden price hike and realized they had been systematically gamed for decades.

- The Hershey bar price remained exactly 5 cents for nearly 70 years (1900 to November 1969). - Inflation turned 5 cents in 1900 into the equivalent of 23 cents by 1970. - The bar's weight was cut in half over seven decades, dropping from 1.25 ounces to just over 0.6 ounces. - A modern Snickers bar weighs 1.86 ounces, offering a much more "meatier, satisfying" consumer experience compared to the thinned-out Hershey bar. - The phenomenon of keeping prices flat while shrinking food sizes remains a major political and economic issue today, even drawing public callouts from U.S. presidents.

---

[02:43:54](https://www.youtube.com/watch?v=GyWJeY55x-8&t=9834s) The Price-and-Size War and Mars Claiming the Crown

Delighted by Hershey's strategic blunder, Forrest Mars aggressively went on the offensive. He launched a massive national advertising blitz for M&M'S and Mars products, while simultaneously increasing the size of his candy bars without raising their prices. This initiated a brutal price-and-size war. Hershey attempted to counter by launching the first advertising campaigns in its corporate history in 1970. The ads worked beautifully, but when high commodity costs squeezed profits, the reactive Hershey board panicked and pulled the plug on the ad spend after just two years, proving unable to tolerate lower margins for long-term positioning.

Consequently, in 1973, the combined portfolio of Mars Inc. (including Snickers, Milky Way, and Three Musketeers) and M&M'S officially surpassed Hershey to become the number one candy company in America. While Hershey would temporarily reclaim the domestic lead much later, Mars established a permanent, overwhelming global dominance. Mars maintained a durable competitive advantage because Hershey's core product was a dense, expensive solid chocolate bar. Mars, by contrast, sold candy bars filled with voluminous, lower-cost ingredients like nougat and peanuts that commanded an equal perception of value from customers. When cocoa prices spiked again in the early 1980s, Mars boxed Hershey in completely by introducing even larger bars at cheaper prices, leveraging their superior cost structure to absorb the margin squeeze.

- In 1973, Mars officially overtook Hershey as the top-selling candy company in the United States. - Hershey's first-ever advertising push lasted only two years before the board canceled it due to profit pressures. - Mars holds a fundamental structural advantage because ingredients like peanuts and nougat have a far lower Cost of Goods Sold (COGS) than solid chocolate. - During an early 1980s cocoa price spike, Mars used its margin advantage to box Hershey in by offering larger bars at lower prices.

---

[02:46:55](https://www.youtube.com/watch?v=GyWJeY55x-8&t=10015s) Sophisticated Commodities Trading and Forrest's Secret Profits

Beyond product composition, Mars protected itself from market volatility by quietly building a highly sophisticated commodities trading department starting around the 1960s and 1970s. While commodity price spikes represented an existential threat to unprotected competitors like Hershey—who were not hedging their exposures effectively during the 1970s and 1980s—Mars transformed market swings into an active profit center. Because Mars is a fiercely secretive private company, they have never officially reported these figures, but deep industry rumors suggest that Mars has generated many billions of dollars in pure profit purely from its brilliant, aggressive commodity trading and hedging operations over the decades.

- Mars built a highly sophisticated commodities trading division decades before most traditional consumer packaged goods (CPG) companies handled hedging internally. - Industry insiders estimate that Mars made billions of dollars in profit directly from trading volatile raw ingredients like cocoa.

---

[02:47:53](https://www.youtube.com/watch?v=GyWJeY55x-8&t=10073s) A Surprising Retirement and the Fortress of Secrecy

Right at the pinnacle of his triumph in late 1973, Forrest Mars executed a stunning twist: he retired, packed up, and walked away from the empire he spent his lifetime building. He divided the company equally among his three children—Forrest Jr., John, and Jackie Mars—giving them each a precise one-third stake. At the time of his departure, Mars Inc. was generating a staggering $800 million in annual revenue. Concurrently with Forrest's retirement, the company entered a phase of extreme operational secrecy, completely cutting off communication with the outside world and making subsequent corporate developments trackable only through sporadic news headlines.

Forrest spent the remainder of the 1970s in quiet retirement, dedicating much of his time to caring for his aging mother, the original Ethel Mars. However, after six or seven years on the sidelines, the "feisty" entrepreneur proved he couldn't be kept out to pasture. In 1980, at the advanced age of 76, Forrest decided to get right back into the candy game, proving he was truly his father's son. He founded a brand-new specialty candy company named Ethel M Chocolates, dedicated entirely to his mother, whom he revered as the true matriarch of the family.

- Forrest Mars retired at the end of 1973, passing equal one-third shares of an $800 million company to his three children. - After his retirement, Mars Inc. became notoriously secretive, refusing to share financial statements even with their own investment bankers.

---

[02:50:24](https://www.youtube.com/watch?v=GyWJeY55x-8&t=10224s) The Ethel M Playbook and the Nevada Liquor Loopholes

Forrest’s explicit business plan for Ethel M Chocolates was to build a direct, high-end competitor to See's Candies. Recognizing that gourmet, premium chocolate was an exceptionally lucrative business, he decided to differentiate his product line by specializing in upscale, liquor-filled chocolates, which were experiencing a major trend during the "go-go 1980s." Because alcohol-infused confections were illegal in most states, Forrest identified Nevada as the regulatory epicenter for the trade and promptly relocated there to build his new venture.

In classic, unyielding Forrest Mars fashion, he built a factory in Henderson, Nevada (a suburb of Las Vegas), constructed an apartment for himself directly above the production floor, and ran the entire business from his living quarters. Despite being in his late 70s, his single-speed, hands-on playbook worked flawlessly. Within just a few years, Ethel M Chocolates grew into a massive success, pulling in $150 million in revenue. The business became so lucrative that in 1988, Forrest's children decided they wanted it under the corporate umbrella, and Mars Inc. acquired Ethel M from their father for an undisclosed sum—resulting in the ultimate comedic Koda where Forrest negotiated a massive sale to his kids, only to ultimately leave them the proceeds anyway.

- Ethel M Chocolates was founded in 1980 in Henderson, Nevada, specifically to utilize the state's legal allowance of liquor-filled chocolates. - Forrest lived in an apartment built directly above the Henderson factory floor to personally oversee daily operations. - Within a few years of its launch, the specialty chocolate startup reached $150 million in annual revenue before being acquired by Mars Inc. in 1988.

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[02:52:51](https://www.youtube.com/watch?v=GyWJeY55x-8&t=10371s) The Modern Era: Changing Narratives and Global Brand Acquisitions

Shortly after acquiring Ethel M, co-CEOs Forrest Jr. and John Mars briefly opened their doors to journalists from *The Washington Post*, granting author Joel Brenner unprecedented access to write an in-depth piece. Regretting the exposure immediately, the brothers quickly slammed the doors shut, ensuring the company never granted that level of intimate access again. Today, the modern Mars CEO does issue public statements, maintain a website, and address contemporary issues. The organization realizes that a $50 billion global enterprise cannot remain totally silent in an era focused on sustainability, or during a modern diabetes epidemic driven by the very sugary products they manufacture. However, they remain highly protective: they outright ban inside books, and their balance sheets remain completely hidden from public view.

The final decades of the 20th century saw Mars aggressively scale its product portfolio and pivot heavily into the pet care sector. They successfully localized major UK hits for American audiences and executed key acquisitions that reshaped the company's identity far beyond traditional chocolate.

- **1974:** Mars launched Skittles in the United States following its massive success in the United Kingdom, later importing Twix and Starburst (originally known as Opal Fruits in the UK). - **1986 (Pet Care Expansion):** Mars acquired Los Angeles-based Kal Kan Foods, deeply cementing its presence in the American pet market. The Kal Kan dog food brand was rebranded as Pedigree, and the cat food line became Whiskas. - **1986 (Frozen & Premium Chocolate):** Mars acquired the maker of Dove bars and Dove chocolate, establishing a highly profitable footprint in the frozen novelty space and later launching Dove Promises.

Dove, Globalization, and the 25x Compounding Story

The hosts trace the evolution of the Dove brand, explaining that it was originally strictly an ice cream bar company when Mars acquired it. Following the buyout, Mars successfully expanded the brand by launching Dove chocolate bars and chocolate pieces. While it remains a relatively modest piece of their overall empire, it serves as Mars's direct answer to Hershey, competing head-to-head with standard Hershey bars and Hershey's Kisses.

However, the definitive narrative of the brothers' tenure—alongside their sister Jackie as the third co-owner—is the massive globalization of the business. By the time the family handed operational control over to professional management in 2001, they had scaled Mars from the $800 million in revenue left behind by their father, Forrest Senior, to a staggering $20 billion. This massive 25x growth over a 28-year tenure relied heavily on pushing into international markets like Japan, China, Russia, the Middle East, and South America. To unify the brand voice during this push, Mars famously began sponsoring the Olympics in 1984, running a playbook similar to Visa by standardizing names globally so that "Snickers is Snickers everywhere."

* **Revenue Growth:** Scaled from $800 million to $20 billion over 28 years (a 25x multiple). * **Olympic Sponsorship:** Initiated in 1984 to execute a global brand-unification playbook. * **Global Footprint:** Expanded primary manufacturing and distribution into Japan, China, Russia, the Middle East, and South America.

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The 2008 Wrigley Acquisition and the Warren Buffett Formula

The discussion shifts to a landmark piece of mergers and acquisitions: Mars's buyout of the Wrigley company in 2008, heavily backed by Warren Buffett and Charlie Munger of Berkshire Hathaway. One host chuckles over Buffett’s classic humor at the time, quoting him as saying, "I've been conducting a 70-year taste test on both Mars and Wrigley and they both passed the test." Beyond the folksy charm, Buffett later dropped a highly insightful strategic nugget in his 2011 Berkshire shareholder letter, noting that "buy commodities, sell brands" has long been the ultimate formula for business success, highlighting Coca-Cola since 1886 and Wrigley since 1891.

The hosts deliberate on the mechanics of this philosophy, noting how factories taking raw inputs like cocoa beans out back and pumping branded Snickers bars out front gives companies the consumer-granted right to dictate high profit margins. The transaction itself closed in October 2008 for $23 billion—a 28% premium—right in the volatile aftermath of the Lehman Brothers collapse. Because Mars is notoriously conservative and structural changes required immense capital, they financed the $23 billion deal using a mix of their own cash, bank debt, and structured Berkshire funding.

* **Deal Total & Premium:** $23 billion purchase price representing a 28% market premium. * **Financing Breakdown:** Mars provided $11 billion of its own cash, Goldman Sachs secured $5.7 billion in bank debt, and Berkshire Hathaway provided $6.5 billion. * **Berkshire's Dual Instrument:** Consisted of a $4.4 billion loan and a $2.1 billion equity investment in the newly formed Wrigley subsidiary.

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Berkshire’s Massive Payday and the Reputational Guarantee

The hosts marvel at the astronomical returns Berkshire Hathaway generated from the Wrigley financing structure. When Mars exercised its negotiated right to buy out the debt portion early in 2013, the numbers were eye-popping. Because the $4.4 billion loan carried a staggering financial-crisis interest rate of 11.45%, Berkshire reaped $2.5 billion in interest alone over five years, plus an additional $680 million early-redemption premium paid by Mars. The equity piece yielded similar windfalls; in 2016, Mars bought out Berkshire's preferred equity stake for $4.6 billion—more than doubling Buffett's initial $2.1 billion investment, while throwing off an estimated $1 billion in dividends along the way.

A fascinating piece of analysis emerges when the hosts question why Mars took on high-interest debt and Goldman Sachs backing rather than funding it purely themselves or through a simpler arrangement. They conclude that during the dark days of October 2008, Buffett provided an invaluable "reputational guarantee and solidity." Mars lacked deep Wall Street lending relationships because they historically avoided debt-fueled buyouts. Having Buffett put his stamp of approval on the deal steadied the nerves of panicked Wrigley shareholders and allowed Mars to smoothly execute the acquisition amidst a global financial meltdown.

* **Loan Interest Rate:** Fixed at a massive 11.45% due to the 2008 macroeconomic environment. * **Debt Payoff (2013):** Berkshire received its $4.4 billion principal back, $2.5 billion in cumulative interest, and a $680 million early buyout premium. * **Equity Payoff (2016):** Mars purchased Berkshire’s preferred stake back for $4.6 billion (up from $2.1 billion), alongside an estimated $1 billion in dividends.

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Inside the High-Margin Gum Business and the Shift to Pet Hospitals

The conversation pivots to the underlying economics of chewing gum, with one host pointing out that Wrigley was an incredibly lucrative target because gum is inherently cheap to manufacture compared to chocolate. Historically, a major supplier of gum base was the tire giant Goodyear, utilizing unused petroleum byproducts. This raw material advantage allowed Wrigley to post commanding 50% gross margins and 20% net income margins in its final decade as a public entity.

The talk then steers into Mars's aggressive and quiet diversification into veterinary medicine throughout the 2000s and 2010s. Mars steadily amassed a stake in Banfield Pet Hospital, the largest chain of vet clinics in America, which originally operated inside PetSmart locations. Mars eventually bought out PetSmart's share entirely in 2015. They followed this up in 2017 by purchasing VCA, the country's largest independent vet hospital operator, for $9 billion. The hosts highlight that while running a decentralized, human-led services model is entirely outside Mars's traditional manufacturing DNA, it acts as a masterful distribution channel for high-margin prescription pet food, a business they entered back in 2002 by acquiring the French brand Royal Canin.

* **Wrigley Margins:** Historically maintained ~50% gross margins and ~20% net income margins. * **Banfield Takeover:** Initial stake taken in 2007; full 100% buyout from PetSmart finalized in 2015. * **VCA Acquisition (2017):** Purchased for $9 billion to aggregate the independent veterinary clinic space.

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Underwriting with Margin of Safety and Shooting Bullets, Not Cannonballs

Reflecting on Mars’s M&A playbook, the hosts address the criticism that Mars frequently overpays on a price-to-earnings basis, noting that Wrigley was bought at a 35x multiple and Royal Canin at a 39x multiple. They counter this criticism by quoting an investment insight: "multiples are kind of a blunt instrument used for valuation when you don't actually deeply know and understand the business." Because Mars already owned pieces of Banfield and spent decades inside the pet ecosystem, they could underwrite these assets with a far higher margin of safety than outside bidders. They describe this cautious strategy as "shooting bullets, not cannonballs"—taking small minority stakes to learn an industry before committing to an outright majority buyout.

This exact playbook was deployed with their 2020 acquisition of Kind Bar for $5 billion, following an initial minority investment a few years prior. The hosts confess surprise at Kind's massive $1.5 billion domestic revenue scale, which was achieved largely by conquering the checkout counters at Starbucks as a premium impulse buy. Mars has since utilized its massive global distribution machine to take the Kind brand international, providing a crucial long-term hedge in case global consumer trends shift permanently away from traditional sugary confections.

* **Acquisition Multiples:** Paid premium multiples of 35x for Wrigley and 39x for Royal Canin. * **Kind Bar Revenue:** Reached $1.5 billion in domestic revenue prior to Mars taking it completely global. * **Kind Bar Buyout:** Finalized for $5 billion in 2020 following an initial minority partnership.

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The Massive Kellanova Blockbuster Deal

The walkthrough of this segment concludes with the biggest move in Mars's history: its August announcement of a definitive agreement to acquire Kellanova for a historic $35.9 billion. The hosts untangle what Kellanova actually is, comparing its confusing corporate name to Mondelez (the snack spin-off of Kraft). They clarify that Kellanova represents the old Kellogg's empire, minus the traditional North American cereal business.

This multi-billion dollar acquisition spans an international footprint of massive snack brands including Pringles, Cheez-Its, Rice Krispies Treats, Pop-Tarts, Eggo, and RXBar. The hosts point out the irony that Mars will now own both Kind Bar and RXBar simultaneously. It stands as the single largest consumer packaged goods transaction since the Kraft-Heinz merger in 2015. The scale of the deal highlights the immense private wealth of the Mars family, whose enterprise value is estimated by Forbes to sit around $117 billion, generating roughly $50 billion in annual revenue.

* **Kellanova Deal Value:** $35.9 billion definitive purchase agreement. * **Kellanova Portfolio:** Includes major snack brands like Pringles, Cheez-It, Pop-Tarts, and RXBar, excluding domestic Kellogg's cereal. * **Mars Scale:** Estimated Forbes Enterprise Value of $117 billion, anchored by approximately $50 billion in annual revenue.

[03:12:23](https://www.youtube.com/watch?v=GyWJeY55x-8&t=11543s) Scaling Up to Match Nestle

Mars is poised to get significantly larger following its transformative $35.9 billion acquisition of Kellanova. Valued at $117 billion, the company is leveraging its own cash reserves alongside outside capital to fund the deal. Interestingly, Mars has begun selling investment-grade bonds to support the transaction, confirming that they are actively raising external leverage rather than entirely draining their internal cash coffers.

This massive acquisition fundamentally reshapes Mars, making it closely resemble its long-time rival, Nestle. While Mars has historically maintained a diversified portfolio, it has never matched the sheer scale or extreme diversification of Nestle, which commands over $100 billion in revenue. By absorbing Kellanova, Mars effectively scales up its infrastructure to compete more directly on that massive, multi-faceted global level.

- **Kellanova Acquisition Cost:** $35.9 billion. - **Mars Corporate Valuation:** $117 billion. - **Funding Strategy:** Utilizing a mix of internal cash and outside leverage via investment-grade bonds. - **Primary Competitor:** Nestle, which generates over $100 billion in revenue.

[03:13:25](https://www.youtube.com/watch?v=GyWJeY55x-8&t=11605s) The Secret Giant: Mars Pet Care

A core revelation of the company's modern financials is the surprising breakdown of its revenue segments. Mars generated $45 billion in revenue in 2021, $47 billion in 2022, and $50 billion in 2023, with current figures climbing past that $50 billion mark. The big "aha moment" that has been hidden from listeners all episode is that Mars Snacking—which encompasses their iconic candy portfolio—only accounts for $18 billion of that total.

In reality, Mars is predominantly a pet care company that happens to make candy. The Pet Care segment drives a staggering 59% of total revenue. Furthermore, out of the company's 140,000 global employees, nearly 100,000 work within the pet division. This structural focus makes sense historically, as Forest Mars bought the company's first dog food brand just one year after founding the UK division, and it became instantly cash-generative. While the exact profit margins comparing pet hospitals, dog food, and confectionery remain undisclosed, the top-line data and employee distribution confirm that pet care is the absolute dominant force of the enterprise. The operational shift was cemented in 2022 when Mars appointed a new CEO who advanced directly out of the Pet Care division.

- **Historical Revenue Growth:** $45B (2021), $47B (2022), $50B (2023). - **Snacking Segment Revenue:** $18 billion. - **Pet Care Revenue Share:** 59% of total revenue. - **Employee Distribution:** Out of 140,000 total employees, approximately 100,000 are in Pet Care. - **Leadership Transition:** The CEO appointed in 2022 was pulled directly from the Pet Care division.

[03:15:07](https://www.youtube.com/watch?v=GyWJeY55x-8&t=11707s) Market Share and the Veterinary Rollup

Mars has established a massive footprint in veterinary services, a sector that has recently become a favorite target for private equity and search funds. Mars owns 3,000 veterinary locations, commanding roughly 8% of the estimated 35,000 to 40,000 vet clinics in the United States. This positioning makes them the single largest player in the domestic veterinary market, surpassing other corporate veterinary and dental rollup plays.

Meanwhile, the domestic confectionery market is a strict duopoly, described as "the Hershey and Mars Show." In the United States, Mars and Hershey each control an identical 24% market share of candy and confections, leaving all other competitors trailing far behind. Internationally, the landscape is heavily fragmented. Mars remains the global "whale" with an 11% market share, followed by rivals at 7% and 5%. Even after decades of heavy industry consolidation, the top five global giants—Mars, Mondelez, Ferrero, Hershey, and Nestle—only account for one-third of the international market. The remaining two-thirds of international candy sales are held by a massive long-tail of smaller, regional companies.

- **Veterinary Footprint:** 3,000 locations out of 35,000–40,000 total US clinics (~8% market share). - **US Candy Market Share:** Mars and Hershey hold about 24% each. - **Global Candy Market Share:** Mars leads with 11%; the top five companies combined control only 33% of the international market.

[03:16:34](https://www.youtube.com/watch?v=GyWJeY55x-8&t=11794s) Analyzing Corporate Powers and Trade Secrets

Applying Hamilton Helmer’s *Seven Powers* framework reveals the underlying mechanics of Mars' sustained profitability over its competitors. While the hosts joke about continuing to perpetrate the narrative of a candy company when it is truly a pet business, they suspect the profit contributions between the two segments might actually be equal. When looking at the classic seven powers—counter-positioning, scale economies, network economies, switching costs, process power, branding, and cornered resources—scale economies emerges as the undeniable driver. Similar to software, cloud computing, or manufacturing, Mars operates with high gross margins in massive markets, allowing it to amortize its high-volume sales over a huge, fixed cost base to achieve immense operating leverage.

A friendly debate from the Acquired Slack community reframes how branding functions for Mars. Under the strict definition of brand power, a company charges a premium price for a branded product over an identical unbranded one. While Mars does not necessarily charge more for a Snickers bar compared to a competitor, its brand power manifests in massive, recurring volume. Consumers consistently choose a trusted Snickers over an unknown, untrusted alternative. This dynamic mirrors a "scale economy shared" model where brand loyalty rewards the company in total lifetime margin dollars rather than a higher upfront margin percentage.

- **The Seven Powers:** Counter-positioning, scale economies, network economies, switching costs, process power, branding, and cornered resources. - **The Scale Economy Advantage:** High gross margins coupled with huge volume allow Mars to easily absorb fixed manufacturing bases. - **The Trade Secret Strategy:** Historically, Forest Mars refused to patent manufacturing equipment innovations, choosing to keep them as trade secrets so he would not tip off competitors.

[03:21:12](https://www.youtube.com/watch?v=GyWJeY55x-8&t=12072s) Switching Costs and the Playbook of Durable Marketing

The primary power driving the dominant pet care side of the business is switching costs. Pet food and veterinary care inherit automatic friction because changing a pet's long-term diet is a calculated process that can cause severe digestive disruptions. "If your dog doesn't have problems with its current food, you're never changing to another food." This reality provides Mars with a stickiness that normal human food brands rarely enjoy.

Moving into the strategic playbook, Mars proves that a multi-billion-dollar business can be sustained through exceptional marketing rather than relying solely on product innovation. While tech companies like Meta scale via product engineering, the candy industry relies heavily on narrative, emotional associations, and nostalgia. Once a confectionery brand cements its place in the culture, it becomes nearly impossible to kill. Despite decades of corporate fumbles, a chocolate bar in America is still fundamentally defined as a Hershey bar. Mars executes a highly sophisticated, Disney-like playbook by aligning its products with universal cultural keystones, anchoring its brands into the collective American consciousness.

- **Pet Care Switching Costs:** Driven by pet owner risk-aversion and animal digestive consistency. - **Confectionery Brand Longevity:** Established candy brands behave like luxury goods; their cultural legacy makes them highly resilient to corporate mistakes. - **Global Branding Alignment:** Mars intentionally ties its products to premier cultural assets, including the NFL, the Olympic Games, the Rolling Stones, and NASA space shuttle menus.

[03:23:01](https://www.youtube.com/watch?v=GyWJeY55x-8&t=12181s) The E.T. Blunder and the Power of Cultural Franchises

A legendary piece of marketing history highlights a rare misstep for Mars: the production of Steven Spielberg's *E.T. the Extra-Terrestrial* in the late 1970s and early 1980s. The original script explicitly called for E.T. to be lured into a home using a trail of M&M's. However, Mars passed on the opportunity because the movie studio demanded a guaranteed million dollars in co-marketing, trade promotions, and displays featuring the alien. Mars resisted pairing its corporate M&M's characters with the movie and walked away. Hershey leadership also came incredibly close to passing on the deal, but an executive aggressively intervened, pledging a million dollars from their existing budget to secure the placement for Reese's Pieces.

The resulting product placement set a massive new industry paradigm, instantly tripling the sales of Reese's Pieces upon the movie's release. Although Reese's Pieces never ultimately dethroned M&M's as a primary market leader, the movie deal secured them a permanent, highly lucrative legacy as a mainstay at cinema concession stands. While the hosts debate whether M&M's simply succeeded long-term because it is a superior product, they agree that Mars' broader marketing genius remains undeniable. Mars has historically embraced cutting-edge advertising technology, introducing its iconic computer-generated 3D M&M's characters in 1994—just one year after *Jurassic Park* pioneered the technology in cinema.

- **The E.T. Deal Requirement:** A $1 million commitment to co-marketing and consumer trade promotions. - **Financial Consequence for Hershey:** Tripled the sales of Reese's Pieces short-term and secured permanent placement in movie theaters. - **Advertising Agility:** Mars launched its 3D animated M&M's characters in 1994, directly capitalizing on the digital effects breakthrough of 1993.

[03:28:32](https://www.youtube.com/watch?v=GyWJeY55x-8&t=12512s) The Blue M&M Genius

The ultimate testament to Mars' ability to manufacture national attention out of thin air occurred in 1995 when the company decided to retire the plain tan M&M. Recognizing that the brand needed to "spice it up" because the existing color lineup had grown boring, Mars launched a massive, coordinated public vote to let millions of Americans choose the replacement color.

The democratic marketing campaign culminated in blue winning the vote. The hosts highlight this move as an act of absolute corporate genius. It cost Mars virtually nothing to alter a food dye color, and it had zero functional impact on the manufacturing economics of the product. Yet, by turning a trivial manufacturing adjustment into a nationwide interactive event, Mars managed to get millions of consumers deeply and emotionally invested in their candy brand.

The Art of Candy Marketing and Constant Rebalancing

The conversation kicks off with a lighthearted realization about corporate marketing hotlines. One of the hosts admits to calling "1-800-FUN-COLOR" just yesterday, only to find out it is no longer in service. This line was originally used for a massive public campaign where people could vote on new M&M colors. When blue famously won and replaced tan, the company even lit up the Empire State Building in blue. The hosts compare this masterful marketing tactic to Facebook's internationalization strategy, where tapping into local crowds to translate the platform gave users a deep sense of psychological ownership over the product.

Beyond public voting stunts, Mars employs a continuous, quieter marketing and product adjustment strategy. The hosts reveal that Mars is constantly rebalancing the ratios of colors inside M&M bags to suit evolving consumer tastes. While the exact ratios remain a closely guarded corporate secret, the sheer thought of someone trying to manually count them brings a laugh, highlighting how meticulously Mars manages its iconic brands behind the scenes.

- **The Blue M&M Campaign:** Replaced the original tan color after a massive public voting campaign via a 1-800 number; celebrated by lighting up the Empire State Building in blue. - **Color Ratios:** Mars continuously updates the secret ratio of colors in every M&M bag to align with shifting modern preferences.

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A Recession-Proof, Habitual, and Universal Business

The discussion shifts toward the ideal characteristics of an unstoppable enterprise, specifically looking at how Mars built a bulletproof portfolio. While the hosts initially viewed candy as the ultimate recession-proof business, deeper research revealed that pet food shares the exact same quality. During the 2008 financial crisis, neither the candy nor the pet care divisions of Mars took a hit. In the modern era, where pets are widely treated as core family members, people will refuse to stop feeding their animals just as they refuse to stop buying affordable sweet treats when times get tough.

The universal appeal of candy is backed by staggering data from the Food Institute. The hosts point out that sugar operates much like the addictive habits they uncovered in their previous Starbucks episode, though they jokingly admit that sugar feels far worse for the body. Having sat in the studio eating M&M's and Snickers for five and a half hours, they confess to feeling "pretty crappy" from exceeding the recommended sugar intake. This reality explains why Mars is actively diversifying into healthier brands like Kind and Nature's Bakery. Yet, even with the modern rise of weight-loss drugs like Ozempic, chocolate revenues remain at an all-time high, proving the core business is going nowhere.

- **Recession-Proof Performance:** Neither the pet food nor candy segments suffered revenue losses during the 2008 economic downturn. - **Household Penetration:** According to the Food Institute, 98% of households buy candy every year. - **Purchase Frequency:** Of those households, 97% are recurring buyers who purchase candy an average of 35 times a year. - **Diversification Strategy:** Mars is actively hedging against health trends and sugar critiques by acquiring healthier alternative brands like Kind and Nature's Bakery (Kenova).

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The Complex Alchemy of Chocolate and the Climate Threat

Transitioning into broader playbook concepts, the hosts profess their shared, deep love for chocolate, reflecting on how it truly stands apart from ordinary candy. Referencing Milton Hershey’s historic realization when he abandoned the caramel business, they agree that "caramels is a fat but chocolate is a complete food." Chocolate is one of the most complex, rich foods on earth, meaning its risk of disruption from health trends like Ozempic is far lower than that of simple gummy candies. However, the industry is currently facing an existential threat that most everyday consumers know absolutely nothing about: the severe first- and second-order effects of climate change.

The cacao tree is a bizarre, incredibly sensitive plant whose football-sized fruit pods grow directly out of the main tree trunk rather than on branches. It possesses an exceptionally long lead time, taking years to mature, and can only produce usable fruit for about 25 years of its century-long lifespan. Because these trees thrive only within an incredibly narrow climate and temperature band, global warming has severely disrupted production. The industry's second-order response has been a massive push toward genetic engineering and hybridization to optimize for tree resiliency. Unfortunately, this optimization has ignored taste, causing the actual flavor profile of global chocolate to fundamentally change and lose its historic richness over the last few years.

- **Milton Hershey's Philosophy:** Switched focus entirely from caramels to chocolate because he viewed chocolate as a "complete food." - **Cacao Tree Biology:** Features pods growing directly on the trunk; possesses a 100+ year lifespan but only produces viable fruit for roughly 25 years. - **The Flavor Crisis:** Genetic engineering to counter climate change has prioritized crop yield and climate resilience over preserving traditional taste, threatening to water down the thousands-of-years-old complexity of chocolate.

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Mastering the Conglomerate Muscle and 100 Years of Growth

The conversation turns to the operational mastery of Mars as a diversified conglomerate. From its earliest days, the company learned how to execute acquisitions beautifully by understanding a crucial balance: centralizing very few components while decentralizing almost everything else. Because Mars was forced to operate two completely distinct businesses in entirely different geographies during its first five years, it naturally developed the internal muscle to manage a split empire. The hosts compare Mars to the luxury powerhouse LVMH, operating as a strict "buy and hold" institution rather than a ruthless private equity firm.

This long-term holding strategy is reflected in their remarkable corporate duration. Over the last century, Mars has managed to grow its revenue at a compounding annual rate that seems almost impossible for a business of its scale. This century of dominance was unlocked by a perfect storm of global applicability, a pristine margin structure that transforms raw commodities into high-value brands, immense operational efficiency, and a recurring, habitual purchase cycle. By establishing and maintaining the number-one market share position across multiple decades, Mars has cemented itself as a legendary case study in corporate execution.

- **Acquisition Strategy:** Mars acts as a buy-and-hold conglomerate, completing around 30 acquisitions since the 1990s while selling off only two properties since 2015. - **Brand Preservation:** In Bernard Arnault/LVMH style, Mars retains original brand identities post-acquisition, keeping veterinary chains like VCA and Banfield completely separate rather than unifying them under a single corporate banner. - **Centennial Growth:** Mars has grown its revenue at a staggering compound annual growth rate (CAGR) of 14% for a full century.

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The Quintessence: Forrest Mars Sr. and Path Dependency

The hosts introduce a new closing segment called "The Quintessence," designed to isolate the single biggest takeaway that they cannot stop thinking about. First and foremost, they highlight the company's enigmatic architect, Forrest Mars Sr., calling him a "freaking G" who deserves to be ranked alongside legendary American titans like Sam Walton and Henry Ford. Because Mars has remained fiercely private, his genius is largely obscured from the public eye. Forrest ran the company with a radical, hyper-scientific approach long before his peers, pioneering concepts like open-office layouts, maximizing equipment yields, adopting early television advertising, and executing sophisticated target-market research to salvage struggling products like M&M's.

This brings them to the ultimate realization of the episode: the extreme path dependency of the Mars corporate empire. The hosts argue that it would be fundamentally impossible to recreate Mars today using the same playbook. Forrest's success required a highly specific alignment of historical variables, personal chips on his shoulder, and luck. He needed the wealth and subsequent inheritance from his father to attend Yale, which uniquely exposed him to the DuPont family's industrial methods. He then operated as an aggressive American capitalist competing against traditional, Quaker-inspired British candy makers right at the dawn of grocery stores, mass mechanization, and television commercials. The lesson for modern founders is clear: you cannot copy the past; you have to build something entirely original for your own time.

- **Forrest Mars Sr.'s Innovations:** Implemented open offices, scientific operations management, early television ad adoption, and rigorous consumer market research way ahead of his time. - **Path Dependencies:** Key historical anchors included Forrest's Ivy League education at Yale, exposure to DuPont methodologies, and the mid-century rise of automated supermarkets and commercial broadcast television.

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High School Billions and the Craft Chocolate Movement

Before moving into their traditional "carve-outs" section, the hosts swap a jaw-dropping piece of industry trivia regarding the Hershey trust. The trust is legally mandated to fund the Milton Hershey School, which originally opened as an orphanage and now serves low-income and disadvantaged students. The hosts reveal that the school's endowment has ballooned to a mind-boggling \$17.4 billion. With only 2,200 students currently enrolled, the school boasts the highest endowment-dollars-per-student ratio of any educational institution on earth. The primary shareholder of the Hershey corporation is literally a school that secures so much cash it fundamentally struggles to spend its required annual budget.

The episode winds down with personal recommendations, starting with a shared love for Dandelion Chocolate, a prominent player in the "bean-to-bar" craft chocolate movement. Dandelion bypasses mass commodity beans in favor of single-origin sourcing, meticulously sorting and processing them in a way that mirrors the high-end wine industry. One of the hosts shares how he purchased a luxurious double-sized Dandelion Advent calendar for himself and his wife, describing it as the greatest ever created—akin to "if Hermès made an advent calendar" where every single day's slot doubles as a beautifully crafted Christmas tree ornament featuring collaborations with elite global chocolatiers.

- **Milton Hershey School Endowment:** Stands at \$17.4 billion for a student body of just 2,200 children, resulting in an unparalleled concentration of wealth per pupil. - **Dandelion Chocolate:** A craft bean-to-bar chocolate maker praised for its single-origin sourcing, factory tours, and high-end artistic holiday collaborations. - **The Tesla Flat:** The final anecdote cuts off just as a host begins describing finding a flat tire on his Tesla Model Y caused by a stray bolt.

[03:45:38](https://www.youtube.com/watch?v=GyWJeY55x-8&t=13538s) The Ultimate Car Service Experience and "Silo" Season 2

One of the hosts shares a glowing personal anecdote about Tesla's customer service, recalling how he opened up the Tesla app after a tire issue and had a service technician at his house within 90 minutes. The technician removed the wheel, loaded it into a truck, and left a temporary wheel so the host was good to go immediately. Two days later, they returned to his house, repaired the original tire, pumped it back up, swapped the wheels back, and completed the entire process without the host having to do anything—all for about $120. He describes it enthusiastically as "the best car service experience I've ever had in my life." The co-host agrees, remarking on how wildly different Tesla is from traditional car companies, prompting the declaration that "the model Y is the best family vehicle ever created by mankind," comparing its cultural and industrial impact to the Model T of their generation.

Shifting to entertainment picks, the hosts discuss the arrival of *Silo* Season 2 on Apple TV. While one host admits he hasn't watched the new season yet because he read the original book *Wool* by Hugh Howey, he validates its excellence. They note that while many shows suffer from a sophomore slump and have a hard time maintaining their season one momentum, *Silo* handles it seamlessly. They also briefly reminisce about getting to meet the author, Hugh, in the past, describing him as a great guy.

- **Tesla Service Turnaround:** Service arrived in 90 minutes; the completed repair and wheel swap took 2 days. - **Cost of Tesla Repair:** Approximately $120. - **Book Reference:** The show *Silo* is based on the book *Wool* by Hugh Howey.

[03:47:01](https://www.youtube.com/watch?v=GyWJeY55x-8&t=13621s) A New Appreciation for "Home Alone" and a Holiday Flight Turnaround

The conversation transitions to a nostalgic holiday pick: the movie *Home Alone*. One host confesses that it was his absolute favorite movie growing up, having watched it in theaters when it first came out, noting that he and Macaulay Culkin are roughly the same age. However, after enduring some hectic Thanksgiving holiday travel this year, he views the film through an entirely new lens. "I have a whole new appreciation for that movie, which is the perspective of the parents," he notes. While he joke-clarifies that he didn't actually leave a kid behind, he laughs that he now completely understands exactly how it could happen, making him excited to rewatch it from the parents' perspective.

This leads into a story about a grueling 5.5-hour flight from San Francisco (SFO) to Philadelphia the day before Thanksgiving to visit family in Pennsylvania. Describing the flight as a parent's "lowest of the lows" nightmare where you feel desperately sorry for everyone around you, the host explains that his three-year-old daughter was causing a ruckus and kicking the seat of the man in front of her for the entire flight. Upon landing, the host braced for the worst as the gentleman in front turned around. Instead of a confrontation, the man asked, "Are you David from Acquired?" Shocked, the host apologized, only for the man to joyfully reply that he had been listening to the show the whole flight. Suddenly, multiple other passengers in the surrounding rows popped up to share that *Acquired* was their favorite podcast or that they were listening to it right then. What began as a stressful parenting low turned into a profoundly wonderful memory.

- **Flight Details:** SFO to Philadelphia, a 5.5-hour duration, taking place the day before Thanksgiving. - **Daughter's Age:** 3 years old.

[03:49:32](https://www.youtube.com/watch?v=GyWJeY55x-8&t=13772s) Sponsor Thanks, Chocolate Trivia, and Final Credits

The hosts begin wrapping up the episode by thanking their main sponsors: JP Morgan Payments, Crusoe, and Statzig. They give a special shout-out to Arvind Navaratnam at Worldly Partners for his exceptional write-up on the Mars company, noting that it contains far more data, charts, and historical industry stats on chocolate and sugar consumption than they could cover on air. They also extend their gratitude to Todd and Clara Shen at Dandelion Chocolate, as well as Gary Guitard from Guitard Chocolate. They point out that many listeners have likely eaten Guitard chocolate without realizing it, as they supply chocolate to major brands, including See's Candies.

This sparks a quick historical trivia game regarding American chocolate producers. Before Milton Hershey started making chocolate in 1900, there were three older dark chocolate producers in America that are still operating today. The host correctly identifies Ghirardelli and Guitard in San Francisco, but misses the third: Walter Baker's in Massachusetts, whom they dub the "Godfather of chocolate in the US." They marvel at how two major chocolate manufacturers managed to pop up in San Francisco during the 1800s, capitalizing on the local climate before the invention of air conditioning.

Finally, they offer a massive thank you to Joël Glenn Brenner, author of *The Emperors of Chocolate* and the only journalist to ever get inside access to Mars. They praise the book as a total page-turner and a true classic among business histories, thanking Joël personally for chatting with them during their research. To close out the program, they direct listeners to companion episodes on conglomerates like LVMH, Sony, and Berkshire Hathaway, a manufacturing deep-dive on Novo Nordisk, or their recent ACQ2 interview with ARM Holdings CEO Rene Haas. They invite the community to chat on their Slack channel before wishing everyone a happy holidays as the *Acquired* theme music fades in.

- **Historical Chocolate Producers (Pre-1900):** Guitard (San Francisco), Ghirardelli (San Francisco), and Walter Baker's (Massachusetts). - **Book Recommendation:** *The Emperors of Chocolate* by Joël Glenn Brenner. - **Community Link:** acquired.fm/slack

## Notable quotes > [42:08](https://www.youtube.com/watch?v=GyWJeY55x-8&t=2528s) I'll be damned if a short time after our lunch the old man has a candy bar and it's a chocolate malted drink... he put some caramel on top of it and some chocolate around it... and that damn thing sold. — Forest Mars

> [53:13](https://www.youtube.com/watch?v=GyWJeY55x-8&t=3193s) the hell with running some mines in the Backwoods — Forest Mars

> [01:08:03](https://www.youtube.com/watch?v=GyWJeY55x-8&t=4083s) we're making enough money we have an airplane we've got the fishing place we've got horses why do we need anymore — Frank Mars

> [01:08:03](https://www.youtube.com/watch?v=GyWJeY55x-8&t=4083s) I want to conquer the whole goddamn world. — Forest Mars

> [01:14:50](https://www.youtube.com/watch?v=GyWJeY55x-8&t=4490s) you aren't going to hire anybody to make a product for you to make you rich. They'll only make it for themselves — Forest Mars

> [01:24:22](https://www.youtube.com/watch?v=GyWJeY55x-8&t=5062s) I'm a religious man... I pray for Milky Way, I pray for Snickers, I pray for M&M's! — Forest Mars

> [01:24:22](https://www.youtube.com/watch?v=GyWJeY55x-8&t=5062s) I'm not a candy maker. I'm empire-minded. — Forest Mars

> [01:57:29](https://www.youtube.com/watch?v=GyWJeY55x-8&t=7049s) The milk chocolate that melts in your mouth, not in your hand.

> [01:57:29](https://www.youtube.com/watch?v=GyWJeY55x-8&t=7049s) one great TV campaign could shift Decades of Customer Loyalty in a matter of weeks, — Deborah Cadbury

> [02:31:16](https://www.youtube.com/watch?v=GyWJeY55x-8&t=9076s) anyone who's serious about software should make their own Hardware — Alan Kay

> [04:20:54](https://www.youtube.com/watch?v=GyWJeY55x-8&t=15654s) I've been conducting a 70-year taste test on both Mars and Wrigley and they both passed the test. — Warren Buffett

> [04:20:54](https://www.youtube.com/watch?v=GyWJeY55x-8&t=15654s) buy commodities, sell brands — Warren Buffett

> [03:21:12](https://www.youtube.com/watch?v=GyWJeY55x-8&t=12072s) If your dog doesn't have problems with its current food, you're never changing to another food.

> [03:28:32](https://www.youtube.com/watch?v=GyWJeY55x-8&t=12512s) caramels is a fat but chocolate is a complete food — Milton Hershey

## Mentioned Ben Gilbert, David Rosenthal, M&M's, Snickers, Mars Incorporated, LVMH, Walmart, Costco, Ikea, Ben's Original, Kind bars, The Coca-Cola Company, ACQ2, Rene Haas, ARM Holdings, Synopsis, Ctie, Ray-Ban Metas, JP Morgan Payments, Frank Clarence Mars, Joel Glenn Brenner, The Emperors of Chocolate, The Washington Post, Elva Mars, Ethel Kissack, Forrest Mars, Ethel Mars, Milton Hershey, Colombian Exposition, Nestlé, Moctezuma, Todd Masonis, Dandelion Chocolate, Rudolph Lindt, Henri Nestlé, Daniel Peter, Hermès, Birkin bag, Cadbury, Chocolate Wars, Deborah Cadbury, Schabach, Standard Oil, Rockefellers, Carnegies, Vanderbilts, Patricia Mars, Marrow Bar, Milky Way, Three Musketeers, Mars Bar, Camel cigarettes, University of California, Berkeley, Yale University, Pierre S. du Pont, DuPont, General Motors, Austin Company, Henry Ford, William Wrigley Jr. Company, Jean Tobler, Toblerone, Rowntree's, Chapel Brothers, Chappies, Cruso, T.G. Rose, John Malone, John Mars, Forest Mars Jr., IKEA, Meta, StatSig, OpenAI, Figma, Vercel, Notion, Bluesky, X, William Murray, H.B. Reese, Bruce Murray, M&M Limited, Smarties, George Harris, Chappel Brothers, Uncle Ben's Rice, Ted Bates & Company, Procter & Gamble, The Mickey Mouse Club, Howdy Doody, Hersheyettes, Reese's Pieces, Vend Pack, Frank Mars, Elon Musk, Twitter, James, Alan Kay, William Murrie, Ethel M Chocolates, See's Candies, Joel Brenner, Skittles, Twix, Starburst, Opal Fruits, Kal Kan Foods, Dove, Jackie Mars, Visa, Wrigley, Warren Buffett, Charlie Munger, Berkshire Hathaway, Coca-Cola, Goldman Sachs, Lehman Brothers, Goodyear, PetSmart, Royal Canin, Kind Bar, Starbucks, Kellanova, Mondelez, Kellogg's, Pringles, Cheez-Its, Rice Krispies Treats, Pop-Tarts, Eggo, RXBar, Kraft-Heinz, Forbes, Nestle, Ferrero, Hamilton Helmer, Acquired Slack community, Double Mint, Ben’s Rice, Pedigree, Whiskas, VCA, Banfield, Disney, NFL, Olympic Games, Rolling Stones, NASA, Steven Spielberg, E.T. the Extra-Terrestrial, Jurassic Park, Empire State Building, Facebook, Food Institute, Nature's Bakery, Ozempic, Bernard Arnault, Forrest Mars Sr., Sam Walton, Milton Hershey School, Macaulay Culkin, Hugh Howey, Wool, Apple TV, Crusoe, Statzig, Todd Shen, Clara Shen, Gary Guitard, Guitard Chocolate, Ghirardelli, Walter Baker's, Joël Glenn Brenner, Sony, Novo Nordisk

[Source](https://www.youtube.com/watch?v=GyWJeY55x-8)

中文简报

玛氏发力零售与宠物医疗业务，缔造500亿美元商业帝国行事隐秘的玛氏家族将糖果视为低销售成本的冲动型消费品，并积极多元化进军高利润的宠物医疗护理领域，从而在竞争中胜过好时，积累起全美第二大财富。本期节目深入探讨了玛氏公司（Mars, Inc.）的跨代发展历程，梳理了其从弗兰克·玛氏（Frank Mars）早期的制糖坎坷创业与Milky Way巧克力棒的突破性问世，到其子老福雷斯特·玛氏（Forrest Mars Sr.）主导下极具竞争性与帝国雄心的扩张历程。节目详细拆解了铸就玛氏企业文化的经营哲学，包括对产品品质的执念、对极致运营效率的追求，以及对私有制和极度保密的严格坚守。此外，叙述还详述了玛氏与好时（Hershey）历史悠久的市场竞争、成熟精巧的大宗商品交易，以及其向全球品牌收购、通过箭牌（Wrigley）布局高利润口香糖业务和大规模整合宠物医院的现代战略转型。玛氏公司完全由玛氏家族私人持有，是全美前五大私营企业之一，年营收超过500亿美元。 (1:45) 在经历前三次糖果创业失败或破产后，弗兰克·玛氏于1920年在明尼阿波利斯创立了他的第四家糖果公司，该公司最终发展成为玛氏公司。 (8:18) 1879年之后固体牛奶巧克力消费市场的巨大扩张，在历史上是由鲁道夫·莲（Rudolph Lindt）发现精炼工艺以及亨利·雀巢（Henri Nestlé）发明奶粉所共同开启的。 (19:39) 于1924年推出的Milky Way开创了将麦芽奶昔风味融入巧克力棒的理念，并通过引入早期工厂自动化生产规格统一的糖果块，迅速实现了财务规模化。 (42:08) 福雷斯特·玛氏利用奥斯汀公司（Austin Company）的流水线工程技术构建了玛氏的工业化运营体系，使芝加哥工厂能够全天候24小时运转生产线，并在大萧条期间迅速扩大了产能规模。 (58:23)

Reading summary

Acquired hosts Ben Gilbert and David Rosenthal argue that Mars Inc. scaled into a $50 billion global giant by combining relentless operational discipline and brand building with private ownership, ultimately transforming from a confectionery maker into a pet care conglomerate. Industrial Efficiency and the Hershey Rivalry (58:23) Frank Mars achieved initial success with the Milky Way bar in the 1920s, but his estranged son Forrest Mars transformed the business into an industrial powerhouse. Forrest applied Ford-style continuous assembly lines designed by the Austin Company to run around the clock, driving Chicago factory output to 20 million Milky Way bars by 1929. In this era, Mars functioned primarily as a combination candy bar maker, relying on Hershey as an industrial wholesaler for its liquid chocolate base. While Hershey dominated the market as both a direct consumer brand and raw supplier, it eventually lapsed into a decades-long period without marketing or advertising departments under trust ownership. Forrest capitalized on this inertia after gaining full ownership of Mars Inc. in 1964. By aggressively buying national television advertising, expanding bar sizes without increasing prices, and relying on cheaper fillings like nougat and peanuts to insulate margins from volatile cocoa prices, Mars officially surpassed Hershey as America's top candy maker by 1973. M&M's and the Playbook of Brand Control (107:40) After a bitter 1932 falling out with his father, Forrest moved to England, developed the Mars Bar with chocolate sourced from Cadbury, and studied European candy techniques. He brought back the concept of "dragee"—hard-panned sugar-shell chocolate that resisted melting—and launched M&M's in the United States in partnership with Hershey executive Bruce Murrie. During World War II, M&M's built scale by selling exclusively to the military, led by the Air Force. When post-war civilian sales stalled, Forrest bought out Murrie's 20% stake for $1 million in 1949 and executed an aggressive marketing pivot. By sponsoring children's shows like The Mickey Mouse Club and Howdy Doody, printing a trademark 'M' on every candy piece to counter copycats, and animating 3D brand mascots, Mars converted M&M's into America's best-selling candy by 1956, exceeding $40 million in annual sales. Radical Internal Culture and Extreme Privacy The operational foundation of Mars was forged in Slough, England, through Forrest's management philosophy, later codified as the company's Five Principles. To drive extreme personal responsibility while eschewing micromanagement, Forrest compensated employees well above market benchmarks—historically paying three to four times prevailing wages, accompanied by performance bonuses tied to corporate goals. Mars also pioneered open-office layouts, required all employees to punch time clocks with strict punctuality incentives, and focused on Return on Assets rather than short-term quarterly profit. Underpinning this structure was the principle of Freedom, which manifested as complete private family ownership and severe secrecy. Mars avoided public capital markets and external debt. Following Forrest's retirement in 1973—when he split the $800 million company equally among his three children—the family actively shielded executive leadership from public scrutiny, even buying the rights to unauthorized photographs taken by journalists to suppress outside exposure. The Quiet Transformation into Pet Care (193:25) Although widely recognized for confections, Mars is structurally a pet care enterprise that happens to produce candy. Forrest initially diversified into pet food in England around 1934–1935 to establish reliable cash flows. By 2023, Mars generated approximately $50 billion in total annual revenue, but its snacking division accounted for just $18 billion. The Pet Care division generated 59% of corporate revenue and employed nearly 100,000 of the company's 140,000 global personnel. Mars fortified this segment by integrating consumer goods with veterinary healthcare infrastructure. After acquiring the French clinical nutrition brand Royal Canin in 2002, Mars purchased Banfield Pet Hospital out of PetSmart in 2015 and bought independent clinic operator VCA for $9 billion in 2017. These clinics provide direct, captured distribution networks for high-margin prescription pet foods, creating a durable services ecosystem alongside its branded packaged goods. Portfolio Expansion to Wrigley and Kellanova Mars has deployed large-scale acquisitions to dominate related high-margin impulse-purchase categories. In 2008, Mars partnered with Berkshire Hathaway to acquire chewing gum giant Wrigley for $23 billion. The transaction capitalized on gum's low manufacturing costs, which historically yielded 50% gross margins and 20% net margins. Mars financed the buyout using $11 billion of internal cash alongside structured debt. In August 2024, Mars announced a definitive agreement to acquire Kellanova for $35.9 billion. The transaction incorporates global snack staples including Pringles, Cheez-It, Pop-Tarts, and RXBar, standing as the largest consumer packaged goods transaction since Kraft merged with Heinz in 2015. With Forbes estimating Mars's enterprise value at $117 billion, the acquisition cements its scale advantages across supermarket shelf space. The hosts conclude that Mars's empire is the result of extreme historical path dependency—requiring an idiosyncratic mix of Forrest Mars Sr.'s industrial engineering background, private capital accumulation, and early advertising adoption—which cannot be replicated today. Simultaneously, the broader chocolate industry faces severe long-term headwinds as climate change disrupts the delicate, narrow cultivation zones of cocoa trees.

精炼阅读摘要

Acquired 节目梳理了玛氏（Mars Inc.）从家族糖果作坊崛起为全球消费品巨头的历程，指出其成功核心源于 Forrest Mars Sr. 推动的工业规模化、激进营销，以及依托绝对家族控股所形成的超长期战略自由度；然而现代玛氏的真正支柱已从糖果转向利润丰厚、占比近六成的宠物护理业务。父子裂变与工业化扩张的奠基 (58:23) 玛氏糖果帝国的根基建立在弗兰克·玛氏（Frank Mars）与儿子福雷斯特·玛氏（Forrest Mars Sr.）复杂的合作与断裂之上。弗兰克早年经历多次创业破产，直到1920年代推出 Milky Way（银河棒）才实现商业突破。随后加入公司的 Forrest 展现出强烈的工业野心，他引入设计福特流水线的 Austin Company 规划芝加哥新厂，坚持工厂全天候运转以压低边际成本。到1929年，该厂年产 Milky Way 达2000万根。值得注意的是，早期玛氏并不自产纯巧克力，而是大量从 Hershey 批发采购，成为 Hershey 最大的代工客户。 1932年，父子在扩张理念上爆发不可调和的矛盾：Frank 满足于现有财富，而 Forrest 坚持全球扩张。在索要三分之一表决权遭拒后，Forrest 远赴英国独立创业。他在斯劳（Slough）建立工厂推出 Mars Bar，并与当地巨头 Cadbury 合作供应液体巧克力涂层。凭借适应英国口味的改良和极高效率，Mars UK 仅用五年便跃升为英国第三大糖果商。1935年前后，Forrest 敏锐地切入宠物食品业务，迅速实现盈利并为糖果业务提供了关键现金流支撑。 M&M's 的崛起与本土控制权收复 (107:40) 1939年 Forrest 返回美国，但被继母阻拦在芝加哥玛氏管理层之外。他旋即利用在欧洲观察到的糖衣包裹工艺（dragee）开辟新战线。为了解决原料配额与供应链问题，他亲自前往 Hershey 与其实际操盘者 William Murrie 达成合作，创立了 M&M Limited，并在二战期间通过军方采购合同为美军大量供货。战后民用推广初期，M&M's 遭遇销售瓶颈，Forrest 在1949年通过办公室冲突将合作方 Bruce Murrie 排挤出局，以100万美元回购其20%股权实现全资控股。随后，Forrest 启动了面向儿童和家庭的饱和式电视广告投放，赞助热门节目并推出拟人化动画形象；1954年，公司开始在糖粒表面印上标志性的白色“M”字母以确立正品认知。到1956年，M&M's 年销售额突破4000万美元，跃居全美销量第一。随着自身规模激增，Forrest 抓住芝加哥原玛氏公司业绩滑坡、年收入降至4000万美元的危机，于1963年至1964年间斥巨资完全由个人出资买下家族各方股份，彻底完成了全球玛氏帝国的统一整合。与 Hershey 的规模型竞争与绝对私有制 (163:54) 在与传统巧克力霸主 Hershey 的竞争中，玛氏展现了现代规模经济与敏锐的战略定力。Hershey 在创始人去世后长期坚持不设营销部门的传统，陷入长达数十年的战略僵化。玛氏则抓住电视普及和超市精简货架 SKU 的零售变革契机，展开了激进的广告战与“增量不加价”的尺寸战。加之玛氏产品多以牛轧糖、花生等低成本体积原料为主，相较于纯巧克力的 Hershey 具备更强的原料成本抗风险能力。1973年，玛氏全美糖果份额正式超越 Hershey 夺冠，当时公司年营收已达8亿美元。在登顶之际，Forrest 于1973年底出人意料地退休，将资产均分给三名子女，并确立了沿用至今的五大原则。其中核心原则“自由”演化为对私有化架构与家族隐秘性的绝对坚守：玛氏坚决不上市、极力避免借债，以此规避公开市场的短期财报压力。这种架构允许公司以总资产回报率（ROA）为导向进行长周期跨年投资。家族甚至曾花2万美元买断外媒拍摄的照片版权以维持隐匿，直至今日其完整资产负债表仍不对外披露。现代版图：宠物护理与跨界并购隐形帝国 (193:25) 步入现代，玛氏通过数起超大型跨界并购彻底重构了商业体量。2008年，在沃伦·巴菲特与伯克希尔·哈撒韦的资金支持下，玛氏以230亿美元（溢价28%）收购箭牌口香糖（Wrigley），借此获得了毛利率约50%、净利率约20%的极高利润产品线。2024年8月，玛氏进一步宣布斥资359亿美元收购拥有 Pringles、Cheez-It 等品牌的 Kellanova，达成自2015年卡夫亨氏合并以来快消领域最大的并购案，推动其福布斯预估企业价值升至1170亿美元左右。最为反直觉的事实是，今日的玛氏本质上是一家披着糖果外衣的宠物医疗与护理公司。2023年公司总营收达500亿美元，而包含全部糖果产品的零食部门仅贡献180亿美元；宠物护理部门则占据总收入的59%，在全球14万员工中雇用了近10万人。通过先后收购法国皇家宠物食品（Royal Canin）、美国最大连锁宠物医院 Banfield 以及独立兽医诊所巨头 VCA，玛氏建立了以宠物医院网络驱动高毛利处方粮分销的闭环体系，并在2022年选任了来自宠物护理部门的首席执行官。回顾玛氏的发展轨迹，节目总结认为其崛起具有极强的“路径依赖”，在当今商业环境下几乎无法复刻。虽然玛氏凭借规模经济与强势品牌铸就了极深的护城河，但面对全球气候变暖对可可树苛刻种植条件的破坏、树种杂交改良对风味的削弱，以及现代社会对糖分消费健康风险的审视，这间庞大且神秘的快消帝国仍面临长期的原料与产业适应性考验。

Detailed notes — zh

## Background 本期内容由知名商业播客《Acquired》（主持人 Ben Gilbert 与 David Rosenthal）于 2024 年 12 月 16 日发布在 YouTube 平台。节目深入聚焦全美第二富有且极为隐秘的玛氏家族及其核心企业玛氏公司（Mars, Incorporated），揭秘了这家坐拥 M&M's、士力架、宝路、伟嘉以及众多连锁宠物医院等家喻户晓品牌的巨无霸企业背后鲜为人知的创业历程。 ## TL;DR 节目详尽拆解了玛氏从弗兰克·玛氏早年多次破产的小工坊，到其子福雷斯特·玛氏（Forrest Mars Sr.）凭借绝对理性与钢铁意志将其推向全球帝国的百年演进史。福雷斯特确立了以总资产回报率（ROTA）与“自由、质量、责任、互惠、效率”五大原则为核心的管理制度，在欧陆历练并开创宠物食品产业后重返美国，借力好时供应链缔造了 M&M's 并最终买断控股权实现帝国统一。如今玛氏年营收突破 500 亿美元，其中近六成收入来自宠物护理与连锁宠物医疗网络，并接连完成对箭牌、KIND 以及 Kellanova 的世纪并购。全篇展示了玛氏如何凭借 100% 家族完全控股、规模经济、极高转换成本与长线复利思维，构建起一座抗周期且不可复制的私有商业帝国。 ## Atmosphere & style 节目洋溢着《Acquired》标志性的深度商业探秘氛围与极富戏剧张力的人物传记色彩，两位主播默契十足的对谈既有严谨的财务框架剖析，又充满对荒诞商战细节的惊叹与幽默吐槽。福雷斯特·玛氏偏执冷酷、隐姓埋名进厂学艺乃至在会议室跪地为糖果祈祷的狂人形象跃然纸上，与童年经典零食的温情记忆形成了鲜明反差。整期播客叙事宏大且节奏紧凑，让听众在探究这家隐形超级帝国的层层迷雾时，体验到兼具智力激荡与商海传奇史诗感的畅快听感。 ## Bulletin - [01:45](https://www.youtube.com/watch?v=GyWJeY55x-8&t=105s) 玛氏公司年营收已突破500亿美元，超越可口可乐成为全美前五大私营企业，其中宠物护理业务占比高达59%，彻底颠覆其传统的糖果商定位。 - [01:40:26](https://www.youtube.com/watch?v=GyWJeY55x-8&t=6026s) 玛氏以独特的总资产回报率（ROTA）为核心经营飞轮，常年将业务目标锚定在18%，凭借极高的流水线人效与全员打卡制，使人均创收达到主要对手好时的近两倍。 - [02:12:37](https://www.youtube.com/watch?v=GyWJeY55x-8&t=7957s) 老福雷斯特·玛氏二战前与好时高管合资创办M&M's以获取特批原料与军需渠道，战后凭借精准洞察父母痛点的“只溶在口，不溶在手”营销战略，登顶全美第一糖果单品。 - [03:03:56](https://www.youtube.com/watch?v=GyWJeY55x-8&t=11036s) 遵循“先开枪试探、再开加农炮收购”的策略，玛氏通过联合巴菲特以230亿美元并购箭牌，并斥巨资收购皇家宠物、Banfield与VCA连锁宠物医院，构建起横跨食品与医疗服务的极高转换成本壁垒。 - [03:35:52](https://www.youtube.com/watch?v=GyWJeY55x-8&t=12952s) 过去百年间玛氏年营收复合增长率（CAGR）达到14%，依靠100%家族全资持股、拒绝上市与零外部债务的“自由”原则，践行跨越周期的超长期战略投资。 ## Key takeaways - [01:45](https://www.youtube.com/watch?v=GyWJeY55x-8&t=105s) 全美第二富有的玛氏家族始终保持极度隐秘，坚持100%全私有运营与零债务，不迎合资本市场短期季度财报，以十余年超长期视角做资产回报率投资。 - [17:26](https://www.youtube.com/watch?v=GyWJeY55x-8&t=1046s) 现代工业巧克力的诞生依托于精炼混捏（Conching）与精确调温结晶（Tempering）等复杂的物理化学工艺，具备极高的规模化生产门槛。 - [31:39](https://www.youtube.com/watch?v=GyWJeY55x-8&t=1899s) 糖果行业的底层商业法则是抢先占领区域市场并实现“口味锁定”；好时利用脱水产生的微酸丁酸风味，成功确立了美国本土对巧克力的独特味觉记忆。 - [47:34](https://www.youtube.com/watch?v=GyWJeY55x-8&t=2854s) 福雷斯特·玛氏将麦芽奶昔转化为便携的Milky Way糖果棒，并通过引入福特流水线与24/7满负荷生产，奠定了玛氏早期的机械化量产飞轮。 - [01:25:03](https://www.youtube.com/watch?v=GyWJeY55x-8&t=5103s) 早在1930年代远走英国创业期间，福雷斯特便敏锐收购Chappie狗粮开创商业化宠物食品工业，其丰厚的高毛利现金流为日后巧克力的全球扩张提供了关键资金。 - [01:27:54](https://www.youtube.com/watch?v=GyWJeY55x-8&t=5274s) 玛氏以“质量”与“责任”为制度基石，率先推行全员有权叫停瑕疵产线的安灯系统，并通过打破高管特权的开放式办公与全员考勤打卡塑造执行力文化。 - [01:40:26](https://www.youtube.com/watch?v=GyWJeY55x-8&t=6026s) 玛氏坚持以重置成本（Replacement Cost）核算固定资产并严格考核18%的ROTA，通过高薪降低员工流动率、沉淀技术诀窍，换取远超行业平均的超高人均产能。 - [01:53:34](https://www.youtube.com/watch?v=GyWJeY55x-8&t=6814s) M&M's 的创立是一场教科书级的借力突围：福雷斯特利用糖衣防融痛点绑定好时高层成立合资公司，在二战民用限额背景下依靠军需采购完成了原始资本积累。 - [02:12:37](https://www.youtube.com/watch?v=GyWJeY55x-8&t=7957s) 经典广告语“只溶在口，不溶在手”精准击中了实际买单者（父母担心脏手污损家具）与最终消费者（儿童）的心理差异，确立了超级消费品品牌的不可替代性。 - [02:25:37](https://www.youtube.com/watch?v=GyWJeY55x-8&t=8737s) 福雷斯特历经二十年隐忍与拉锯，最终耗资2500万美元全资收回芝加哥老玛氏公司，彻底推行铁腕整顿并立下半年死线自主研发巧克力涂层，摆脱好时的原料遏制。 - [02:40:00](https://www.youtube.com/watch?v=GyWJeY55x-8&t=9600s) 士力架通过廉价物料（牛轧糖、花生）形成极低物料成本与强饱腹感，在不提价前提下以加量优势打击死守纯巧克力排块缩水的好时，于1973年登顶全美第一糖果商。 - [02:56:58](https://www.youtube.com/watch?v=GyWJeY55x-8&t=10618s) 遵循“低成本买入大宗商品，高溢价出售消费品牌”的原则，玛氏联合伯克希尔·哈撒韦斥资230亿美元并购口香糖龙头箭牌，并在此后全额回购股权完成绝对整合。 - [03:03:56](https://www.youtube.com/watch?v=GyWJeY55x-8&t=11036s) 玛氏向宠物医疗服务业的大举跨界构建了深厚的护城河：从处方粮（皇家宠物）到线下连锁诊所（Banfield、VCA），形成了极高黏性的健康档案与定点就诊转换成本。 - [03:13:25](https://www.youtube.com/watch?v=GyWJeY55x-8&t=11605s) 如今宠物护理板块已占玛氏总营收的59%和员工规模的三分之二，全美占据8%的宠物连锁医院网络，玛氏已由传统糖果巨头成功蜕变为全球宠物生态超级帝国。 - [03:30:10](https://www.youtube.com/watch?v=GyWJeY55x-8&t=12610s) 糖果与宠物护理行业具备极强的抗衰退属性与糖分/心理依赖，全美98%的家庭年均购买糖果达35次，高频复购助推玛氏在历次金融危机中保持高速增长。 ## Detailed walkthrough ### [00:00](https://www.youtube.com/watch?v=GyWJeY55x-8&t=0s) M&M's 的丰富口味与开场闲聊节目伊始，Ben Gilbert 向 David Rosenthal 抛出一个问题：现在能叫出多少种 M&M's 豆的口味？David 随口列举了原味（Plain）、花生（Peanut）、花生酱（Peanut Butter）等经典款。Ben 随即纠正了一个冷知识：官方早已不再使用“原味”这个叫法，它的正式名称是“牛奶巧克力”（Milk Chocolate）。两人随后继续盘点：黑巧克力、只在节日期间限定回归的薄荷味、椒盐脆饼（Pretzel）味，以及让坚果过敏者退避三舍的杏仁味。讨论逐渐延展到了更小众乃至猎奇的品种： - 脆香米口味（Crunchy Cookie，取代了许多人童年记忆里蓝色包装的 Crispy 款） - 黑巧克力花生、软糖布朗尼（Fudge Brownie）、篝火棉花糖夹心饼（Campfire S'mores） - 焦糖冷萃咖啡（Caramel Cold Brew） - 各种引发争议的限量怪味：生日蛋糕、辣椒坚果（Chili Nut）以及被二人戏称听上去相当倒胃口的“南瓜拿铁”（Pumpkin Spice Latte）不过两人达成共识：无论花样如何翻新，真正撑起这家糖果帝国庞大销售额的基石，始终是牛奶巧克力和花生这两大常青树。 --- ### [01:45](https://www.youtube.com/watch?v=GyWJeY55x-8&t=105s) 隐秘帝国 Mars, Inc.：规模、财富与低调传奇本期节目是 Acquired 播客 2024 年秋季档的收官之作。主持人谈到，策划之初原本只是想在假日季聊点轻松愉快的怀旧题材——围绕那些经典的糖果角色和童年广告展开。然而，随着对 M&M's 背后的母公司玛氏公司（Mars, Incorporated）的调查不断深入，他们发现了一个极其惊心动魄的商业传奇。这个故事横跨了一战与二战，伴随着工艺技术的革新发明，内部更是充斥着戏剧性十足的家族恩怨。在商业策略层面，玛氏展现出的老练手腕堪比 LVMH、沃尔玛（Walmart）和好市多（Costco）。通过几代人的经营，玛氏家族已成为全美第二富有的家族，但同时也是全美行事最为低调、隐秘的豪门之一。玛氏的商业版图之辽阔远超公众认知： - **糖果点心**：除了 M&M's，还拥有全球最畅销的糖果士力架（Snickers），以及近年收购的健康坚果棒品牌 KIND。 - **宠物护理与食品**：宝路（Pedigree）、伟嘉（Whiskas），以及庞大的连锁宠物医院业务（VCA、Banfield）。 - **主食食品**：原 Uncle Ben's（现更名为 Ben's Original）大米。 - **体量对比**：去年玛氏公司的年营业额正式突破 500 亿美元大关，其营收规模已经超越了可口可乐公司（The Coca-Cola Company）。而且作为一家完全由玛氏家族私人持股的企业，它是全美排名前五的超大型私营企业之一。随后，主持人顺带提及了 Acquired 旗下 ACQ2 频道近期与 Arm 首席执行官 Rene Haas 探讨芯片架构的精彩对谈，公布了听众问卷的获奖者，并感谢了年度赞助商摩根大通支付（J.P. Morgan Payments）。 --- ### [05:04](https://www.youtube.com/watch?v=GyWJeY55x-8&t=304s) 溯源 1883 年：弗兰克·玛氏与母亲的厨房甜品探寻玛氏帝国的起点，时间要倒流回 1883 年 9 月。尽管关于出生地究竟是宾夕法尼亚州还是明尼苏达州存在些许争议，但这个商业帝国的始祖弗兰克·C·玛氏（Frank Clarence Mars）的故事主要是从明尼苏达州展开的。在展开叙述之前，David 特别致谢了《巧克力帝王》（*The Emperors of Chocolate*）一书的作者乔尔·格伦·布伦纳（Joël Glenn Brenner）。玛氏公司内部向来壁垒森严，布伦纳是长达一个世纪以来极少数真正打入其内部的记者。她在 1991 年担任《华盛顿邮报》年轻记者期间，坚持整整一年每天致电公司公关，最终叩开了玛氏的大门，并在《华盛顿邮报杂志》上发表专题文章，随后扩写成了这部详实记录玛氏与好时（Hershey）双雄争霸的经典著作。弗兰克的父亲经营着一家面粉磨坊，母亲埃尔瓦（Elva）则是一位全职家庭主妇。然而弗兰克幼年不幸罹患轻度小儿麻痹症，虽然保住了性命，但双腿落下残疾，整个成长过程中都必须佩戴矫形支具。这意味着他无法像普通孩子一样在户外奔跑嬉戏，放学后只能留在厨房陪伴母亲。由于父亲经常带回多余的袋装面粉，母亲埃尔瓦便带着弗兰克潜心烘焙——从面包、馅饼、蛋糕，再到让弗兰克最着迷的各类糖果。 ```mermaid flowchart TD accTitle: 弗兰克·玛氏早年制糖背景 accDescr: 展示弗兰克·玛氏从因病居家烘焙到进入一分钱糖果市场的早期经历。 subgraph 家庭背景与启蒙 A["父亲: 面粉磨坊主 (提供充足面粉材料)"] --> C["与母亲埃尔瓦居家烘焙"] B["幼年患小儿麻痹症 (佩戴支具无法户外运动)"] --> C end subgraph 商业初探 C --> D["掌握烘焙糖果手艺 (成为本地高中小有名气的糖果师傅)"] D --> E["1902年: 19岁创立首家糖果批发公司 (面向药房与杂货店批发销售)"] E --> F["产品定位: 一分钱糖果 (Penny Candy) (无品牌、纯糖制作、儿童消费群体)"] end ``` 在 19 世纪末 20 世纪初的美国，“糖果”（Candy）的定义与现代认知大相径庭： - **巧克力的缺失**：当时全美市场上几乎还没有现代意义上的纯巧克力块或排糖。 - **一分钱糖果（Penny Candy）**：市面上充斥的是软糖（Gumdrops）、甘草糖（Licorice）等纯以蔗糖和玉米糖浆为基底的散装杂糖。 - **销售与分销模式**：这些糖果没有任何全国性品牌，就像当今烘焙坊向独立咖啡馆供应司康饼一样，由当地烘焙者小规模手工熬制后，批发给杂货铺、药店柜台，主打低龄儿童的一分钱零用钱消费。高中毕业后，已经练就一身出色制糖手艺的弗兰克在 1902 年（年仅 19 岁）顺理成章地创办了自己的糖果公司，向明尼阿波利斯本地零售商批发散装糖果。同年，他与艾瑟尔·基萨克（Ethel Kissack）短暂成婚，并诞下一子——福雷斯特·玛氏（Forrest Mars）。这位福雷斯特，正是日后将玛氏真正推上全球巅峰的核心灵魂人物。然而，弗兰克的首次创业并不算成功。当时米尔顿·好时（Milton Hershey）虽然刚刚在 1900 年开始于宾夕法尼亚州小规模尝试销售经典的 5 美分纯牛奶巧克力排块，但好时尚未完全掌握大规模量产工艺（甚至在厂房还没彻底搞清牛奶巧克力配方前就硬着头皮开工，全凭最后一刻的技术突破化险为夷），巧克力尚未在全美普及，明尼阿波利斯更是鲜有人见。而弗兰克所坚守的这种面向儿童的散装“一分钱糖果”，不仅客群狭窄、利润微薄，且面临着一个致命的行业缺陷。 ### [10:51](https://www.youtube.com/watch?v=GyWJeY55x-8&t=651s) 破产、流放与“第四次创业”：玛氏帝国的跌宕开端早期的糖果极易腐坏，当时甚至连空调都还没有普及。绝大多数糖果制造商都面临着极其严重的库存损耗问题，大批商户纷纷倒闭。几年之后，厄运同样降临在弗兰克·玛氏（Frank Mars）身上。1910 年，弗兰克彻底破产，妻子艾瑟尔（Ethel）选择与他离婚。艾瑟尔带着年仅六岁的儿子福雷斯特·玛氏（Forrest Mars），将他远远送去加拿大萨斯喀彻温省（Saskatchewan）一个偏僻的矿业小镇，交给外公外婆抚养；自己则留在明尼阿波利斯（Minneapolis）的一家百货公司当售货员，彻底重启自己的人生。这背后的残酷原因其实非常现实：当时家里已经没有任何钱来抚养这个孩子。弗兰克本应每月支付 20 美元的抚养费，但他根本拿不出来，艾瑟尔独自无力承担，只能将幼子送往异乡。在 20 世纪初，这类家庭惨剧屡见不鲜。然而，弗兰克丝毫没有被破产、离婚以及拖欠抚养费的失败父亲形象击垮。不久后，他迎娶了第二任妻子——巧合的是，她的名字也叫艾瑟尔。弗兰克带着新妻子搬迁至西雅图，重操旧业继续兜售糖果。但西雅图的生意仅仅维持了一年便再次宣告破产。为了躲避债权人的追讨，弗兰克又带着妻子悄悄溜到了南边的塔科马（Tacoma）。在塔科马，弗兰克迎来了人生的第三次创业。1914 年，他直接把自家的厨房当成了糖果作坊。然而仅仅几年后，这家厨房糖果店再次倒闭。经历了“三振出局”式的连续失败后，时间来到了 1920 年。弗兰克和第二任妻子艾瑟尔决定杀回明尼阿波利斯——他们心想，整整十年过去了，昔日的债主和熟人应该已经淡忘，他们终于可以重新抛头露面了。弗兰克在这里开办了他的第四家糖果公司。谁也无法预料，正是这家历经九死一生、由连续失败者创立的第四家公司，日后竟奇迹般地蜕变为年收入高达 500 亿美元、享誉全球的庞大家族私有企业——玛氏公司（Mars, Incorporated）。不过，玛氏日后的辉煌战绩，其根源并不能全归功于弗兰克一人。 - 1910 年：弗兰克·玛氏破产并离婚，6 岁的福雷斯特被送往加拿大偏远矿镇抚养；弗兰克当时欠缴每月 20 美元的抚养费。 - 1911—1914 年：弗兰克与第二任妻子艾瑟尔迁往西雅图创立第二家公司（1 年内破产逃债至塔科马）；1914 年在塔科马家中厨房创立第三家公司（数年后再度倒闭）。 - 1920 年：弗兰克重返明尼阿波利斯创办第四家糖果公司，即玛氏公司的雏形。 --- ### [13:29](https://www.youtube.com/watch?v=GyWJeY55x-8&t=809s) 巧克力的旧时代与弥尔顿·好时（Milton Hershey）的豪赌弗兰克的第四次创业与以往截然不同，关键变量在于他涉足了“巧克力”。在当时，巧克力与普通的廉价硬糖（Penny candies）或焦糖是完全不同的物种。当时制造巧克力所必需的可可豆在美国极其稀缺，极少有人直接从可可的发源地南美洲进口，而且其加工工艺极其繁复艰涩。彼时全球掌握这门技艺的几乎全在欧洲，而北美大陆上唯有一位破局者——弥尔顿·好时（Milton Hershey）。好时的故事不仅充满传奇色彩，更是与玛氏的发展轨迹紧密缠绕在一起。好时原本也是一名糖果商人，在经历了自己的多次失败后，他在费城地区建立了一家规模庞大的区域性焦糖制造公司。1900 年，好时以 100 万美元的天价卖掉了焦糖公司（相当于现今的 3600 万至 3700 万美元），成为了前巧克力时代最成功的商业巨擘之一。但在出售公司之前的 1893 年，好时前往芝加哥参加了哥伦布纪念博览会（World's Columbian Exposition，即世界博览会的前身）。在博览会的德国展区，好时第一次品尝到了巧克力，并瞬间为之倾倒。被巧克力丰富复杂的风味彻底征服的好时，当场买下了展位上展出的所有德国巧克力制造设备，要求将其直接运回宾夕法尼亚州兰开斯特（Lancaster）的工厂，全力转型进军巧克力制造。需要厘清的是，好时当时购买机器制作的并不是现代意义上的牛奶巧克力，而只是纯固体巧克力。在此之前的数千年里，人类几乎完全将巧克力作为一种饮品来享用，固体巧克力棒在 19 世纪末仍是一项诞生不过十数年的颠覆性创新。制作巧克力的历史最早可追溯至 5300 年前的厄瓜多尔，并在阿兹特克文明（蒙特祖马时代）被发扬光大。但在 19 世纪末以前，巧克力既没有加入牛奶，质地也不具备现代巧克力标志性的光泽与清脆折断感（snap），口感粗糙，与如今丝滑甜美的块状巧克力相去甚远。随着好时在巧克力领域的探索越来越深，他远赴欧洲考察，并在瑞士接触到了由雀巢（Nestlé）等先驱刚刚发明不久的真正“牛奶巧克力”。 --- ### [17:26](https://www.youtube.com/watch?v=GyWJeY55x-8&t=1046s) 可可的蜕变：从果实到巧克力的精妙工艺为了讲清牛奶巧克力的突破性所在，主播特别致谢了旧金山著名的 Bean-to-Bar 手工巧克力工坊 Dandelion Chocolate 的创始人托德·马索尼斯（Todd Masonis）。马索尼斯不仅带团队完整参观了他们极富魅力的旧金山工厂，更详细拆解了一颗可可豆转化为现代巧克力的复杂工业流程： ```mermaid flowchart TD accTitle: 可可豆加工至精炼调温的完整工艺流程 accDescr: 展示从采摘发酵、干燥海运、烘焙风选，到研磨精炼与控温结晶的核心工业步骤 subgraph Origin["产地初加工（南美 / 非洲）"] A["采摘可可豆荚并取出种子"] --> B["木箱发酵 (酵母产酒，酸性发酵灭活)"] B --> C["干燥控酸 (日晒床 / 机械烟熏 / 香蕉叶)"] end subgraph Factory["工坊精加工（欧洲 / 工厂）"] C --> D["装袋海运至工厂清洗与烘焙"] D --> E["风选脱壳 (Winnowing) 获取核心可可碎 (Nibs)"] E --> F["研磨压榨 (分离为可可粉与可可脂)"] F --> G["精炼混捏 (Conching) (滚筒长时间研磨均质)"] G --> H["调温结晶 (Tempering) (排列可可脂晶体，防止起霜)"] end ``` 巧克力的源头是一种橄榄球形状的可可果实，原产于南美洲，后被广泛引种至非洲。剖开外壳后，果肉包裹着核心种子。可可果肉本身带有乳白色果浆感，酸甜可口，但其味道与巧克力毫无关系；真正孕育出巧克力风味的是内部的种子（即生可可豆）。 1. **木箱发酵**：采摘出的可可豆被置入木箱中进行发酵。微生物酵母首先吞噬糖分转化为酒精，随后醋酸菌将酒精分解为酸，发酵产生的高温与酸性彻底灭活可可豆，锁住风味前体。 2. **脱水干燥**：发酵完成后，豆子需要在产地进行干燥处理。工人们会利用露天晾晒床、机械烟熏干燥机或铺垫香蕉叶来脱水。干燥过程的剧烈程度直接决定了可可豆内部的果酸残留量，这也使得不同产地和批次的豆子风味波动极大。 3. **海运与风选（Winnowing）**：豆子入麻袋后通过海运送达工厂。经过清洗和烘焙后，机器会剥离外层薄壳，这一工序被称为“风选”，留下的纯净豆仁核心即为“可可碎”（Cacao Nibs）。 4. **研磨与精炼（Conching）**：可可碎经物理压榨后，会分离成可可粉（Cocoa Powder）与可可脂（Cocoa Butter）。之后，原料进入巨型圆柱滚筒中进行名为“精炼混捏”（Conching）的关键工序。1879 年，瑞士著名巧克力大师鲁道夫·莲（Rudolf Lindt）在周末偶然忘记关闭研磨滚筒，让机器整整持续运转了三天三夜，意外发现了可可颗粒被彻底研磨到微米级别、质地变得极致丝滑的秘密。精炼技术使得巧克力制造商可以通过回添可可脂，创造出瑞士巧克力名扬天下的奶油般融化质感。 5. **控温结晶（Tempering）**：如果直接将精炼后的液态巧克力冷却固化，巧克力在常温下极易变质并产生“起霜”（Bloom）——就像夏天放在暴晒车厢里的巧克力融化后再凝结时，表面会浮现一层难看的白色粉末，失去光泽和折断时的清脆声响（snap）。为了使巧克力具有稳定的货架期，必须通过精准的“调温”（Tempering）物理化学过程，引导可可脂中的脂肪分子排列成极其规整的晶体结构，最终赋予巧克力光亮照人的外观和完美的脆硬质感。 ### [21:44](https://www.youtube.com/watch?v=GyWJeY55x-8&t=1304s) 调温工艺与巧克力的极致复杂性在精炼（conching）之后，液态巧克力必须经历极为严密的“调温”（tempering）工艺。制作者需要先将巧克力加热至“超液态”（super liquefy）以彻底消除所有内部晶体，随后精确降温至特定阈值，促使理想的晶核（seed crystals）形成。紧接着再次微幅升温并最后冷却定型。这一两步调温法至关重要：如果跳过重新升温的环节，巧克力表面就会析出难看的“起霜”（bloom）；唯有精准培育出结构正确的晶核，才能让整批巧克力顺着理想的晶体结构结合，呈现出光亮平整的外观以及清脆利落的掰断感（shiny break）。主持人感叹道，在做这期播客之前虽然也喜欢巧克力，但深入了解其制作过程后才发现其门槛之高——更不用提后面更复杂的牛奶巧克力了。他们甚至开玩笑地“向葡萄酒和咖啡开炮”，直言巧克力的制作工序远比咖啡和葡萄酒更加繁复。以咖啡为例，咖啡豆在烘焙研磨后直接浸泡在液体中即可萃取，完全没有调温、精炼这种精密苛刻的物化过程。面对眼前的一堆 M&M's 和士力架（Snickers），人们往往想当然地以为它们只是流水线上生产出的廉价工业品；但事实上，它是一种极难驯服的农产品，凝聚了跨越多个大洲、历经数十年研发的不同工序，最终才被加工成均质、稳定且受大众追捧的消费品。从可可果实采摘、发酵、豆子烘烤加工，再到精炼与调温，各个阶段还涉及糖分的配比。如果制作 100% 纯黑巧克力，不仅工艺极高且苦涩难耐，几乎没人咽得下去；多数黑巧爱好者能接受的极限是 85%（其余 15% 为糖），常见的是 70%（30% 为糖）；而牛奶巧克力的可可含量通常只有 30% 至 50%，其余则是糖与牛奶。如今市面上除非购买类似 Dandelion 这种精品“原豆排块”（Bean-to-Bar）手工巧克力，普通工业巧克力在加工中往往会添加大量额外成分，例如额外的可可脂、糖、大豆卵磷脂（soy lecithin）以及用于模拟巧克力风味的香草香精。 ```mermaid flowchart TD accTitle: Chocolate Tempering Process accDescr: A flow diagram showing the heating and cooling steps required to temper chocolate properly. A["精炼后液态巧克力"] --> B["超高温加热 消除所有既有晶体"] B --> C["精确控温降温 培育理想晶核 (Seed Crystals)"] C --> D["二次微幅升温 消除低熔点不稳定晶体"] D --> E["最终平稳冷却 形成均质晶体结构且不起霜"] ``` --- ### [24:18](https://www.youtube.com/watch?v=GyWJeY55x-8&t=1458s) 雀巢的婴儿配方奶粉与牛奶巧克力的诞生严格来说，“黑巧克力”在过去就是纯粹的巧克力本体，只是后来为了与加入牛奶的品类区分，才被追溯命名为黑巧克力。而牛奶巧克力的发明史，需要将时间倒回至 Milton Hershey 卖掉他的第一家焦糖公司、创办好时巧克力公司（Hershey Chocolate Company）的大约 35 年前。 1866 年，身在瑞士的亨利·雀巢（Henri Nestlé）正在钻研婴儿喂养方案，试图解决当时极为严重的婴儿死亡率问题——在那个年代，全球约有五分之一的婴儿活不过一周岁。为了救助那些无法母乳喂养的婴儿，雀巢着手研发替代食品。当时最大的痛点是液态牛奶极易腐败变质。经过反复摸索，雀巢攻克了在不烧焦牛奶的前提下浓缩脱水的难题：他利用低压空气泵在低温状态下将牛奶浓缩为奶粉，并混入自己研发的谷物配方，从而在 1867 年制造出了人类历史上最早的婴儿配方奶粉。这一发明让无数婴儿得以存活，形同医学奇迹；令人意想不到的是，雀巢这家以婴儿配方奶粉起家的公司，日后竟直接孕育了现代牛奶巧克力工业。当时，雀巢的一位邻居正因自家孩子排斥母乳而迫切需要这款奶粉，这位邻居恰好是一位名叫丹尼尔·彼得（Daniel Peter）的巧克力工匠。1867 年，彼得灵光一现：既然当时许多人喝热巧克力饮料时喜欢倒入牛奶，那么能否直接将雀巢的脱水奶粉与可可、糖预先混合，制成一款预制的便携奶香饮品？ --- ### [26:42](https://www.youtube.com/watch?v=GyWJeY55x-8&t=1602s) 丹尼尔·彼得的突破：炼乳与固态牛奶巧克力将牛奶引入巧克力面临着极其严峻的化学挑战：牛奶极不稳定且极易酸败，而一块牛奶巧克力必须在货架上存放 6 个月甚至更久而不变质。在初期试验中，彼得屡屡受挫：混合物粗糙多渣，牛奶中的水分与可可豆天然油脂根本无法相融；如果试图自己把牛奶烘干，稍微控温不当就会酸败发臭。历经多年攻坚，彼得最终放弃了雀巢干燥的奶粉粉末，转而采用炼乳（condensed milk）——一种类似浓缩糖浆的流体。他找到了破局之法：先将炼乳与可可浆混合，随后将其摊平在大托盘上，施以微温进行极其缓慢的烘干脱水，最终制成了稳定的牛奶巧克力薄片。这些薄片既能冲泡成丝滑饮品，也奠定了日后固态排块的基础。随后，吉百利（Cadbury）等欧洲各大巧克力厂商在此基础上进一步迭代；到 1879 年，当固态牛奶巧克力工艺与鲁道夫·莲（Rodolphe Lindt）发明的精炼工艺相结合时，过去粗糙干硬、硌牙难嚼的巧克力彻底蜕变成入口即化、丝滑浓郁的珍馐，整个巧克力市场的规模随即迎来了十倍以上的爆发式增长。 - **苦甜调和的吸引力**：纯可可本身风味复杂却过于苦涩，而牛奶的柔滑与乳脂感恰好能够平衡这种苦味，形成了无与伦比的风味组合。 - **历史资料来源**：节目提及 Cadbury 家族后裔 Deborah Cadbury 所著的《巧克力战争》（*Chocolate Wars*），书中详尽记述了欧洲早期巧克力先驱的探索之路。 --- ### [29:17](https://www.youtube.com/watch?v=GyWJeY55x-8&t=1757s) 好时在宾夕法尼亚的豪赌与独特的“微酸”风味大洋彼岸的 Milton Hershey 嗅到了欧洲牛奶巧克力的巨大商机，立志要在宾夕法尼亚州建立自己的巧克力帝国，让牛奶巧克力在美国实现规模化量产。但他既不是化学家，工厂里也没雇佣任何专业化学家，起步阶段几乎全凭盲目的反复试错。 Hershey 押上了全部身家，在日后被称为“好时镇”（Hershey, Pennsylvania）的土地上平地建起了一座巨型工厂。经过数年摸索，好时团队终于捣鼓出了一套工业化生产方案。然而这套工艺远不如欧洲同行那样严谨精妙，在脱水加工的过程中，牛奶不可避免地发生了轻微的酸败分解（产生丁酸）。这就是为什么很多欧洲或国际消费者在初次品尝 Hershey's 巧克力时，常会惊呼难以下咽，甚至觉得它有一股“呕吐物般的酸腐怪味”（sour funk）；但对从小吃到大的几代美国人而言，这种标志性的微酸风味反倒构成了他们对“真正巧克力”的味觉记忆。关于好时工艺的突破，历史上存在两种说法。根据《巧克力战争》中的第一种记录：在经历了一连串艰难的失败后，好时麾下的一位名叫 Schabach 的研究人员主动打破常规，尝试在低温下让脱脂牛奶极其缓慢地蒸发。该方法成功降低了牛奶中的水分，当与糖混合时，形成了一种香甜浓郁、毫无焦糊味的乳状浓缩物。更为关键的是，这种浓缩物能够与可可原料稳定融合且不会迅速腐坏变质。面对这款平滑顺口但带着独特微酸气息的成品，Hershey 大喜过望，将其誉为具有鲜明原创性的“完美美国巧克力”。 ### [31:39](https://www.youtube.com/watch?v=GyWJeY55x-8&t=1899s) 微酸牛奶之谜与先发制人的“口味锁定” 关于好时（Hershey's）巧克力的标志性风味，坊间一直流传着第二种说法：当时米尔顿·好时（Milton Hershey）从欧洲收购了一大批奶粉，在横渡大西洋的漫长航程中，这批奶粉已经轻微变质发酸。好时先生舍不得扔掉如此巨量的原料，硬着头皮将其加入巧克力配方中，没想到上市后大受欢迎。尽管好时官方历来坚决否认酸奶粉参与了配方研发，但这一充满戏剧色彩的故事出自戴博拉·卡德伯里（Deborah Cadbury）之手——作为英国糖果巨头卡德伯里（Cadbury）家族的成员，她自然更倾向于讲述这个略带讽刺的版本。但无论传闻真假，它都揭示了糖果和巧克力行业最残酷、最关键的商业法则：**抢先进入市场并定义特定地区的口味标准**。欧洲人普遍觉得好时巧克力的微酸口感难以下咽，甚至有呕吐物的味道；而美国人从小吃它长大，潜意识里早已认定“这就是巧克力本来的味道”。童年记忆与高浓度、强刺激且复杂的糖分体验纠缠在一起，只要咬上一口好时排块，大脑便会本能地倒流回童年时代。现代糖果消费的数据更是印证了这一规律： - **成人主导市场**：如今 75% 的糖果是由成年人吃掉的。 - **购买决策力量**：成年人占据了糖果全渠道购买总量的 90%。 - **时代巨变**：这一格局彻底打破了纯巧克力时代之前、收银台前仅靠小孩兜里几枚硬币购买“一分钱散装糖（Penny Candy）”的旧世界。 ```mermaid flowchart TD accTitle: 好时早期规模化与口味锁定循环 accDescr: 展示好时如何通过资本、全美分销和口味锁定建立行业垄断地位 subgraph Capital ["资本与产能壁垒"] A["出售焦糖公司套现 获得巨额自筹资金"] --> B["配方未成先建巨厂 打造全美唯一规模化巧克力工厂"] end subgraph MarketPush ["定价与极致分销"] B --> C["主动定为 5 美分单价 打造大众买得起的日常品"] C --> D["地毯式分销渗透 杂货铺/加油站/报刊亭"] end subgraph TasteLock ["文化与心理护城河"] D --> E["一战军需配给+禁酒令推波助澜 数百万美军士兵与成人上瘾"] E --> F["定义美式微酸标准口味 形成童年怀旧与品牌垄断"] end ``` --- ### [33:36](https://www.youtube.com/watch?v=GyWJeY55x-8&t=2016s) 豪赌产能：定义美式工业糖果的底层逻辑米尔顿·好时能够逆天改命，根本原因在于他拥有当时美国任何对手都无法企及的资本底气与战略决绝。他兜里揣着出售前一家焦糖公司换来的巨额财富（相当于如今的 4000 万美元），敏锐地嗅到了欧洲牛奶巧克力的巨大前景。在根本拿不到欧洲保密配方的情况下，他选择直接逆向工程破解技术，更在配方尚未最终定型前，就斥巨资平地建起了全美绝无仅有的超大规模巧克力制造工厂。这是一种极度激进的“要么全力以赴，要么彻底出局（Go big or go home）”打法。一旦成功，就是规模化量产与地毯式分销；一旦失败，则是灾难性的倾家荡产。在商业策略上，好时展现出了非凡的远见：他没有将巧克力包装成高不可攀的贵族奢侈品，而是刻意将售价压低至 5 美分（a nickel）。他疯狂拓展分销网道，从廉价五分一毛店（Five and Dime）、街角杂货铺，一路铺进美孚石油（Standard Oil）的加油站与街头报摊，以一己之力奠定了现代糖果工业的流通范式。紧接着，历史的顺风车接踵而至： - **第一次世界大战**：美军效仿欧洲陆军，将高能量、抗变质的巧克力纳入士兵口粮配给。好时成为核心供应商，数百万前线大兵彻底迷恋上了这种微酸、高糖且富含咖啡因的“快乐补给品”。 - **禁酒令时代到来**：战后士兵返乡，恰逢全美推行禁酒令。酒精社交被依法掐断，寻求多巴胺慰藉与社交润滑剂的成年人迅速倒向了巧克力的怀抱。 --- ### [36:19](https://www.youtube.com/watch?v=GyWJeY55x-8&t=2179s) 混合糖果条爆炸与好时的“糖果界 AWS”飞轮禁酒令与一战红利引爆了整个行业，但单纯制作高纯度巧克力排块成本极高，寻常小商贩根本无力承担。散落在全美各地的糖果手艺人们脑筋一转：如果拿少量巧克力当外皮，里面包裹花生、牛轧糖、焦糖或棉花糖等便宜原料，不仅能大幅降低成本，还能调制出层次丰富的本地特色口味。由此，**混合糖果条（Combination Bar）**风暴席卷全美。到了 1920 年代末，全美诞生了多达 40,000 多种不同的区域性糖果条品牌。其中最具传奇色彩的当属柯蒂斯糖果公司（Curtiss Candy Company）推出的“贝比鲁斯（Baby Ruth）”糖果条。为了将这款产品推向市场，公司竟然雇佣了一架飞机飞越匹兹堡市上空，挂着微型降落伞将成千上万根糖果条从天而降，完成了商业史上一次堪称震撼的“物理级空投（Literal Drop）”。面对全美 40,000 多家竞争对手的野蛮生长，手握全美唯一大型巧克力精炼厂的好时不仅没有被分流，反而欣喜若狂。因为这四万多家小工坊几乎没有一家拥有自产巧克力的能力，他们全部排着队向好时采购原料涂层。**好时一举变成了巧克力淘金热中垄断性的“铁锹提供商”与“糖果界的 AWS”**： - **价值链彻底重构**：行业告别了“单一工厂从买可可豆到自制自销排块”的旧时代，首次出现了“好时供应底层原料涂层、第三方厂商采购封装消费级产品”的批发（Wholesale）供应链环节。 - **工业级保鲜包装**：巧克力的天然油脂在凝固后成为绝佳的密封层，将内部含有蛋白质的鸡蛋牛轧糖、富含油脂的花生牢牢锁住，在常温下长时间保鲜，从而组成了兼具碳水、脂肪和糖分的“全能便携能量棒”。 --- ### [39:38](https://www.youtube.com/watch?v=GyWJeY55x-8&t=2378s) 弗兰克·马尔斯的第四次创业与 Mar-O-Bar 的诞生画面切回到弗兰克·马尔斯（Frank Mars）身上。在经历了西雅图与塔科马三次惨烈的破产清算后，他重返明尼阿波利斯开启了他的第四次创业尝试。这一次，真正改变他命运的关键变量正是**巧克力**。他在西雅图和塔科马闯荡时，注意到太平洋西北地区极其流行奶油松露糖（Cream Truffles）。回到明尼阿波利斯后，他迅速借鉴了这一创意，推出了“维多利亚奶油糖（Victorian Buttercreams）”，并顺理成章地向好时采购工业巧克力进行挂浆包裹。这一产品在本地市场大获成功。随后，他以与第二任妻子埃瑟尔（Ethel）所生的小女儿名字命名，推出了“帕特里夏巧克力（Patricia's Chocolates）”系列。几年打拼下来，工厂年营收突破了 10 万美元左右——虽然还远远无法与好时的商业帝国相提并论，但这已经足以让历经坎坷的弗兰克过上极其体面的富足生活。到了 1922 年，看着全国如火如荼的糖果条热潮，弗兰克决定投身其中。他推出了旗下第一款混合糖果条——**Mar-O-Bar**。在糖果制造业内部，这种巧克力包裹内馅的糖果条被行业称为 **“Countlines（定量糖果条）”**： - **计件生产线（Count Lines）**：传统纯巧克力完全按重量（Weight）计价销售；但混合糖果条内部填充了大量廉价的牛轧糖和干果，若按纯巧克力重量计价完全脱离了零售消费实际。因此工厂的流水线不再以重量核算，而是以生产了多少“根（Count）”来结算，行业由此统称为 Countlines。然而，1922 年问世的 Mar-O-Bar 并没能一炮而红。它虽不至于彻底暴死，但也只能算反响平平。弗兰克依然只是一位偏安明尼苏达一隅的区域性糖果作坊主。直到 1923 年那个命运般的夏天，一场关键的父子重逢即将彻底颠覆马尔斯家族的轨迹。 ### [42:19](https://www.youtube.com/watch?v=GyWJeY55x-8&t=2539s) 赞助商时刻：J.P. Morgan Payments 在正式切入弗兰克与福雷斯特·马尔斯父子戏剧性重聚的高潮前，节目插播了年终特辑的赞助商 J.P. Morgan Payments。本和戴维特别提到，双方团队的合作契合度极高，摩根大通的团队不仅是 Acquired 的忠实听众，还在旧金山大通中心（Chase Center）的现场活动中将节目的创意放大了十倍。 J.P. Morgan Payments 作为全球最大的支付业务机构，服务了全球排名前二十大企业中的 18 家，并与 90% 的《财富》500 强企业保持业务往来。尽管常被视作大型跨国集团的专属，但今年已有不少初创团队在听完节目后成为了其客户。其全球金融基础设施实力雄厚，每日处理的支付体量高达 1 万亿美元，承载了全美超过 50% 的电商交易。摩根大通不仅将支付视作基础交易通道，更将其打造成驱动业务增长的关键杠杆，在防欺诈、外汇兑换、营运资金管理以及开发者 API 工具上进行了极深的技术投入。 - 全球前 20 大跨国企业中有 18 家使用 J.P. Morgan Payments。 - 覆盖全美超过 50% 的电子商务交易规模。 - 日均支付交易清算量突破 1 万亿美元。 ### [45:05](https://www.youtube.com/watch?v=GyWJeY55x-8&t=2705s) 传奇重逢：芝加哥牢房里打出的救命电话关于马尔斯帝国最富传奇色彩的一幕发生在 1923 年夏末。彼时 19 岁的福雷斯特·马尔斯（Forest Mars）正值大学暑假，在芝加哥兼职做流动推销员，挨家挨户兜售骆驼牌香烟（Camel cigarettes）。一天傍晚，他的上司下达了死命令：必须不惜一切代价在这座大城市打响知名度、冲击惊人的销量目标。年轻气盛的福雷斯特二话不说，展开了疯狂的扫街式地推，把骆驼香烟的巨幅广告海报贴满了芝加哥市中心，甚至连州街（State Street）沿街所有商铺的展示橱窗都被他糊得严严实实。这场极具轰动效应的营销噱头瞬间引爆了全城，次日一早甚至登上了《芝加哥论坛报》的头条，但也立刻引来了警察——这种未经许可的张贴行为属于违法，福雷斯特当即被押进了芝加哥的拘留所。身陷囹圄的他享有打一通电话的权利，而在茫茫人海中，他唯一能想到有能力将他保释出来的，竟然是他已经十三年素未谋面、音讯全无的亲生父亲弗兰克·马尔斯（Frank Mars）。两位主持人在此忍不住吐槽这段被马尔斯官方档案和多部传记反复传颂的“家族神话”：福雷斯特自六岁起就被送走，父子二人整整十三年毫无往来，且弗兰克当时人在明尼苏达州明尼阿波利斯，与芝加哥之间隔着整整一个威斯康星州，福雷斯特在监狱里究竟是如何神奇地掌握父亲电话号码的？但无论真实细节是否存在艺术加工，这恰恰展现了福雷斯特日后掌控一切、极具戏剧张力的人格特质。第二天午后，接到求助的弗兰克匆匆赶到芝加哥警局，替儿子缴纳了保释金，这对分别多年的父子终于在异乡的牢房门外重聚。 ### [47:34](https://www.youtube.com/watch?v=GyWJeY55x-8&t=2854s) 午餐灵感：把“麦芽奶昔”做成糖果棒弗兰克将获释的儿子带到附近一家快餐厅（Luncheonette）吃午饭。气氛从最初的生疏逐渐转向对彼此近况的倾谈，卖香烟的年轻福雷斯特在餐桌上点了一杯当时极受欢迎的麦芽奶昔（malted milkshake）。弗兰克则向儿子聊起自己在明尼苏达经营的糖果小作坊，以及他苦心研制却销量平平的“马罗棒”（Mar-O-Bar）。福雷斯特望着眼前那杯奶昔，脑中灵光乍现，对父亲提出了一个足以载入糖果工业史的构想：“人人都爱喝麦芽奶昔，如果把这种风味原封不动做成一根糖果棒呢？”他还自信地打包票，凭借自己的街头营销天赋，一定能把这款新品卖遍全美。这成为了“银河棒”（Milky Way）诞生的源头。虽然从概念到成品——用牛轧糖（nougat）打底、浇上焦糖、外层包裹巧克力——与真正的液体麦芽奶昔相去甚远，背后必定经历过复杂的口味调配与研发试验，但福雷斯特日后在家族档案馆（作家乔尔·格伦·布伦纳曾获准阅览）中留下的口述却异常简单粗暴： > “午饭后没多久，真见鬼，老头子居然真搞出了一款糖果棒，那就是一杯巧克力麦芽饮品。他在上面浇了些焦糖，外面裹了一层巧克力——算不上什么好巧克力，他当时买的都是廉价货——但那该死的东西居然大卖特卖，甚至连广告都没做。” ```mermaid flowchart TD accTitle: Milky Way 诞生历程 accDescr: 展现从牢房保释、午餐灵感到工业化量产并实现销售额爆发的完整路径 subgraph S1["芝加哥戏剧重逢"] A["福雷斯特推广香烟入狱"] --> B["弗兰克跨州保释儿子"] B --> C["快餐店午餐交流"] end subgraph S2["产品构想与研发"] C --> D["灵感：将麦芽奶昔做成糖果棒"] D --> E["产品成型：牛轧糖 + 焦糖 + 巧克力涂层"] end subgraph S3["商业爆发"] E --> F["1924年机械化流水线量产"] F --> G["首年销售额飙升至80万美元"] end ``` ### [49:35](https://www.youtube.com/watch?v=GyWJeY55x-8&t=2975s) Milky Way 的横空出世与工业化量产 1924 年，弗兰克·马尔斯正式将 Milky Way 推向市场，随即引发了全美零售终端的疯狂抢购。在产品推出的第一年，该单品的销售额便达到了不可思议的 80 万美元。在此之前，马尔斯公司的年销售额仅为 7.3 万美元，短短一年之内便狂飙至 79.3 万美元，业绩实现了整整十倍以上的指数级跨越。 Milky Way 取得现象级成功的核心不仅在于其独特的口味，更在于其商业模式的维度打击。在此之前，市面上的各类单颗零售糖果棒（Countline）绝大多数由各地分散的小作坊手工制作，生产效率低下、品质难以统一。而马尔斯率先采用了早期机械化与工业化流水线，在同一品牌标准和标准化生产流程下进行工厂级规模量产。这种远超同侪的工业化效率与全国分销意识，奠定了马尔斯公司日后称霸糖果行业的基石。 - 马罗棒公司（Mar-O-Bar Co.）年销售额在 Milky Way 上市后从 73,000 美元跃升至 793,000 美元。 - 上市首年（1924年）单品斩获 800,000 美元销售纪录。 - 颠覆了传统小作坊手工切块糖果的生产模式，建立流水线工业化生产。 ### [50:25](https://www.youtube.com/watch?v=GyWJeY55x-8&t=3025s) 伯克利的矿业高材生与早期的商业嗅觉节目的叙述随后倒流，试图解开一个疑问：当年被抛弃的幼童，是如何成长为一名在大学攻读工程并身兼顶尖推销员的青年的？六岁那年父母离异后，福雷斯特被送往加拿大萨斯喀彻温省（Saskatchewan）贫瘠苦寒的乡村矿区，由外祖父母抚养长大。在那个底层的矿工社区里，福雷斯特是个极其罕见的异类：他极度聪明、充满创业野心，同时性格孤傲、自命不凡——这极有可能是童年被父母双双遗弃的深刻创伤所催生出的自我保护机制。正如历史学家黛博拉·卡德伯里（Deborah Cadbury）在书中所写的那样：“哪怕诺亚方舟的滔天洪水，也阻挡不了福雷斯特·马尔斯。” 高中毕业后，福雷斯特没有像当地同龄人那样下井挖煤，而是考取了加州大学伯克利分校（UC Berkeley）的矿业学院。尽管一个来自加拿大矿区的穷小子如何拿到加州公立名校奖学金的过程扑朔迷离，但他确实入学了。他攻读矿业工程的初衷是成为矿山管理者，而非出卖体力的矿工。这种系统化、重逻辑的工程师思维，结合他过人的营销天分，深刻塑造了他日后追求极致生产效率的企业管理哲学。在大一期间，为了解决生计，福雷斯特在学校食堂找了一份兼职。他很快展现出敏锐的商业头脑，私下与主厨达成了一项协议：如果福雷斯特能凭借出色的谈判能力从当地批发商处以低于预算的价格采购肉类和食材，节省下来的差价就由他和主厨五五平分。凭借这套转手套利，年轻的福雷斯特很快就能做到每周净赚 100 美元，折合年收入高达 5,200 美元——这相当于当时美国普通家庭平均年收入的两倍以上。本和戴维感慨，这几乎是所有伟大商业巨擘共有的早年轨迹：无论是指挥宜家（IKEA）的英瓦尔·坎普拉德、沃尔玛的萨姆·沃尔顿，还是年轻时的沃伦·巴菲特，他们在青少年时期展现出的赚钱能力，就早已超越了身边的成年一家之主。 ### [53:12](https://www.youtube.com/watch?v=GyWJeY55x-8&t=3192s) 重逢与野心觉醒：从矿山工程师到家族企业继承者在加州大学伯克利分校（UC Berkeley）度过大一后，学校餐厅在暑期关闭，福雷斯特·马尔斯（Forrest Mars）为了生计加入了骆驼牌香烟（Camel）的巡回销售团队。正是这段打工旅程中——可能是在芝加哥，也可能是在明尼阿波利斯——他与疏离已久的父亲弗兰克·马尔斯（Frank Mars）重新取得了联系，并震惊地发现父亲已经变成了一位富豪。在此之前，福雷斯特对父亲的印象始终停留在“不断创业、不断破产”的恶性循环中；而眼前实打实的商业成功，瞬间成为颠覆他认知的数据点。即便在 Milky Way 诞生前，这家糖果公司的年收入已经能达到 10 万美元，即便按 10% 的微薄利润率算，这也是当时普通美国家庭收入的四到五倍。这彻底重塑了福雷斯特的野心。他此前只想当个懂工程、能去管理偏远矿场的采矿工程师，如今他立刻意识到：“我要做生意，我要掌管家族企业！”回到伯克利后，他留下了一句狠话：“去他妈的在偏僻山林里管矿山（the hell with running some mines in the Backwoods）。”据传，马尔斯家族档案库中保留着一段福雷斯特退休后、去世前与老部下交谈的珍贵录像，这些传神的原话正是研究者乔尔（Joël）查阅该档案时记录下来的。 - 福雷斯特的大一暑期工作：骆驼香烟（Camel）巡回销售员。 - 父亲的商业成功成为“存在证明”（existence proof），将福雷斯特的志向从采矿工程转向商业运营。 - 伯克利大二结束后，福雷斯特借助父亲的资金与支持转学至耶鲁大学（Yale），目的只有一个：学习商业并结识人脉。 --- ### [55:42](https://www.youtube.com/watch?v=GyWJeY55x-8&t=3342s) 耶鲁岁月：与杜邦家族结缘与商业体系的启蒙福雷斯特来到耶鲁并非为了学术虚名，而是极具目的性地拓展顶级圈子——就像当年马克·扎克伯格（Mark Zuckerberg）进入哈佛一样。命运巧合的是，他大三在耶鲁的第一任室友，正是皮埃尔·S·杜邦（Pierre S. du Pont）的侄子。当时的皮埃尔·S·杜邦不仅执掌着全美工业巨头杜邦公司（DuPont），更因杜邦是通用汽车（General Motors）的最大股东，而同时兼任通用汽车的掌舵人。凭借室友这层关系，福雷斯特顺藤摸瓜结识了皮埃尔，并开始如饥似渴地向这位顶级工业大亨请教商业运作之道。他近乎盘问般地探寻：杜邦规划系统（DuPont planning system）是如何运作的？化工与现代工业制造流水线该如何组织？现代企业会计与财务规划怎么做？短短几年间，这个昔日在加拿大深山吃尽苦头的采矿穷小子，竟然跻身于与洛克菲勒、卡内基齐名的商界教父身侧汲取管理精髓，展现出惊人的钻营与执行力。 ```mermaid flowchart LR accTitle: 青年福雷斯特·马尔斯的崛起与认知迭代 accDescr: 展示福雷斯特从伯克利求学、重逢父亲、转学耶鲁到结识杜邦并执掌工厂的经历路径。 subgraph Phase1["认知觉醒"] A["伯克利采矿工程"] --> B["暑期卖香烟 重逢致富的父亲"] B --> C["放弃偏远矿山 立志执掌家族商业"] end subgraph Phase2["耶鲁与杜邦人脉"] C --> D["转学耶鲁大学"] D --> E["室友引荐：结识皮埃尔·杜邦"] E --> F["学习现代工业制造与杜邦规划体系"] end subgraph Phase3["重塑马尔斯"] F --> G["推动工厂迁往芝加哥"] G --> H["引入福特式流水线 推行24/7极限产能"] end Phase1 --> Phase2 Phase2 --> Phase3 ``` --- ### [57:16](https://www.youtube.com/watch?v=GyWJeY55x-8&t=3436s) 挥师芝加哥：福特流水线与 24/7 极限产能从耶鲁毕业后，满载现代工业管理思想的福雷斯特立刻投身父亲的糖果事业。他向弗兰克提出的首要战略建议就是：离开明尼阿波利斯，迁往芝加哥。芝加哥不仅是当时全美糖果工业的心脏（黄箭、白箭口香糖的生产商箭牌 Wrigley 就坐落于此，甚至有小熊队主场 Wrigley Field 和街区 Wrigleyville 为证），更是全美规模最大、铁路货运网络最发达的交通枢纽，是产品走向全国的必争之地。然而，父子俩的经营理念在这座新建的芝加哥工厂上产生了剧烈摩擦。弗兰克经历了大半辈子的坎坷，如今发了财只想享受人生，追求排场与舒适。他在高尔夫球场旁斥资 50 万美元（按 1928-1929 年物价是一笔巨款）买下一块地皮，把工厂外立面打造成带有灰泥、穹顶与熟铁装饰的西班牙庄园风格，华丽得如同好莱坞摄影棚。福雷斯特则完全相反，他只关注内里：他聘请了为福特汽车设计总装流水线的奥斯汀公司（The Austin Company）来规划糖果产线，将汽车工业的标准化与机械化搬进糖果厂。 - **规模经济的极致狂热**：福雷斯特极力压榨工厂产能，强行推行 24/7 三班倒全天候运转。同行大多只在白班开工，福雷斯特却愤怒反驳：“见鬼，我们投了这么多钱建厂，必须全力以赴拼命运转！” - **爆炸级产能**：到 1929 年新厂投产首年，马尔斯每年生产出 2,000 万根 Milky Way 巧克力棒，在当时的工业水平下堪称天文数字。 - **与好时（Hershey）的共生**：马尔斯自身并不提炼巧克力，全部原料均从好时大宗批发采购。马尔斯迅速成为好时最大的客户，每年采购数百万美元的巧克力原料。当时的好时就像“亚马逊”，既经营零售品牌（amazon.com），又扮演着提供基础设施的底层原料供应商（AWS），无论谁在全美卖糖果，好时都能稳收“巧克力税”。 --- ### [01:01:23](https://www.youtube.com/watch?v=GyWJeY55x-8&t=3683s) 消费理念冲突与士力架（Snickers）的诞生随着 Milky Way 带来滚滚财源，弗兰克的大手笔消费愈发不可收拾：他在威斯康星州湖畔建造了占地 20,000 平方英尺的豪华度假别院；在田纳西州豪掷 200 万美元买下占地广袤的马场，命名为“Milky Way 牧场”；甚至购入了专属私人飞机以便在各地庄园间穿梭。一心想把每一分利润都再投资到扩大生产、追求杜邦式企业扩张的福雷斯特，对父亲的挥霍极度鄙夷与厌恶。然而，历史充满了戏剧性的讽刺：正是父亲这座看似玩物丧志的豪华马场，孕育了商业史上最赚钱的单品。1930 年，弗兰克研发出一款全新巧克力棒，并决定以他在田纳西牧场最心爱的一匹马的名字命名——这便是日后征服全球的“士力架”（Snickers）。主播们在节目中打趣地现场拆开士力架大嚼，直言尽管纯手工单源黑巧克力（如 Dandelion）风味更高级，但士力架这种工业糖油混合物的第一口满足感无与伦比，吃完“仿佛能直接上场打一场 NFL 橄榄球赛”。关于士力架的起源，在福雷斯特的个人传奇中还有另一个流传甚广的版本：士力架的本质就是“Milky Way 加上花生”。据说福雷斯特当时正在思索如何打造一款能超越 Milky Way、推向全美乃至全球的硬核能量食品，他甚至专门泡在图书馆里，埋头考据古罗马军团行军打仗时究竟给军团士兵（legionnaires）提供什么食物作为能量补给。 ### [01:03:43](https://www.youtube.com/watch?v=GyWJeY55x-8&t=3823s) 士力架与三剑客的诞生：产品创新的黄金年代关于士力架（Snickers）的诞生还有一个有趣的传说。据说灵感来自古罗马军团在行军时食用的高能量口粮——花生、鸡蛋和糖，这类食物能量密度极高。从本质上看，士力架其实是一款绝佳的高能能量棒。虽然如今士力架常被当作糖果推广（同时它也是 NFL 的官方赞助商），而市面上 Cliff Bar 等品牌被标榜为健康能量棒，但两者的本质并没有太大区别。士力架于 1930 年正式推向市场。紧接着在 1932 年，玛氏又推出了“三剑客”（Three Musketeers）巧克力棒。如今大家吃到的三剑客只是一款由巧克力包裹的纯牛轧糖甜点，既没有花生也没有焦糖，很多人会困惑它为什么叫这个名字。其实，“三剑客”最初名副其实：一包里面装有三根独立的巧克力棒，分别代表巧克力、香草和草莓三种不同的口味。后来由于第二次世界大战期间的物资配给限制，加上草莓原料价格暴跌暴涨，玛氏削减了生产线，去掉了香草和草莓味，仅保留了巧克力口味。虽然只剩一种风味，但“单剑客”听起来实在不够响亮，于是“三剑客”的名字便一直沿用至今。 ### [01:05:12](https://www.youtube.com/watch?v=GyWJeY55x-8&t=3912s) 大萧条中的逆势奇迹与品牌战略回顾时间线，玛氏在 1928 至 1929 年建立芝加哥工厂，1930 年推出士力架，1932 年推出三剑客。而此时外部世界正经历着惨烈的大萧条。令人震惊的是，糖果行业展现出了难以置信的抗周期韧性：玛氏的年销售额从 1924 年（Milky Way 推出首年）的 80 万美元，一路飙升至 1932 年大萧条最严重的谷底时期的 2,500 万美元。糖果虽不健康，但在失业和绝望的年代，它能提供最便宜、最即时的多巴胺刺激，成为人们日常生活中高频复购的习惯性消费。当时，Forest Mars 密切观察了 Hershey 的运营模式，意识到糖果是一门极具规模效应的生意。只要规模足够大，就能在极低定价下依然保证充沛的利润，让失业的底层大众也能买得起这份甜蜜慰藉。同时，玛氏在这一时期的产品矩阵十分巧妙：Milky Way、Three Musketeers 和 Snickers 实际上都是在基础原料配方上稍微做加减法（增加焦糖或花生），但老 Frank 并未将它们作为单一品牌的风味衍生品（像今天的各种 M&M's 变体那样），而是为每一款产品塑造了完全独立的品牌、名称和性格，构建了强大的糖果帝国。 - **1924 年**：Milky Way 推出首年营收为 80 万美元。 - **1932 年**：大萧条低谷期，玛氏总营收逆势攀升至 2,500 万美元。 - **产品策略**：通过微调配方打造差异化独立品牌（Snickers、Three Musketeers、Milky Way），而非单一品牌下的口味变体。 ### [01:08:03](https://www.youtube.com/watch?v=GyWJeY55x-8&t=4083s) 父子决裂：征服世界的野心与放逐欧洲 1932 年面对爆炸式增长的业务，父子两人的理念爆发了不可调和的冲突。Forest 坚信必须全力踩死油门、加大投资击垮竞争对手，甚至叫板 Hershey；而老 Frank 则已心满意足。根据 Forest 的回忆，父亲对他说：“我们钱已经挣得够多了，我们有飞机、有钓鱼度假屋、有马匹，还要那么多干嘛？”而 Forest 的回答则是掷地有声的：“我想征服整个该死的世界（I want to conquer the whole goddamn world）！” Forest 向父亲提出最后通牒：既然你想安享晚年，就把公司三分之一的股份分给我来掌管，你保留三分之二继续享乐，我会让你变得更富有。然而，老 Frank 愤怒地拒绝了。在老 Frank 看来，公司是他白手起家一手创建的，而 Forest 才刚来不久就狮子大开口索要三分之一股份；此外，公司内部的员工和管理者普遍偏向温和、放权的老 Frank，十分厌恶作风雷厉风行、严苛压榨的 Forest。更何况，老 Frank 此时已组建新家庭，有了妻子 Ethel 和女儿 Patricia。双方爆发了激烈争吵，Forest 甚至愤怒地对父亲爆粗口，让他把公司“塞进自己的屁股里（stick his business up his ass）”。随后 Forest 决定彻底离开美国，去另一大洲开辟自己的疆土。老 Frank 在门前给了他两样临别礼物：50,000 美元的现金，以及 Milky Way 配方的海外独家使用权（仅限配方，不能使用 Milky Way 的品牌名称）。Forest 撂下一句再也不会联系的狠话，远走欧洲。父子俩从此天人永隔——仅仅一年后，年仅 50 岁的老 Frank 在芝加哥工厂突然倒地，死于肾衰竭；而远在欧洲的 Forest 甚至没有赶回国参加父亲的葬礼。 ```mermaid flowchart TD accTitle: 父子经营理念分歧与决裂流程 accDescr: 展示老 Frank 与 Forest 之间的理念分歧，最终导致股权谈判破裂和 Forest 出走欧洲的过程。 subgraph Ideology["1932年经营理念分歧"] Frank["老 Frank Mars 安于现状，享受财富 （飞机、农场、赛马）"] Forest["Forest Mars 极度扩张，征服世界 （全面投资对抗 Hershey）"] end subgraph Dispute["冲突爆发与最后通牒"] Proposal["Forest 索要 1/3 股权并掌管运营 老 Frank 保留 2/3 股权"] Rejection["老 Frank 拒绝提议 公司员工站在老 Frank 一边"] end subgraph Departure["彻底决裂与海外放逐"] Exit["Forest 爆粗决裂，断绝父子关系"] Gifts["带走临别资产： 1. 50,000 美元现金 2. Milky Way 独家海外配方权"] Outcome["老 Frank 次年突发肾衰竭去世 Forest 留在欧洲未出席葬礼"] end Ideology --> Dispute Proposal --> Rejection Rejection --> Exit Exit --> Gifts Gifts --> Outcome ``` ### [01:11:31](https://www.youtube.com/watch?v=GyWJeY55x-8&t=4291s) 赞助商插播：Cruso 与 GPU 云基础设施的差异化竞争在进入 Forest 传奇的欧洲历程之前，节目接入了赞助商 Crusoe 的介绍。Crusoe 是一家致力于气候协同的 AI 基础设施公司，专门为 AI 工作负载建设和运营 GPU 数据中心，并利用原本会被白白浪费甚至作为温室气体排放的廉价伴生能源（如油田放空燃烧的天然气，flared gas）来发电。针对为什么在 2024 年仍有可能出现挑战传统云巨头（Hyperscalers）的新云服务商，节目分析了 GPU 云计算所带来的“逆向定位”（Counter-positioning）优势。超大规模云厂商在过去二十年中建立的传统云基础设施，对于 GPU 集群来说并不适用。两者的核心差异主要体现在两个维度： - **选址逻辑（Location）**：传统超大规模数据中心必须靠近互联网骨干网节点，以保障电商等低延迟业务；但 99% 的 AI 训练任务对网络延迟完全不敏感。Crusoe 将数据中心建在偏远的能源产地（如油气放空燃烧现场），不仅降低了电力成本，还实现了极高的单点绝对功率密度，满足大规模 GPU 集群的需求。 - **散热与冷却（Cooling）**：AI 训练产生巨大的热量，传统云数据中心所依赖的风冷/空调系统（Air cooling）在应对极高密度的超大 GPU 集群时已难以为继。 ### [01:13:46](https://www.youtube.com/watch?v=GyWJeY55x-8&t=4426s) Crusoe 赞助与 AI 基础设施的直接芯片液冷技术在本节开篇，节目完成了一段关于赞助商 Crusoe 的讨论。Ben 和 David 探讨了数据中心内部的创新构架：Crusoe 建造的数据大厅（Data Halls，即数据中心内成排的机架）采用了直接芯片液冷技术（direct-to-chip liquid cooling）。液态冷却剂通过管道直接泵入机架，送达直接安装在每个芯片表面的冷板热交换器上。这种尖端设计让现有的传统超大规模云厂商（hyperscalers）在其存量数据中心中极难复刻。因此，Crusoe 的客户可以获得扩展性更好、GPU 集群更大、故障率更低的 AI 基础设施。在训练参数规模庞大的尖端大模型时，这不仅仅是降低使用成本或提高效率，往往直接决定了任务能否顺利完成的生死差异。作为投资人和合作伙伴，Ben 与 David 强烈推荐了该公司。 ### [01:14:50](https://www.youtube.com/watch?v=GyWJeY55x-8&t=4490s) 奔赴欧洲：小弗雷斯特·玛氏隐姓埋名进厂学艺叙述回到玛氏家族的核心主线上。在被父亲老弗兰克·玛氏（Frank C. Mars）打发离开美国后，小弗雷斯特·玛氏（Forrest Mars Sr.）开启了他在欧洲长达近十年的奋斗征程。1932 年底，小弗雷斯特携妻子和幼子（小弗雷斯特二世，Forrest Jr.）首先抵达法国巴黎。在尝试了几个小生意之后，弗雷斯特意识到，如果自己真想打败父亲、建立一家属于自己的商业帝国，就必须掌握父亲至死都不懂的关键核心技能——学会如何真正制造巧克力。正如弗雷斯特日后那句名言所言："你可以雇佣律师、雇佣会计师，你可以雇佣广告人员或金融专家，但如果你想发大财，你就必须懂得如何制造产品；你休想雇任何人来替你造产品让你发财，他们只会为自己造产品发财。" David 与 Ben 感叹，弗雷斯特简直是个不折不扣的狠角色（"freaking G"），他深知必须掌握最稀缺的硬核工艺。于是，在 1933 年初，弗雷斯特举家从巴黎迁往瑞士，向欧洲顶尖的巧克力大师学习。他先后进入生产三角巧克力（Toblerone）的让·托布勒（Jean Tobler）工厂，以及巧克力工业始祖雀巢（Nestlé）的工厂打工。弗雷斯特完全隐藏了自己的身份，没有对任何人透露自己来自美国富豪家庭、结交杜邦家族、甚至曾主导运作过规模 2500 万美元企业的事实。正如他后来轻描淡写所说的："他们从来没问过。"他没有谋求任何管理职务，而是直接以普通流水线工人的身份进厂，亲手操作机器、观察化学反应机制，从底层摸透制作巧克力的科学与工艺。 - **阶层反差**：常春藤盟校毕业、家境巨富的弗雷斯特，在 1930 年代选择拖家带口跨洋远赴瑞士，在语言不通的工厂充当蓝领流水线工人，只为掌握工业核心壁垒。 - **美欧巧克力科学的差距**：根据《Emperors of Chocolate》一书的描述，当时的美国巨头好时（Hershey）虽然掌握了工业化量产配方，但本质上依靠试错摸索，缺乏真正的底层科学认知（例如好时在宾夕法尼亚州以外建立第一座分厂时，就因为无法理解赋予风味的化学酸味反应而调配不出相同的口味）；相反，以雀巢为代表的欧洲糖果商在化学与制造科学上处于绝对领先地位。 ### [01:19:05](https://www.youtube.com/watch?v=GyWJeY55x-8&t=4745s) 斯劳建厂与玛氏棒（Mars Bar）的诞生 1933 年底，弗雷斯特确信自己已彻底掌握了巧克力制作的奥秘。他带着全家迁往英国，用父亲给的 5 万美元在伦敦以西约 20 英里的工业小镇斯劳（Slough，紧邻如今的希思罗机场）租赁厂房开工。一家人就住在工厂上方的一间单间公寓里，生活极其简朴。弗雷斯特依据英国本地市场的口味对 Milky Way 的配方进行了改良——相比美国版本，英国人口味偏好更高的含糖量，并且对麦芽糖麦精（malt）的风味不感兴趣。因为弗雷斯特没有北美 Milky Way 的品牌商标命名权，他顺理成章地将这款改良产品命名为"玛氏棒"（Mars Bar）。这款产品迅速席卷英国，成为英国历史上最畅销的糖果棒之一。虽然日后两地玛氏业务最终合并为一家公司，但历史割裂造成的品牌混乱至今仍在延续：如今在英国购买的 Mars Bar 与美国的 Milky Way 本质同源（虽然甜度和麦芽度略有差异）；而在英国市场名为 Milky Way 的糖果，在美国对应的实际上是"三剑客"（Three Musketeers）；至于士力架（Snickers），早期在英国则被称为 Marathon，直到后来才全球统一更名。 ```mermaid flowchart TD accTitle: 玛氏早期产品美英谱系对照 accDescr: 展示弗雷斯特·玛氏在英国斯劳基于美国配方改造出的核心产品及名称对应关系。 subgraph US["美国本土市场 (老弗兰克主导)"] US_MW["Milky Way\n(高麦芽、相对低糖)"] US_3M["Three Musketeers"] US_SN["Snickers"] end subgraph UK["英国市场 (小弗雷斯特开创)"] UK_MB["Mars Bar\n(多糖、少麦芽、吉百利巧克力外层)"] UK_MW["Milky Way (英国版)"] UK_MA["Marathon (后统一为 Snickers)"] end US_MW -->|配方改良与改名| UK_MB US_3M -.->|海外对应品牌| UK_MW US_SN -.->|原英国名称| UK_MA ``` ### [01:20:25](https://www.youtube.com/watch?v=GyWJeY55x-8&t=4825s) 借力吉百利外包与英国工业突围即便掌握了顶尖的巧克力科学，手握仅有的 5 万美元初创资本的弗雷斯特依然无法立刻投资极度重资产的研磨与精炼设备，更别提建立全球可可豆采购供应链（当时嘉吉 Cargill 等跨国大宗商品巨头尚未形成成熟的全球原料流动性支持）。弗雷斯特复制了当年在美国依赖好时的模式，选择与英国本土巨头吉百利（Cadbury）达成合作，由吉百利为 Mars Bar 提供巧克力外皮涂层原料。这项外包决策兼顾了资本效益与市场适配：吉百利的巧克力本身就符合英国人习惯的本地口味。但对弗雷斯特来说，外包只是权宜之计，他常挂在嘴边的一句座右铭是："我不是个做糖果的，我是个具有帝国思维的人（I'm not a candy maker; I'm empire-minded）。" 从 1934 年投产到 1939 年短短五年内，玛氏英国（Mars UK）迅速成长为仅次于吉百利（Cadbury）和朗特里（Rowntree）的英国第三大糖果制造商。这一惊人扩张也是美国冷酷进取资本主义对欧洲传统商业生态的冲击。吉百利与朗特里两大家族均为虔诚的贵格会信徒（Quakers），奉行关爱社区与劳工福利的清教主义理念（例如吉百利在城外兴建了带有乌托邦色彩的模范工厂城镇，米尔顿·好时早年正是受其启发修建了好时镇）。面对满怀宗教使命感与道德约束的英国本土企业，咄咄逼人、纯粹追求扩张与效率的弗雷斯特·玛氏犹如一头工业猛兽，迅速在英国市场撕开了一片属于自己的帝国版图。 ### [01:23:54](https://www.youtube.com/watch?v=GyWJeY55x-8&t=5034s) 祈祷于糖果之神：Forrest Mars 的执念与绝对效率在英国打拼的 Forrest Mars 展现出了一种极度冷酷且务实的商业野心：以最高的效率生产、赚取最大的利润，并以最快的速度实现尽可能广泛的分销。这种姿态甚至带有一种法国奢侈品巨头伯纳德·阿尔诺（Bernard Arnault）式的神韵——带着在美国学到的一切工业化精髓，降临欧洲并大杀四方。主播们分享了一则荒诞却极为生动的传闻。由于英国糖果业的竞争对手多具有深厚的宗教背景（如贵格会），多年后当 Forrest 回到美国重新接掌 Mars 公司时，他在管理层会议室里做出了令人瞠目结舌的举动：他直接跪倒在所有高管面前，双手合十高呼：“我是一个有信仰的人，我为银河棒（Milky Way）祈祷！我为士力架（Snickers）祈祷！我为 M&M's 祈祷！”如果说 Forrest 心中真有某种神圣的宗教信仰，那绝对就是他的巧克力、糖果以及后来开拓的狗粮帝国。 ### [01:25:03](https://www.youtube.com/watch?v=GyWJeY55x-8&t=5103s) 进军宠物食品：收购 Chappel Brothers 与现代宠业雏形 1934 年，也就是 Forrest 在英国推出 Mars Bar 仅仅一年之后，他做出了一个在当时看似匪夷所思的决定——收购了一家名为 Chappel Brothers 的小型英国公司，该公司生产名为“Chappie”的罐装狗粮。在 20 世纪 30 年代，商业化宠物食品的概念几乎是一片空白。从古至今，猫狗的日常饮食全凭人类餐桌上的残羹剩饭；吃完饭随手扔根骨头或火腿，就是清理餐桌的常规方式。关于 Forrest 为何在宠物食品市场尚且晦暗未明时便果断出手，商业史上的公开记载极少。这既展现了他极度超前的商业洞察力，也反映了产业逻辑的相通：随着大萧条过去和现代社会演进，人们与宠物的关系正在重塑，专用宠物食品必将迎来爆发；另一方面，罐装狗粮的流水线生产与零食制造在规模经济和工业流程上有着极高的协同效应。这笔收购在短短两三年内便实现盈利，宠物业务带来的强劲现金流迅速反哺了 Mars Bar 在欧洲大陆的扩张。 ```mermaid flowchart TD accTitle: Mars 早期双轮驱动模式 accDescr: 1934年收购Chappel Brothers后，宠物食品的高利润现金流支持了Mars Bar的快速扩张 subgraph Operations ["工业化制造引擎"] direction TB Candy["糖果产线 (Mars Bar)"] PetFood["罐装宠物食品 (Chappie 狗粮)"] end subgraph Finance ["资金循环飞轮"] PetCash["宠物业务快速盈利 高毛利现金流"] Expansion["欧洲市场扩张 大规模分销"] end PetFood --> PetCash PetCash --> Expansion Expansion --> Candy ``` - 1934 年接触并买下 Chappel Brothers，1935 年正式整合该业务。 - 改变了数千年以来宠物仅吃餐桌残渣的习惯，成为全球现代宠物食品工业的奠基者之一。 - 宠物食品业务早期利润极为丰厚，直接承担了资助巧克力业务扩张的“现金牛”角色。 ### [01:27:54](https://www.youtube.com/watch?v=GyWJeY55x-8&t=5274s) 斯劳工厂奠定文化基因：原则一·质量（Quality）在英国斯劳（Slough）建立的工厂，不仅是 Mars 的生产基地，更是其核心企业文化的诞生地。Forrest 在这里起草了名为“The Mars Way”的文件，后来逐步演变成为贯穿整座商业帝国的“五大原则”（The Five Principles）。这一套原则对 Mars 员工的影响极为深刻，甚至被当作宗教教条般信奉与背诵，其地位毫不逊于现代亚马逊的领导力准则（Leadership Principles）。第一大原则是“质量”（Quality）。Forrest 对质量的偏执涵盖了原料、成品、包装纸以至于终端零售货架的陈列展示。他很清楚糖果是一种典型的冲动型消费品（impulse purchase），包装的质感、陈列的位置以及品质的一致性直接决定了消费者的购买欲望。关于他的暴脾气与品质强迫症，流传着许多经典故事：一旦发现包装纸上有瑕疵，他会直接将它狠狠砸在高管办公室的玻璃墙上怒吼。尤为超前的是，早在 20 世纪 30 年代，Forrest 就在斯劳工厂推行了类似丰田生产方式（TPS）的安灯系统（Andon）：全厂任何一名普通工人只要发现任何零件移位、卫生死角或可能影响品质的瑕疵，都有权立刻拉停整条流水线；出现严重问题时，整批产品都会被销毁以绝后患。然而，Mars 的质量哲学并非为了追求品质而不计成本，它追求的是在特定价格区间的“卓越性价比”（Value for money）——通过规模经济以同样的售价提供压倒竞争对手的高品质，从而形成永久复利的竞争护城河。 ### [01:31:23](https://www.youtube.com/watch?v=GyWJeY55x-8&t=5483s) 原则二·责任（Responsibility）与全勤打卡文化第二大原则是“责任”（Responsibility）。尽管 Forrest 性情严苛且精力旺盛，甚至精通巧克力的每一道熬制工序，但他深知要打造像杜邦（DuPont）或通用汽车（General Motors）那样的工业帝国，绝不可能依靠事无巨细的微观管理（micromanagement）。要让最优秀的人才在异国他乡的简陋工厂里竭尽全力，最直接有效的办法就是支付远超同行的报酬。在早期，Mars 员工的综合收入往往能达到行业标准薪资的 3 到 4 倍（即便在现代，也保持着行业内前列的高溢价）。这种高薪并不是固定底薪，而是高度与公司整体经营业绩挂钩的绩效奖金，使得员工的心态更像是与公司休戚与共的合伙人。在整个公司的奖金分配体系中，几乎没有任何主观的个人绩效考核，唯独存在一个硬性指标——准时出勤。在斯劳工厂，包括 Forrest 本人在内的所有人，上下班都必须严格打卡；全年只要从未迟到过一次，就可以直接拿到额外的 10% 全勤奖金。这种不论职位高低一律打卡的平等规范，甚至一直延续到了现代 Mars 的首席执行官身上。 - 薪资政策：早期提供高达行业标准 3~4 倍的整体报酬，如今也维持在同行 2 倍左右或至少高出 10% 的水平。 - 激励机制：以公司整体业绩指标决定绝大部分年终分红，在不景气年份灵活下调，避免死板的人工成本刚性。 - 唯一个人指标：严格记录出勤打卡，整年零迟到即可获得 10% 的个人专项奖金。 ### [01:33:39](https://www.youtube.com/watch?v=GyWJeY55x-8&t=5619s) 极致扁平与开放：没有特权与首创“开放式办公” Forrest Mars 对公司内部文化的塑造，带有极其强烈的平等主义和反叛色彩。在 Mars 内部，每天不能迟到，如果全勤不迟到，员工能拿到 10% 的出勤奖金；而且从早年在英国到后来回到美国，全公司上下每个人都被称为“同事”（Associate）。虽然大家在对外事务中有不同的业务分工和对外头衔，但对内一律平等。更绝的是，公司内部没有任何针对高管的特权待遇（Perks）——既没有专属的行政停车位，也没有任何独立的高管办公室。或者更准确地说，Mars 内部根本就不存在“办公室”这个东西。这一举措彻底打破了传统企业的层级区隔。两位主播戏称，他们在录制 Meta 那期节目时曾以为 Facebook 是全球第一家推行开放式办公（Open Office）的公司，实际上早在 1930 年代，Mars 就已经是第一家全面实行开放式办公的企业。在 Mars 的每栋大楼里，布局全都是彻底打通的开敞空间，每名员工都配发一张一模一样的黑色金属办公桌。更夸张且延续至今的传统是，办公室里只有极少数的会议室——因为他们极度厌恶幻灯片演示和开会；即使偶尔不得不开会，会议室也是完全没有门的，内部绝不允许保留任何隐私。这种内部极度透明平等的文化，与 Mars 对外呈现出的神秘、深居简出的形象构成了巨大反差。Forrest 如此决绝地消灭特权，很大程度上也是在反抗他父亲当年在芝加哥建造的那座奢华工厂所代表的一切。Ben 分享了一个有趣的现代细节：他曾通过 Google 地图查看 Mars 近期新建的一座 M&M's 生产兼企业办公园区，发现其建筑平平无奇，位于高速公路旁的荒凉地段（邻近亚马逊物流中心），内部是典型的低矮吊顶、荧光灯管和廉价办公桌，唯一的外部装饰就是在停车场向人招手的两只巨大 M&M's 玩偶。 - **全员统称**：内部没有任何官僚头衔，一律称作“Associate”（同事）。 - **特权归零**：严禁高管专属车位、专属办公室或私人休息室。 - **无门会议室**：极力限制开会与做 PPT，会议空间无门，彻底杜绝内部不透明。 - **选址与装潢务实**：办公与制造紧密结合，装潢简朴实用，拒绝华而不实的铺张。 --- ### [01:35:59](https://www.youtube.com/watch?v=GyWJeY55x-8&t=5759s) 原则之三与之四：互惠共赢与 TG Rose 的 ROTA 哲学紧接着，播客梳理了 Mars 五大原则中的第三条“互惠”（Mutuality）与第四条“效率”（Efficiency）。Forrest 固然极具竞争欲与侵略性，但他深知商业是一个长期共生的生态系统。零售商、原料供应商与分销商至关重要，只有当这些合作伙伴在与 Mars 合作时能赚到钱，并且赚得比帮竞争对手卖货/供货还要多，他们才会长期绑定在一起，从而为 Mars 积累起滚雪球般的复利优势。第四个原则“效率”，则直接源于 Forrest 对商业管理理论的狂热痴迷。在 1930 和 1940 年代，几乎没有商界人士去正经研读管理学书籍（当时连二级市场投资也多被视作纯粹的投机赌博，直到格雷厄姆和巴菲特才将内在价值分析与现金流折现带入主流）。在旅居英国期间，Forrest 研读了 T. G. Rose 所著的教科书《Higher Control in Management》（管理的高阶控制），其副标题为“一种提供工商业运营事实与数据以用于管理目的的方法”。这本书的核心观点彻底重塑了 Forrest 的经营哲学：管理者的核心关注点绝不应该是单纯的营收、利润或增长率，而必须是“总资产回报率”（ROTA，Return on Total Assets）。 ```mermaid flowchart TD accTitle: ROTA Calculation Method accDescr: 对比传统教科书与 Mars 独特的重置成本 ROTA 计算方式 subgraph Standard["传统教科书标准做法"] A1["净利润 ($)"] --> B1["除以: 资产负债表历史账面成本"] B1 --> C1["ROTA (受折旧与历史低价虚饰)"] end subgraph MarsWay["Forrest Mars 的严格实践"] A2["净利润 ($)"] --> B2["除以: 资产即时重置成本 (Replacement Cost)"] B2 --> C2["真实 ROTA (紧盯当前市场价值与重置代价)"] end ``` 教科书上对 ROTA 的标准定义是：净利润（美元）除以公司固定资产在资产负债表上的账面价值。但 Forrest 认为按历史建造成本入账纯属自欺欺人——十年前建一座工厂花多少钱毫无意义，真正重要的是它在当下的价值。因此，Mars 至今仍然采用“重置成本”（Replacement Cost）来动态重估所有固定资产与工厂的当前市值。如果工厂凭空消失，按今天的造价买回来或将其变现值多少钱，分母就是多少。这种极为严苛的考核，确保了管理层是在真正高效地榨取资产产能，而非依赖历史折旧产生的虚假高效率。两位主播在这里展开了即兴调侃：如果给播客《Acquired》计算 ROTA，分子是赞助商利润，分母究竟该放廉价的麦克风等硬件，还是放 Acquired 的品牌无形资产，亦或是两位主播被赋予特定价值的稀缺时间。 --- ### [01:40:26](https://www.youtube.com/watch?v=GyWJeY55x-8&t=6026s) 18% 的平衡木艺术与极致人效飞轮对于这项效率指标，Forrest 在 Mars 设立了一个极其精准且严苛的考核线：每个业务部门、每座工厂的 ROTA 目标常年锚定在 18% 左右。这意味着任何一笔固定资产投资，必须在 4 到 5 年内完全收回投资（Payback Period）。更神奇的是，Mars 既不希望这个数字低于 18%，也不希望它高于 18%： - **低于 18%**：说明资产闲置或运营效率低下，未能榨取出应有的资本产出； - **高于 18%**：说明在市场上赚取了过多利润，这不仅损害了消费者利益，也意味着公司在品牌营销、广告投放和渠道让利上的再投资力度不够。主播引用了 Worldly Partners 的 Arvin Navaratnam 提供的深度研究数据：Mars 的员工总数比最直接的竞争对手好时（Hershey）少大约 30%，但其人均产出却冠绝行业。以 1990 年为例，Mars 的人均创造收入高达 42.9 万美元，而好时仅为 22.8 万美元，领先幅度巨大。这种极致效率首先建立在工业化生产的流水线奇迹上——工厂实行 24 小时三班倒连轴转，芝加哥工厂如今生产 Fun Size 的迷你 Milky Way 巧克力排，速度可突破每分钟 5,500 块。更重要的是，Mars 创造了一个闭环的“人效飞轮”：极高的单位人效使公司有底气向基层员工发放远高于行业水平的基本薪水和全勤奖金；优厚的报酬极大提升了员工忠诚度，降低了人员流动率与招聘成本，沉淀了宝贵的技术诀窍（Tribal Knowledge）。同时，公司把利润极其激进地重新反哺回业务，自主研发定制化的先进生产设备，这种再投资不仅不断抬高制造壁垒，还在利润结算前降低了企业所得税负担。 ```mermaid flowchart LR accTitle: Mars Efficiency Flywheel accDescr: 展示 Mars 通过高薪、低流失率和资本再投资构成的良性效率飞轮 subgraph Production["自动化与高产能"] A["24小时连续高强度制造"] --> B["超高人均产出 (远超好时)"] end subgraph People["人力与激励机制"] B --> C["高于行业标准的薪酬与奖金"] C --> D["极低人员流动率 / 留存沉淀经验"] D --> A end subgraph Reinvestment["研发与税务优化"] B --> E["利润大举再投资 / 定制设备研发"] E --> A E --> F["减少账面结余纳税负担"] end ``` ### [01:43:28](https://www.youtube.com/watch?v=GyWJeY55x-8&t=6208s) 第五项原则：自由（Freedom）与极度隐秘的家族控制在剖析完高效与互利等原则后，讨论来到了玛氏著名的五大原则（The Five Principles）中的最后一项目——“自由”（Freedom）。玛氏对待利润的方式颇有约翰·马龙（John Malone）和沃伦·巴菲特（Warren Buffett）的影子：他们尽可能把资本留在企业内部再投资，而非将其确认为账面利润分红或缴税。对于早期的弗雷斯特·玛氏（Forrest Mars Sr.）而言，“自由”最初或许仅仅意味着摆脱父亲弗兰克的阴影、成为一个独立自主的人、向所有人证明自己。然而随着时间推移，“自由”演变为玛氏家族的绝对所有权、坚决不上市、作为一家全私有公司运营，并且拒绝承担债务。在弗雷斯特之后的下一代（即约翰和弗雷斯特二世），“自由”更进一步演变成对“极度隐私”的执念。数十年来，玛氏家族成员拒绝拍摄任何照片，唯恐照片被公开发表。著名的《华盛顿邮报》（The Washington Post）商业调查记者乔尔·格伦·布伦克利（Joel Glenn Brenner）撰写关于玛氏的报道时，好不容易抓拍到了约翰和弗雷斯特二世在公共场合的照片——这极可能是兄弟俩有生以来第一次被媒体公开拍到。然而玛氏家族看到成稿后大为光火，不仅立刻解雇了外部公关顾问，甚至直接找到《华盛顿邮报》的自由摄影师，自掏腰包砸下 20,000 美元买断这些照片的全部版权，以确保底片绝不会被二次刊发。节目指出，从宜家（IKEA）到 Meta 的双重股权结构，再到 Acquired 播客本身，完全的股权所有权或董事会控制权就是最高级别的自由： - **跨周期超长期投资**：如果坚信 10 年后的远景，公司完全可以承受未来 10 年之间业绩剧烈波动和起伏，有能力牺牲短期利益来做次优选择（sub-optimize the short term）。 - **非传统的考核指标**：正因为不必讨好华尔街的季度财报，玛氏才能够将资产回报率（ROA）作为日常的核心运营指标，而非单纯追求会计层面的短期利润率。 ```mermaid flowchart TD accTitle: 玛氏对自由原则的演变 accDescr: 展示玛氏公司自由原则从弗雷斯特个人独立演变为家族绝对控制与极度隐私的过程 subgraph ForrestEra["弗雷斯特初期"] A["脱离父亲阴影"] --> B["自主创业与证明自己"] end subgraph CorporateControl["企业制度层面"] B --> C["100% 家族全资控股"] C --> D["不上市 / 零债务 / 聚焦长期 ROA"] end subgraph FamilyPrivacy["家族文化层面"] C --> E["绝对隐私防护"] E --> F["买断媒体抓拍照版权"] end ``` --- ### [01:45:21](https://www.youtube.com/watch?v=GyWJeY55x-8&t=6321s) 二战阴云与被迫撤离英国：阴谋论还是战略回流？回到 1930 年代弗雷斯特在英国的奋斗史。短短数年内，他在斯劳建立的业务取得了惊人的成功，到 1930 年代末，玛氏英国已经成长为全英第三大糖果糖果公司。然而，1930 年代末期二战的爆发彻底打乱了平静。据弗雷斯特本人的说法，英国政府为了给即将打响的战争筹集军费，决定对在该国居住的所有外国居民征收巨额重税。弗雷斯特深信，这背后正是吉百利（Cadbury's）和朗特里（Rowntrees）这两家本土巨头在议会进行游说的结果，目的就是为了借税收之手将这个威胁其生意的美国人彻底赶出英国。尽管行业竞争对手借机排挤的说法合情合理，但主持人分析认为，弗雷斯特内心其实一直渴望杀回美国本土市场，战争税只是给了他一个完美的时机。1939 年，弗雷斯特做出了一个令人难以置信的决定：他将英国所有蒸蒸日上的业务和工厂托付给当地管理层，自己带着全家启程返回美国。在战火纷飞的 1939 年，敢于把海外家业交给员工看管、并坚信跨洋之后自己仍能掌握产权，这展现了弗雷斯特对其英国团队忠诚度的极大自信——如果吉百利真以为这样就能挤垮玛氏，他们显然低估了弗雷斯特建立的铁血凝聚力。 --- ### [01:47:40](https://www.youtube.com/watch?v=GyWJeY55x-8&t=6460s) 芝加哥的闭门羹与秘密武器：糖衣巧克力的灵感回到美国后，弗雷斯特的第一站自然是芝加哥的玛氏总部，上演了一出“亲爱的，我回来了（Honey, I'm home）”。然而老弗兰克已在数年前过世，此时的芝加哥玛氏由弗雷斯特的继母（另一位埃塞尔，Ethel V. Mars）及其同父异母的兄弟（担任总裁兼 CEO）牢牢掌控。他们对弗雷斯特厌恶至极，将他拒之门外，坚决不准他插手公司任何业务。 - 当时芝加哥玛氏的股权结构中，继母持有最大份额，弗雷斯特同父异母的妹妹帕特里夏（Patricia）及其子女持有大量股份，部分股权还在员工手中。 - 弗雷斯特继承到的股份大约仅有 10% 到 20%，完全无法撼动控制权。面对继母家族的冷眼，弗雷斯特再次展现出倔强的野性：“去你们的！我能从零起步证明你们一次，我就能回美国从零起步再证明你们一次！”相比于当年在英国的小市场隐蔽发展，如今他要在全世界竞争最残酷的大舞台——美国，与拥有庞大资源的旧玛氏正面对决。但他毫不胆怯，因为他在离开欧洲前带回了一件秘密武器。在西班牙内战（Spanish Civil War）期间，弗雷斯特敏锐地注意到士兵们在吃一种新颖的巧克力： - **起源与法式糖果（Dragée）**：这种糖果源自法国传统糖果“Dragée”，最初据说是为法国贵族女性设计的，为了让名媛们戴着昂贵的白手套吃巧克力时不会沾上化开的污渍。 - **硬质滚糖包衣工艺（Hard Panning）**：其本质是在小圆块巧克力外层裹上一层坚硬的糖浆外壳（Hard Panning），使其在高温环境或手心握持下都不会融化。弗雷斯特坚信这种“只溶在口，不溶在手”的糖衣巧克力具备席卷全球的巨大潜力，而这正是后来风靡全球的 M&M's 的雏形。 --- ### [01:50:31](https://www.youtube.com/watch?v=GyWJeY55x-8&t=6631s) 赞助插播：Statsig 助力 Bluesky 快速增长在正式切入 M&M's 的诞生故事之前，节目分享了赞助商 Statsig 及其知名客户 Bluesky 的产品实验案例。作为目前势头迅猛的去中心化开放社交网络，Bluesky 主打用户自主选择权（例如自由定制信息流、更换客户端且粉丝数据随走等），在近期迎来了爆发式增长，仅数周之内便涌入了 1,000 万新用户。 Bluesky 团队全面采用 Statsig 进行产品实验、用户行为分析与功能灰度发布，其中两个典型应用场景包括： - **突发流量异常定位**：在巴西最高法院封禁 X（原 Twitter）后，Bluesky 通过 Statsig 监控各语言发帖指标的看板，第一时间发现葡萄牙语内容暴增，迅速识别并承接了这波来自巴西的泼天流量。 - **时间线排序的科学验证**：许多老派社交网络用户渴望恢复纯粹按时间倒序（Chronological）排列关注流，Bluesky 使用 Statsig 进行了严格的 A/B 测试，用数学与数据证明了用户确实热爱这种摒弃强算法干预的浏览体验。 Bluesky CTO 评价指出，Bluesky 原本以为作为一个小型团队没有足够的资源维护一套完备的 A/B 测试框架，但 Statsig 让这一切变得低门槛且可落地，成为团队做产品决策时最不可或缺的分析工具。在介绍完 Statsig 的创业公司扶持计划后，主持人重新将话题转回弗雷斯特与 M&M's 的传奇序幕。 ### [01:53:34](https://www.youtube.com/watch?v=GyWJeY55x-8&t=6814s) 花生酱的美国特色与福斯特的“复仇前奏” 录制现场的主持人们一边吃着杏仁 M&M's 和花生酱 M&M's 庆祝，一边聊起了一段坊间逸闻：为什么在美国市场潜力本该巨大的“花生酱 M&M's”，其市场规模却没有想象中那么惊人？传闻称，老福斯特·马尔斯（Forrest Mars Sr.）的两个儿子——后来接班并推出该产品的小福斯特（Forrest Jr.）和约翰·马尔斯（John Mars）是在英国长大的，他们根本无法真正理解美国人对“花生酱配巧克力”这种风味的狂热痴迷。这种风味组合可以说是纯粹的美国特色，最初由 Reese's 发扬光大——而 Reese's 本身也是一段传奇：它是由一位赫尔希（Hershey）前员工在赫尔希镇附近自立门户创办的独立糖果公司，后来又被赫尔希全资收购。时间转眼来到 1939 年 8 月。老福斯特·马尔斯带着全家离开欧洲返回美国，此时他已在脑海中筹划好一整套精密的商业复仇计划，目标正是击败当年将他扫地出门的家族旧部（即芝加哥马尔斯公司）。他的第一站极为耐人寻味——老福斯特直接动身前往宾夕法尼亚州的赫尔希镇。 --- ### [01:54:38](https://www.youtube.com/watch?v=GyWJeY55x-8&t=6878s) 赫尔希工厂里的“乔布斯式”戏剧性开场老福斯特展现了他标志性的行事风格：他隐姓埋名、未做任何预约，直接以普通游客的身份买票参加了赫尔希巧克力的公众工厂导览。参观结束后，他走到导游面前，语气平静但坚定地要求见威廉·默里（William Murrie）。威廉·默里是赫尔希公司的总裁兼首席运营官，也是创始人米尔顿·赫尔希（Milton Hershey）长达数十年的副手与实际操盘人——此时年事已高的米尔顿·赫尔希早已退居二线，精力几乎全放在小镇建设、孤儿学校和赫尔希信托基金上。当工作人员疑惑地询问这位不速之客究竟是谁、凭什么要见默里先生时，福斯特只冷冷地抛下一句：“你就告诉他，马尔斯来了。他只需要知道这个。”在当时，赫尔希虽然依然是芝加哥马尔斯公司的主要巧克力原料供应商，但赫尔希管理层也逐渐意识到，马尔斯正在成长为一个可怕的终端竞争对手。福斯特这句话里的“马尔斯”，显然是在故意利用芝加哥马尔斯的招牌唬住门卫，而当时芝加哥马尔斯的实际掌门人早已是福斯特继母的同母异父弟弟。这一计策果然奏效，默里破例接见了他。两人此前素未谋面，但默里显然对福斯特的名字如雷贯耳。在默里疑惑于这位被放逐的大少爷找上门有何贵干时，福斯特上演了一幕堪比“史蒂夫·乔布斯发布初代 iPhone”的极致戏剧化戏码：他不动声色地从口袋里掏出一块手帕，庄重地铺在默里的办公桌上，轻轻揭开——里面赫然包裹着一颗颗色彩鲜艳、裹着脆硬糖壳的糖衣巧克力豆（dragée chocolates）。福斯特示意默里尝一颗，默里尝过后点头表示味道确实不错。接着，福斯特丢出了那记震撼的重磅炸弹：“如果我告诉你，这几颗糖在我口袋里，一路从纽约坐火车颠簸到这里，在八月盛夏酷热潮湿的天气里暴露了几个小时，又跟着我全程走完了你们的工厂参观，自始至终连一点融化的痕迹都没有，你会怎么想？它尝起来像融化过的样子吗？”默里顿时坐直了身体，彻底被眼前的产品击中了。 --- ### [01:57:26](https://www.youtube.com/watch?v=GyWJeY55x-8&t=7046s) 商业谋略神作：M&M 联合公司的诞生默里彻底被折服后，福斯特顺水推舟拿出了他构思已久的合作方案：共同成立一家全新的糖果合资企业。在这家公司中，老福斯特持股 80%，而剩余 20% 的股权则归威廉·默里的儿子布鲁斯·默里（Bruce Murrie）所有。福斯特甚至连品牌名都想好了——就叫“马尔斯与默里”，简称 **M&M's**。这项交易在商业史上堪称老福斯特最绝妙的连环套路： 1. **获取不可或缺的生产要素**：福斯特要重返美国向父亲遗留的芝加哥马尔斯复仇，面临资金短缺（英国战前严格的外汇和税收管制导致他无法将巨额利润带回美国）和巧克力原料短缺的死穴。他必须绑死全美最大的巧克力巨头赫尔希。 2. **切中默里个人的最大痛点**：福斯特没有去找米尔顿·赫尔希本人，而是精准瞄准了 66 岁的职业经理人威廉·默里。默里虽位极人臣，但赫尔希公司 100% 归属于赫尔希信托，默里只是一名高级雇员，根本没有家族企业或股权资产可以传承给子嗣。福斯特直接给默里提供了一个为儿子创造财富和商业帝国的合法通道。 3. **巧妙化解利益冲突与合规红线**：如果默里本人直接与福斯特合伙，不仅违反赫尔希的雇佣协议，还会构成严重的竞业与利益冲突，而且在股权谈判上默里也绝不会接受自己只占 20%。但通过把 20% 股权赠予他的儿子布鲁斯·默里，一切合规问题迎刃而解，默里还会心甘情愿地动用赫尔希的全部资源为合资公司保驾护航。 4. **绑定军方采购渠道**：威廉·默里与布鲁斯·默里手中掌握着全美独一无二的稀缺资源——五角大楼和美军军需后勤部的直接采购关系。 ```mermaid flowchart TD accTitle: M&M Limited Partnership Structure accDescr: Diagram showing how Forrest Mars and Bruce Murrie formed M&M Limited with resources from Hershey. subgraph Stakeholders["合作双方与背景"] FM["老福斯特·马尔斯 (手握耐热糖衣巧克力技术/专利)"] WM["威廉·默里 (赫尔希总裁 / 无家族企业可继承)"] end subgraph Company["M&M Limited (合资公司)"] MM["M&M 糖果公司"] end subgraph HersheySupport["赫尔希提供的核心资源"] HS["工业巧克力 & 食糖原材料"] HC["建厂启动资本与技术人员"] MP["军方采购网络 (五角大楼独家直供)"] end FM -->|"出资技术与运营 / 持股 80%"| MM WM -->|"安排儿子布鲁斯·默里持股 20%"| MM WM -.->|"调动赫尔希官方资源"| HersheySupport HersheySupport --> MM ``` 这一协议令人叹为观止：福斯特仅仅带了一个创意和技术设想，赫尔希便全额提供工业巧克力原料、高纯度食糖配额、机械技术支持以及建厂资金，最终福斯特竟然还能独占 80% 的绝对控股权。 --- ### [02:01:03](https://www.youtube.com/watch?v=GyWJeY55x-8&t=7263s) 二战战时配给与 M&M 的军火级红利 1940 年春，福斯特与布鲁斯·默里正式注册成立了 M&M 有限合伙公司（M&M Limited Partnership），并在新泽西州的纽瓦克（Newark）拔地建起了一座崭新的现代化工厂，于 1941 年正式投入量产。正如关于吉百利（Cadbury）的一本传记中所惊叹的那样：老福斯特返回美国的壮举极其不可思议，“他没有得到自己家族的任何支持，却全盘获得了头号竞争对手赫尔希的倾力鼎助”。工厂刚刚投产，历史的齿轮便轰然转向——1941 年底珍珠港事件爆发，美国正式卷入第二次世界大战。战争带来了民用巧克力的极度短缺与全美范围的严格配给制，而美军部队对巧克力的战略需求却爆发式激增。赫尔希作为唯一拥有军方军用巧克力独家供应合同、且具备全国性规模化生产牛奶巧克力能力的巨头，开始全面收紧乃至切断对所有企业级客户的大宗巧克力原料供应——其中首当其冲被卡住脖子的，正是老福斯特心心念念想要复仇的芝加哥马尔斯公司。然而，全美所有企业客户中唯有一家享受绝对豁免：M&M 有限合伙公司。凭借布鲁斯·默里的股东身份，赫尔希源源不断地向纽瓦克工厂输送最高等级的原料配额。在整个二战期间，年轻的 M&M 压根不需要在民用零售市场上寻找销路，它的全部产能几乎 100% 专供美军——陆军航空队（后来的美国空军）是其最大买家，其次是美国陆军和海军。布鲁斯·默里名义上挂帅 M&M 的销售主管，但正如主持人打趣所言，当时他的工作极其纯粹：他不需要打广告或拓展终端零售商，只要跟着父亲威廉·默里对接五角大楼的军需采购官，订单就会像雪片一样飞来。在节目的尾声，主持人提到了大洋彼岸英国听众一定会联想到的另一款经典糖果——朗特里公司（Rowntree's）的“聪明豆”（Smarties）。事实上，糖衣包裹巧克力的工艺并非老福斯特一人独创；朗特里早在 1937 年（比 M&M 在美投产早了足足三到四年，甚至比福斯特离开英国还要早两年）就已经在英国本土推出了 Smarties。但这丝毫不妨碍老福斯特凭借对商业时机的敏锐嗅觉与近乎冷酷的结盟算计，将这项技术在美国打造成二战期间最具传奇色彩的商业印钞机。 - **M&M 品牌名称来源**：取自两位创始合伙人的姓氏首字母——马尔斯（**M**ars）与默里（**M**urrie）。 - **创始股权架构**：老福斯特·马尔斯持股 80%，威廉·默里之子布鲁斯·默里持股 20%。 - **首家工厂落脚点**：1940 年筹建于新泽西州纽瓦克市（Newark, New Jersey）。 - **二战主要客户梯队**：第一大客户为陆军航空队（Air Force 前身），第二大为陆军（Army），其次为海军（Navy）。 - **欧洲同类先驱**：英国朗特里公司（Rowntree's）于 1937 年正式推出 Smarties。 ### [02:04:14](https://www.youtube.com/watch?v=GyWJeY55x-8&t=7454s) 聪明豆（Smarties）与英美糖果的“绅士协议” 关于 M&M's 灵感来源的官方叙事一直称 Forrest Mars Sr. 是在西班牙内战期间受到启发，但两位主持人指出，更符合现实的推论是他在英国期间亲眼看到了朗特里公司（Rowntree's）推出的聪明豆（Smarties），随后急切地想赶回美国推出同类产品。早期 M&M's 采用与英国 Smarties 完全相同的纸筒包装，这很难说是巧合。需要注意的是，英国的 Smarties 是糖衣裹巧克力的甜食（主持人体会过英国亲戚带来的美味），与美国本土那种非巧克力的粉质压片 Smarties 截然不同。据传在雀巢（Nestlé，后收购了 Rowntree）的历史档案中留有确切记录：Forrest 与 Rowntree 的掌门人 George Harris 在西班牙内战期间几乎同时获悉了法式糖衣巧克力（Dragée）的工艺。两人达成了一项“绅士协议”： - **Rowntree** 获得英国本土的糖衣巧克力独占市场； - **Forrest Mars** 获得美国市场以推广同类产品； - 作为交换，Forrest 授予 Rowntree 在加拿大、南非等其他英联邦国家生产与销售 Mars Bar（玛氏排糖）的权利。不过在当时，这些划分协议被迅速爆发的第二次世界大战完全打乱。随着战事蔓延，全球几乎所有的巧克力产能都被各交战国政府征调，优先配给军方。 ```mermaid flowchart TD accTitle: Forrest Mars 与 Rowntree 的跨大西洋市场协议 accDescr: 展示 Forrest Mars 与 Rowntree 就糖衣巧克力及 Mars Bar 市场进行划分的绅士协议结构 subgraph Deal["绅士协议 (Gentleman's Agreement)"] direction TB Smarties["糖衣工艺 / Dragée"] --> RowntreeUK["Rowntree 独占英国本土市场 (Smarties)"] Smarties --> ForrestUS["Forrest Mars 独占美国市场 (M&M's)"] MarsBar["Mars Bar 商业授权"] --> CommonWealth["Rowntree 获加拿大、南非等英联邦国家生产销售权"] end ``` --- ### [02:06:07](https://www.youtube.com/watch?v=GyWJeY55x-8&t=7567s) 挥师主食赛道：Uncle Ben's 蒸谷米诞生二战期间，Forrest 一边依靠军方大额订单起步 M&M's、在美国重建商业帝国，一边积极寻找类似于英国 Chappie 宠物食品那样能带来高现金流的副业，以分散风险并反哺糖果业务。他将目光投向了另一个看似不可思议的领域：大米。早在英国时期，Forrest 就结识了一位发明了新型“蒸谷米”（Parboiling）碾磨技术的化学家。这项技术经过预煮处理，不仅极大锁定了米粒中的营养成分，而且煮饭速度更快。1942年，Forrest 与这位化学家在得克萨斯州休斯敦成立合资公司，在美申请了专利技术。军队急需海量廉价且高热量的口粮，这款富含营养又烹饪迅速的大米瞬间拿下军方大单。这项业务后来演变为了享誉全美的“本叔叔大米”（Uncle Ben's Rice，现已更名为 Ben's Original）。在当时的美国，创立一个包装品牌大米是极为前卫的举动。与散装无差异的大宗农产品不同，这是美国历史上首个大米品牌，如今 Ben's Original 单年营收已突破 10 亿美元。此时 Forrest 名下已拼凑起庞大的商业拼图：英国 Mars Bar 糖果业务、Chappie 宠物食品公司、美国合资的 M&M Limited，以及休斯敦的大米公司。 --- ### [02:08:27](https://www.youtube.com/watch?v=GyWJeY55x-8&t=7707s) 战后推向大众市场的挫败与暴力决裂二战结束后，糖果供应恢复正常。Forrest 与合资伙伴 Bruce Murrie（好时总裁 William Murrie 之子）计划将军方配给的 M&M's 正式推向大众消费品市场。他们本以为经历战场考验的士兵会像当年爱上好时巧克力棒一样引爆消费潮，然而1945年后的民用首发反响平平，销量常年陷入停滞。低迷的销量让两位合伙人的关系剑拔弩张。Bruce 掌管销售部门，虽然擅长对接军方大采购，但面对复杂的民用消费市场却毫无办法。性格极其严苛火爆的 Forrest 采取了极端的羞辱手段： - 勒令 Bruce 每天早晨提交前一日的销售报告； - 只要未达到 Forrest 设定的目标，Forrest 就会用粗红笔在报表上写下醒目的“**FAILED**”（失败）； - Forrest 将这些批注着“失败”的报表直接张贴在公司男洗手间的墙上，公开展览。 Forrest 这种残酷的作风不仅源于暴脾气，更是一种精心算计的逼迫手段，目的是将 Bruce 赶走以夺得 100% 绝对控制权。1949 年，不堪受辱的 Bruce 在新泽西的办公室与 Forrest 爆发了肢体冲突，两人当场大打出手。Forrest 随即叫来安保人员将身兼股东与销售主管的 Bruce 驱逐出厂区。 - **最终退出谈判**：Bruce 辞职后，双方就其持有的 20% 股权展开博弈，最终以 100 万美元达成买断（按当时估值，整家公司价值 500 万美元；换算为 2024 年币值，公司约合 6500 万美元，Bruce 带走了约 1300 万美元现金）。 - 历经长达 9 年的打拼，Bruce 在 M&M's 甚至还没来得及在糖衣上印制标志性大写“M”字母之前，彻底退出了历史舞台。 --- ### [02:12:37](https://www.youtube.com/watch?v=GyWJeY55x-8&t=7957s) 现代营销启蒙与好时文化的对照夺回全资所有权后，Forrest 于 1950 年聘请了知名广告公司 Ted Bates & Company 对 M&M's 进行全方位的市场深度调研。这一举措在当年的糖果业极具前瞻性。宝洁等大型快消品（CPG）巨头当时刚刚建立起现代产品管理（Product Management）与市场调研机制，而传统糖果行业依旧停留于凭借个人直觉野蛮生长的“老作风”。与玛氏的敏锐形成鲜明对比的是老牌霸主好时（Hershey）： - **零广告信条**：好时严格奉行不进行任何商业广告推广的传统，这种极端政策一直固执地持续到 1970 年； - **简陋的增长目标**：好时甚至缺乏完备的销售配额管理体系，传说其唯一的年度商业计划是创始人 Milton Hershey 留在一张卡片上的批示：“每年业绩增长 4%”。两位主持人指出，自 1950 年代开始，全球巧克力巨头之间的博弈正式从“产品研发创新”转向“现代营销与全渠道分销的战争”。当时像 Ted Bates 这类顶尖广告机构承担着类似于现代战略咨询的职责，通过深入的用户画像研究揭示产品潜力。经过全方位的市场调研，Ted Bates 团队给出了一个意外而关键的洞察：M&M's 真正的杀手级目标受众是儿童。 ### [02:15:09](https://www.youtube.com/watch?v=GyWJeY55x-8&t=8109s) “只溶在口，不溶在手”：直击父母心理的世纪广告糖果市场最初虽然面向儿童，但到了 1950 年代前后，整个行业基本都在向成人做营销，大家都认为成年人才是消费主力。M&M's 和英国的 Smarties 起初也都是作为军用口粮开发的，因此最初的宣传重心同样放在成人市场。然而事实证明，小孩子们极其狂热地喜欢这种小巧、色彩斑斓的糖果粒。但这里存在一个根本性的商业痛点：小孩子自己是没有钱买糖的，真正掏钱包的是父母。想要把糖卖给孩子，就必须先说服父母。正是在这种背景下，商业史上最杰出、最著名的广告语之一诞生了——“只溶在口，不溶在手”（The milk chocolate that melts in your mouth, not in your hand）。这句话之所以能成为几十年来家喻户晓的经典，是因为它不可思议地精准切中了家有幼童的父母的核心心理。主播 David 调侃自己代入 1950 年代家长的视角：父母当然希望孩子开心，但他们更深层次、更迫切的愿望，其实是“孩子们不要在家里制造混乱和灾难”。任何一个家长——无论是在 1950 年还是在 2024 年——最害怕的噩梦莫过于挂着鼻涕的孩子满屋乱跑，把融化黏糊的巧克力抹在昂贵的沙发、墙壁和家具上。而这句口号传递出的信息完美解决了痛点：既能满足孩子对巧克力的渴望让他们不再哭闹，又绝对不会弄脏你的客厅与家具。为了全方位打透受众，M&M's 采取了双管齐下的策略：一方面通过核心痛点广告打动掌握财权的父母，另一方面大举赞助当时全美最火爆的儿童电视节目，包括《米老鼠俱乐部》（The Mickey Mouse Club）和《霍迪·杜迪秀》（Howdy Doody Show）。这套组合拳的效果立竿见影。 ### [02:17:22](https://www.youtube.com/watch?v=GyWJeY55x-8&t=8242s) 从零到四千万美元：建立品牌护城河与仿冒者反击从 1950 或 1951 年发起这项广告战役算起，仅仅过了五年，到了 1956 年，M&M's 的年销售额就从几乎为零狂飙至超过 4000 万美元，一举成为全美销量最大的糖果产品，不仅迅速甩开了自家的 Snickers 和 Milky Way，更将行业霸主好时（Hershey's）的标准巧克力排踩在了脚下。这种爆发式增长立刻引来了同行觊觎，为了防止山寨仿冒品混淆视听，公司开始在每一颗糖豆表面印上标志性的字母“M”。起初印的是黑色“M”，到 1954 年正式改用白色，并配合开展了第二轮宣传攻势，告诫消费者“认准每颗糖上的 M 字母以验明正身”。这标志着他们不仅是在制造糖果，更是在构建极高的品牌知识产权（IP）、消费者的情感认同与深厚信任。也是在 1954 年，电视荧幕上首次播出了 M&M's 拟人化卡通形象的商业广告。虽然当时还是纯手工绘制的动画，与如今家喻户晓的 3D 电脑CG形象有所不同，但那种机智诙谐、爱吐槽的角色性格从半个多世纪前便已奠定，并贯穿至今。面对 M&M's 的步步紧逼，好时公司（Hershey's）感受到了巨大的危机感。作为反击，好时推出了竞品“Hershey-ets”。然而这款产品在营销上遭遇了灾难性的困境：当顾客询问“这到底是什么产品”时，推销员和广告只能解释为“它就像 M&M's 一样”。主播指出，在需要“先发优势”的消费品市场中，率先建立规模并成为品类的代名词至关重要；一旦对手成了品类基准，任何模仿者都会陷入替对手做嫁衣的被动局面。好时后来还尝试在花生酱产品线上推出了著名的 Reese's Pieces。而在 1954 年，花生版 M&M's（Peanut M&M's）也正式面世，最初居然只有单一的棕褐色（tan），直到 1960 年他们才意识到单色太单调，陆续加入了黄色、红色和绿色。 ```mermaid flowchart TD accTitle: M&M's 早期爆发与竞争策略 accDescr: 展示 M&M's 通过精准营销、建立 IP 标志及应对好时模仿的过程 subgraph Marketing["营销组合拳"] A["父母端：'只溶在口，不溶在手'"] B["儿童端：赞助《米老鼠俱乐部》等王牌节目"] end subgraph Scale["规模爆发 (1956)"] C["年销售额突破 4000 万美元"] D["超越 Hershey's 排块，成全美第一糖果"] end subgraph Defense["防御与品类定义"] E["防伪举措：印制白色 'M' 字母标记"] F["推出卡通拟人广告 (1954)"] G["好时推出 Hershey-ets 模仿惨败"] end Marketing --> Scale Scale --> Defense ``` ### [02:20:31](https://www.youtube.com/watch?v=GyWJeY55x-8&t=8431s) 电视广告黄金期与自动售货机生意历史的行进往往伴随着完美的时代红利。1955 年前后，电视机开始真正走入全美千家万户，这与糖果等快消品的营销需求堪称天作之合。战后如果一家品牌想要通过简短动人的情感瞬间与洗脑标语来占领心智，电视广告就是量身定制的最佳媒介。历史学家 Deborah Cadbury 曾精辟地总结道：“一条精彩的电视广告战役，可以在短短几周内彻底逆转消费者保持了数十年的品牌忠诚度，尤其是在糖衣巧克力这种全新的细分品类中。” 与此同时，在 1955 年的大洋彼岸，福雷斯特·马尔斯（Forrest Mars）在英国敏锐地开辟了另一项前沿业务——自动售货机服务公司 Vendepac。他们不仅制造了最早的现代售货机，更研发了领先的投币机械装置、纸币验证器（Bill validators）以及自动找零机。Mars 在售货机纸币识别技术领域一度成为全球市场份额的领跑者，这项极具现金流价值的基础设施业务一直被 Mars 家族持有，直到 2006 年才被剥离出售。 - 1954 年：花生 M&M's 上市，首发仅为棕褐色（tan），1960 年拓展为黄、红、绿等多色。 - 1955 年：全美电视机普及狂潮与糖果品牌广告产生巨大共振。 - 1955 年：在英国创立 Vendepac，开拓自动售货机、投币器与纸币识别验证器技术，后于 2006 年出售。 ### [02:21:36](https://www.youtube.com/watch?v=GyWJeY55x-8&t=8496s) 庞大的福雷斯特帝国与未解的心结到了 1950 年代中后期，福雷斯特·马尔斯个人的商业帝国已然蔚为壮观： 1. **英国与欧洲**：拥有全英最畅销的巧克力排 Mars Bar，欧洲业务规模庞大，且逐步摆脱对吉百利（Cadbury）的代工依赖，自建巧克力生产线； 2. **美国零食**：拥有全美销量冠军 M&M's； 3. **宠物食品**：缔造了当时全球最大、几乎处于垄断地位的专业宠物食品业务（涵盖 Chappie、Kitekat 等前身）； 4. **主粮粮油**：掌握着全球最大且唯一的品牌化大米业务“本大叔”（Uncle Ben's）。整个福雷斯特旗下的企业版图在 1950 年代中后期的年总收入已经达到了约 2 亿美元。然而，在傲视群雄的商业成就背后，福雷斯特心中仍有两大致命的心结与软肋：第一，也是最关键的，是他依然没能掌控父亲当年在芝加哥建立的祖业——芝加哥 Mars Inc.。此时芝加哥总部的年收入大约在 5000 万美元上下，福雷斯特的商业体量已经是老公司的整整四倍，但他手中当时只有父亲留下的约 10% 左右的零星股份，毫无管理控制权。第二，他还没能彻底摆脱好时（Hershey's）的卡脖子威胁。在美国本土，M&M's 的巧克力原料依然严重依赖好时的工业巧克力涂层供应，他尚未在美国本土建立属于自己的独立巧克力全产业链。如果好时突然单方面切断巧克力供应，M&M's 将面临灭顶之灾。当然，好时暂时不敢贸然断供，因为 M&M's 已经成了好时最大的企业客户。此前福雷斯特极富心机地算准好时前总裁 William Murrie 退休的时机，一举将好时太子布鲁斯·穆里（Bruce Murrie）扫地出门、独吞 M&M's，这一切都在福雷斯特的精密算计之中。 ### [02:23:41](https://www.youtube.com/watch?v=GyWJeY55x-8&t=8621s) “狐狸溜进鸡窝”：突袭芝加哥 Mars 总部收回芝加哥 Mars Inc. 的控制权，是福雷斯特宿命般的执念。当年老父亲弗兰克·马尔斯（Frank Mars）去世时，将公司约三分之二的控股权留给了第二任妻子埃塞尔（Ethel），其余三分之一分散在员工等小股东手里，福雷斯特和同父异母的妹妹帕特里夏（Patricia）仅象征性分到微量股份。埃塞尔随后安排自己的同母异父弟弟威廉·克鲁彭巴赫（William Kruppenbacher）出任 CEO 掌舵公司。 1945 年埃塞尔去世，根据弗兰克早年的遗嘱安排，埃塞尔持有的这三分之二控股权被均分，帕特里夏与福雷斯特各得一份——这意味着福雷斯特瞬间拿到了芝加哥 Mars 约三分之一的投票权股份。手握 M&M's 巨大成功带来的资本与底气，步入 1950 年代的福雷斯特正式将猎鹰般的目光锁定了芝加哥总部。他直接找上芝加哥 Mars 的董事会，傲慢地提出要求：“既然我拥有这家公司整整三分之一的股份，我认为我理应在总部拥有一间专属办公室，并拥有随时进出、视察工厂运营的权力。” 面对这个要求，董事会竟然天真地答应了，觉得不过是给他安排一间办公室而已。主播形象地打比方道：“这就好比一只凶狠的狐狸主动申请要住进鸡窝里乘凉，在场的所有母鸡居然面面相觑觉得‘好像没什么大问题，给他搭个窝吧’。” 芝加哥的管理层显然严重低估了福雷斯特的偏执与手段。拿到办公室后，福雷斯特几乎全职搬到了芝加哥，每天雷打不动地出现在工厂与办公室。他像鹰犬一样在走廊和产线上巡视，对每一处细节极尽苛刻地挑刺批评。紧接着，他开始连篇累牍地向董事会提交极具攻击性的内部备忘录，巨细靡遗地罗列公司的所有管理纰漏，痛斥现任 CEO 威廉犯下的各种荒唐失误，并在备忘录中公然呼吁：立刻开除威廉，由他福雷斯特·马尔斯接管公司大权。播客主播感叹，这种凭借少数股份强行索要董事会席位、入驻公司并最终夺取控制权的剧本，简直与日后埃隆·马斯克（Elon Musk）收购 Twitter（X）时的层层渗透手段如出一辙。 ### [02:25:37](https://www.youtube.com/watch?v=GyWJeY55x-8&t=8737s) 芝加哥业务的衰退与 Forrest 的步步紧逼尽管面临种种经营建议和外部压力，威廉（William）和帕特里夏（Patricia，常称 Patty）以及 Mars 芝加哥总部的其他管理层，依然坚决不同意把公司卖给 Forrest Mars，更不愿让他插手接管。1959 年，威廉从 CEO 职位上退休，Forrest 敏锐地察觉到这是千载难逢的契机。他立即展开游说攻势，找 Patty、找其他股东、找所有管理层人员，力陈应该由他来接手并经营芝加哥的糖果业务。然而 Patty 并不买账。她决定扶持自己的丈夫詹姆斯（James）出任 CEO——詹姆斯此前虽一直在公司任职，但事实证明他完全不具备执掌全局的能力，是一位极其糟糕的领导者。詹姆斯上任后，恰逢远距离通勤问题（他居然住在加州圣迭戈，在还没有远程办公和 Zoom 的年代，每周跨越半个美国通勤来管理一家重资产制造业工厂）。从 1959 年到 1963 年短短四年间，Mars 芝加哥公司的营收从大约 5,000 万美元骤降至 4,000 万美元。表面上看只是 20% 的下滑，但对于具有庞大固定成本基础的糖果制造企业而言，固定成本分摊后的经营杠杆会发生惨烈的反向传导，其总资产回报率（Return on Total Assets）出现灾难性滑坡。然而，这场经营灾难对 Forrest 来说却是极其有利的施压工具。 - **1959 年**：CEO 威廉退休，Patty 的丈夫詹姆斯接任 CEO。 - **1959–1963 年**：营收从 5,000 万美元跌落至约 4,000 万美元（降幅达 20%）。 - **致命弱点**：极高的重资产固定成本结构，导致 20% 的收入下跌对利润与现金流产生毁灭性冲击。 --- ### [02:27:16](https://www.youtube.com/watch?v=GyWJeY55x-8&t=8836s) 圣迭戈交易与帝国统一：Forrest 全面接管 Mars 1963 年，眼看芝加哥公司濒临瓦解，Forrest 亲自飞赴圣迭戈与妹妹 Patty 面谈。Forrest 直言不讳地警告她，若再不采取行动，父亲一手创立的企业必将破产，而唯有他能挽狂澜于既倒。面对残酷的现实，Patty 最终同意出售股权，但提出了两项关键前提： 1. Forrest 必须承诺绝不开除她的丈夫詹姆斯，保留其 CEO 头衔； 2. 必须将父亲当年的公司——Mars, Incorporated——设立为合并后所有业务的母公司，以此继承并捍卫老弗兰克（Frank Mars）的家族遗产。 Forrest 毫不犹豫地全盘答应。将老公司作为母公司完全顺水推舟，毕竟同样姓 Mars，只要控股权在手，谁合并谁在法律和商业实质上并无差别。 1963 年 Patty 出售股份后，Forrest 掌控了三分之二的股权。随后几个月内，他逐一向其他股东（主要是现任和前任高管）发起收购，至 1964 年中，Forrest 终于实现了对 Mars, Incorporated 的 100% 绝对控制。从 1944 年生母 Ethel 逝世算起，他在这场夺权长征中整整隐忍、博弈了 20 年；若从当年他被迫出走欧洲算起，这一执念更是贯穿了他大半生。主播们感叹，在完全不依赖外部融资的情况下，Forrest 能够单凭自己手头的 M&M's、Uncle Ben's 大米以及英国宠物食品业务的充沛现金流，自掏腰包掏出预估超过 2,500 万美元的真金白银，吃下一家年收入 4,000 万美元的庞大企业，其个人帝国的造血能力实在惊人。 ```mermaid flowchart TD accTitle: Forrest Mars 统一帝国的资本与控制路径 accDescr: 展现 Forrest 如何利用独立业务的现金流收购 Chicago Mars，并最终完成帝国统一。 subgraph Independent ["Forrest 的独立造血业务"] MM["M&M's"] Rice["Uncle Ben's 大米"] UK["英国业务（宠物食品等）"] end subgraph Acquisition ["1963-1964 股权整合"] Cash["逾 2,500 万美元纯自有现金"] Patty["收购 Patty 股权（获得 2/3 控制权）"] Mgmt["买断芝加哥管理层及离任老股东"] end subgraph Empire ["统一的商业帝国"] Unified["Mars, Incorporated 由 Forrest Mars 绝对控股"] end MM --> Cash Rice --> Cash UK --> Cash Cash --> Patty Patty --> Mgmt Mgmt --> Unified ``` --- ### [02:29:55](https://www.youtube.com/watch?v=GyWJeY55x-8&t=8995s) 激进重组与 Darth Vader 式的权力兑现彻底拿到控制权后，Forrest 进驻芝加哥总部的雷霆手段堪比当代“手提水槽入职”的激进整顿： - 强行拆毁所有独立办公室的隔墙，强制推行完全开放式办公格局； - 砸碎并废除象征特权的高管专属餐厅（Executive Dining Room）； - 变卖公司的艺术收藏品和企业专属直升机； - 给所有人——包括 Patty 的丈夫詹姆斯——人手发了一张打卡考勤卡。悲剧的是，同年晚些时候，年未过半百的 Patty 因癌症不幸早逝。Patty 离世后，约束 Forrest 的最后一道亲情纽带荡然无存。他随即罢免了詹姆斯的 CEO 职位，由自己亲自兼任合并后整个帝国的最高掌舵人。主播不禁引用了《星球大战》中达斯·维达（Darth Vader）的名言来形容此时冷酷决断的 Forrest：“我正在单方面更改协议，祈祷我不会改得更彻底吧（I am altering the deal, pray I don't alter it any further）。” --- ### [02:31:16](https://www.youtube.com/watch?v=GyWJeY55x-8&t=9076s) 告别 Hershey：自主研发巧克力与全产业链控制登上权杖之位的 Forrest 迅速启动了他的终极征途：在美国彻底摆脱对 Hershey（好时）长达数十年的巧克力原料依赖，全面转为自主生产。在此之前，他已经对芝加哥工厂的流水线展开了极致的工业化技术改造——曾经需要整整一天才能做出的一条 Snickers（士力架），如今在高度自动化的流水线上不到一小时就能下线。 Forrest 走马上任后立刻致电 Hershey 管理层，通知他们 Mars 即将分阶段中止从 Hershey 采购巧克力的合作。Hershey 对此感到匪夷所思，认为 Mars 简直疯了：建造一座独立巧克力精炼厂需要承担天文数字般的固定资产开支，而 Hershey 甚至拥有一座专门服务巧克力制造的完整工业城镇并提供极具竞争力的供货价。Hershey 内部团队测算，Mars 至少需要 10 年才能在这项重资产自建投资中收回成本实现盈利。然而 Forrest 展现了其铁腕与前瞻性： - **六个月死线**：他要求芝加哥工厂的厂长们必须在 6 个月内全面掌握工艺，在厂区内自行炼制出巧克力。 - **品质原则第一（Quality Principle）**：Forrest 坚信如果真想在既定价格下做到极致品质，就必须把整条生产链牢牢抓在自己手中——正如计算机大师艾伦·凯（Alan Kay）的那句经典名言：“真正认真对待软件的人，应该自己做硬件。” - **规模经济最大化**：自建生产线将每一点被供应商赚取的毛利重新转化为自身的经营杠杆，为未来几十年的无情扩张奠定了绝对的成本优势。 --- ### [02:34:04](https://www.youtube.com/watch?v=GyWJeY55x-8&t=9244s) 货架争夺战：90% 的冲动消费与超级市场的力量流转快消品（CPG）归根结底是一场规模经济的博弈，而对糖果品类来说，最凶险的战场在于“货架陈列”（Shelf Space）。糖果零售本质上是一场残酷的零和博弈：高达 70% 到 90% 的糖果购买属于“冲动消费”（Impulse Purchases），仅有大约 10% 是消费者提前计划好的。围绕这一点，播客详细探讨了糖果摆放位置的历史沿革： - **Mars 1979 年的市场调研**：当时 Mars 委托进行的研究显示，冲动消费在糖果购买中占比高达 70%。 - **收银台革命**： Mars 据此发起了一场轰轰烈烈的行业游说，推动零售商将糖果展示架直接架设在超市收银台旁边。这项如今在全世界习以为常的陈列规则，正是 Mars 在 1979 年掀起的零售终端革命。在高度依赖冲动消费的市场中，抢占消费者视线最前沿的空间就是生死线。凭借巨大的体量优势，Mars 拥有足够的话语权向零售商施压，将 Hershey 等竞争对手排挤至货架底层或过道后排。与此同时，播客也引入了类似“聚合理论”（Aggregation Theory）的渠道权力反转视角：在传统零散杂货铺时代，店主缺乏议价能力；但随着大型连锁超级市场的崛起，渠道权力发生高度集中，使得糖果制造商与大商超之间的博弈变得前所未有的激烈与复杂。 ### [02:36:37](https://www.youtube.com/watch?v=GyWJeY55x-8&t=9397s) 超市零售变革与规模经济创业者的崛起战后美国零售格局发生了翻天覆地的变化。随着大型连锁超市的崛起，渠道商开始直接向糖果制造商提出极其严苛的要求：超市只希望销售统一的糖果品类，并且大幅精简 SKU 数量以防止库存堆积；更关键的是，超市要求厂商在电视等大众媒体上投入巨额营销。因为电视媒体的爆发让超市明确意识到，只有全国性的广告攻势才能真正拉动货架上的动销。超市的逻辑很直接——“告诉我们你打算把哪些产品打爆，我们才会为你留出宝贵的货架空间”。这一技术转变（电视普及）和消费行为演进（超市成为主流采购渠道），直接催生了巨大的“规模回报”，极度有利于规模化巨头。令人唏嘘的是，Hershey（好时）本应是这股浪潮的最大受益者。降低价格、铺设全国分销网络、抢占货架与陈列——这原本是创始人 Milton Hershey 创立公司以来的核心战略。然而，Milton Hershey 和 William Murrie 退休/离世之后，好时陷入了长达三十年的僵化乃至“脑死亡”状态。公司既不做广告，甚至连市场营销部门都没有。与爱马仕这种有意不设营销部的奢侈品牌不同，好时纯粹是机械地将“我们从不做广告”这一过时教条奉为不可违背的教条，深陷教条主义而对新时代的媒介与渠道巨变视若无睹。好时虽是上市公司，但控股权牢牢掌握在 Milton Hershey 设立的信托基金手中，信托管理层与实际商业运营和市场脉搏脱节极其严重。相比之下，这一历史节点恰好为 Forrest Mars 这样的“全球规模经济型创业者”铺平了道路。在 20 世纪 10 年代初，由于市场分割和技术限制，企业很难像后来那样在全国乃至全球范围内榨取规模经济红利；但到了电视时代与全球化初期，面对统一且庞大的美国全国市场以及海外扩张机遇，Forrest Mars 这种将生产效率、规模化运作、集中营销推向极致的性格特质，找到了完美的时代舞台。 ```mermaid flowchart LR accTitle: 零售变革与规模经济正循环 accDescr: 超市渠道集中与电视广告结合，将规模优势转化为无法撼动的竞争壁垒 subgraph ChannelShift["渠道与技术变革"] direction TB TV["电视普及 全国性大众营销"] Supermarket["超级市场崛起 精简SKU / 抢占货架"] end subgraph ScaleAdvantage["规模经济巨头"] direction TB MarsEngine["Mars 规模化飞轮 全美铺货 + 大额广告"] HersheyLag["Hershey 错失良机 恪守无广告教条 / 信托脱节"] end TV --> Supermarket Supermarket --> MarsEngine MarsEngine -.->|"彻底压制"| HersheyLag ``` --- ### [02:40:00](https://www.youtube.com/watch?v=GyWJeY55x-8&t=9600s) 缩水式通胀与 70 年 5 美分神话的破灭在 Forrest Mars 建立起独立自主的巧克力生产能力后，Mars 彻底击溃好时的契机终于到来。好时自 1900 年推出经典巧克力排块以来，一直将零售价定为 5 美分（a nickel），旨在让全美所有平民都能负担得起。然而在随后的几十年里，好时管理层陷入了近乎荒唐的固执：从 1900 年一直到 1969 年 11 月，好时在长达近 70 年的时间里从未改变过 5 美分的定价。在这近 70 年间，通货膨胀导致 1900 年的 5 美分在 1970 年相当于 23 美分，通胀压力高达 4.5 倍。面对不断上涨的成本，好时选择的应对手段不是提价，而是不断悄悄削减巧克力块的克重（即典型的缩水式通胀 Shrinkflation）： - 1900 年好时巧克力排块的原始重量为 1.25 盎司（约 35.4 克）。 - 到了 1969 年，经过几十年的持续缩水，其重量已经被腰斩至原来的一半左右，薄如纸片。 - 与此同时，Mars 旗下的 Snickers（士力架）现代标准重量高达 1.86 盎司。尽管士力架的大部分重量来自花生、牛轧糖等廉价填充配料，但对消费者而言，拿在手里是一根沉甸甸、极具饱腹感和满足感的厚实糖果，两相对比下，好时轻飘飘的巧克力片显得格外滑稽可怜。消费者在咀嚼时只在乎“实际感知到的饱腹价值”，这正是士力架打出“横扫饥饿，做回自己”（Satisfies）口号的商业底气。到了 1969 年，大宗原料价格暴涨，好时实在撑不下去了，做出了一个历史性决定：将巧克力排块价格翻倍至 10 美分。好时自以为聪明地做出了补偿机制——将巧克力块的尺寸重新调回 1900 年原始的 1.25 盎司。在内部财务算盘上，价格翻倍、重量翻倍，单位成本似乎打平了，但在没有营销部、不做用户调研的好时眼里，这一决策引发了公关灾难。消费者怒不可遏：其一，70 年来首次调价就直接暴涨 100%；其二，这一激增直接向公众曝光了好时几十年来一直在偷偷摸摸削减分量的“把戏”，引发了强烈的被欺骗感。 --- ### [02:43:49](https://www.youtube.com/watch?v=GyWJeY55x-8&t=9829s) 1973 年王座更迭与原材料成本不对称战 Forrest Mars 敏锐捕捉到了好时自掘坟墓的破绽。他庆幸自己早已摆脱对好时工业巧克力的依赖，随即果断打出组合拳：不仅大幅增加电视广告预算，让 M&M's 和 Mars 旗下产品轰炸全国荧幕，更在坚持不涨价的前提下主动扩大糖果尺寸，向好时发起了惨烈的“价格与尺寸不对称战”。好时被迫在 1970 年打破 70 年传统首次开辟广告业务，且广告投放立竿见影；然而好时董事会短视至极——因原材料高企挤压利润，仅投放了两年就以“利润下滑必须削减开支”为由紧急叫停了广告。好时的战略摇摆与结构性劣势让 Mars 迎头赶上： - **1973 年历史性拐点**：Mars 整合了 Snickers、Milky Way、3 Musketeers 以及 M&M's 等全部产品线，正式超越好时，登顶全美第一大糖果制造公司。 - **产品 BOM 成本不对称性**：好时的拳头产品是纯巧克力块，其原料全是最致密、最昂贵的可可脂与可可液块；而 Mars 的主力产品（士力架、银河棒、M&M's）填充了大量廉价的膨胀物料（牛轧糖、花生、糖衣外壳）。在消费者心中两者的甜品价值相当，但 Mars 的单件物料成本（COGS）远低于好时。 - **80 年代初的价格夹击**：在 80 年代初可可豆价格再次暴涨时，全行业利润受挤压，好时受创最重。Mars 趁虚而入，再次宣布“加量降价”，将好时彻底逼入绝境。 - **大宗商品交易与对冲能力**：自 60 年代起，Mars 在 70 至 80 年代内部搭建了极其专业、严密的大宗商品交易与衍生品对冲部门（Commodities Trading Department），而好时在这一金融与原料供应链风控领域几乎毫无招架之力，只能任凭周期洗劫。虽然在很多年后好时曾在美国本土单一糖果市场上短暂反超 Mars，但在全球舞台上，好时基本退缩为一家局限于美国本土的企业；而 Mars 则凭借多元品类、全球分销以及宠物食品等业务，构筑起横跨全球的庞大消费品帝国。 ### [02:47:16](https://www.youtube.com/watch?v=GyWJeY55x-8&t=10036s) 大宗商品交易与 1973 年老弗雷斯特彻底退休作为一家完全不公开财务数据的私有企业，外界很难看清玛氏（Mars）内部的真实现金流。但根据多年来从各方渠道流传的传闻，玛氏其实在背后通过大宗商品期货交易斩获了数十亿美元的巨额利润。当好时（Hershey）等竞争对手在面对可可、糖等原材料价格暴涨时倍感剧烈风险与压力（即使现代的好时也开始做套期保值，但在 20 世纪七八十年代远非如此），玛氏却早在数十年前就掌握了应对市场波动的诀窍，甚至反向利用大宗商品市场的剧烈周期波动狠赚了一笔。 ```mermaid flowchart TD accTitle: 玛氏与好时的大宗商品策略对比 accDescr: 对比20世纪七八十年代好时将原料价格波动视为风险，与玛氏通过大宗商品交易获取巨额利润的不同策略。 subgraph Hershey["好时 (Hershey's)"] H1["可可/糖价格暴涨"] --> H2["承受付款风险与业绩受挫"] end subgraph Mars["玛氏 (Mars, Inc.)"] M1["大宗商品市场价格波动"] --> M2["老练的交易与对冲策略"] --> M3["赚取数十亿美元巨额交易利润"] end ``` 到了 1973 年，玛氏终于完成了历史性的一跃：正式超越好时，登顶成为全美第一大糖果制造公司。然而就在这个至高时刻，老弗雷斯特·玛氏（Forrest Mars Sr.）的故事迎来了出人意料的转折——他彻底退休走人，挂印而去。他将庞大的商业帝国平均分给了自己的三个子女：小弗雷斯特·玛氏（Forrest Mars Jr.）、约翰·玛氏（John Mars）以及杰奎琳·玛氏（Jackie Mars），每人获得三分之一的股份。当时整个帝国的年营业额已达约 8 亿美元。老弗雷斯特不仅不再参与日常管理，甚至彻底不再持有公司股份。与此同时，玛氏公司也自此彻底切断了与外界公共媒体的几乎一切日常沟通，进入了极度神秘与闭门不出的深潜期。 ### [02:49:17](https://www.youtube.com/watch?v=GyWJeY55x-8&t=10157s) 76 岁再度创业：Ethel M Chocolates 与酒心巧克力狂热在 20 世纪 70 年代余下的岁月里，老弗雷斯特过着平静的退休生活。他的生母、老弗兰克最初的原配妻子埃塞尔（Ethel）当时依然健在，老弗雷斯特花了大量时间陪伴并照料母亲。但这样闲适的日子只维持了六七年，一位一生都在战斗的硬核创业者终究按捺不住骨子里的躁动。1980 年，时年 76 岁高龄的老弗雷斯特做出惊人决定：重新出山创业！他为新公司命名为 Ethel M Chocolates，以此致敬他心目中家族唯一的真正女家长——母亲埃塞尔。他的商业构想非常清晰：效仿沃伦·巴菲特与查理·芒格看好 See's Candies 的逻辑，切入高端精品巧克力赛道，直接对标 See's。为了形成差异化竞争，他敏锐地捕捉到了 20 世纪 80 年代酒心巧克力（liquor-filled chocolates）的风口。由于美国许多州对酒心巧克力的合法性有严格限制，而内华达州正是其政策中心，76 岁的老弗雷斯特毫不犹豫地将大本营搬到了内华达州拉斯维加斯郊外的亨德森（Henderson）。他再次祭出年轻时打天下的一贯作风：建起一座现代工厂，在厂房正上方盖了一间属于自己的公寓，住在工厂顶楼全天候指挥运营。 - **极速崛起**：仅仅数年之内，Ethel M Chocolates 的年收入就冲到了 1.5 亿美元。 - **家族内部收购**：到了 1988 年，玛氏公司与其掌权的子女们决定买下这门生意，以未公开的金额正式将 Ethel M 纳入玛氏集团旗下。这演变成了一场极具戏剧性的谈判——老弗雷斯特已经将玛氏全权交给孩子，再把新公司卖给自己的孩子们，最终套现的资金也只会再次流转给下一代，堪称老弗雷斯特创业生涯中最绝妙的收官尾声（Coda）。 ### [02:52:46](https://www.youtube.com/watch?v=GyWJeY55x-8&t=10366s) 极端私密性、产品扩张与二代接班的全球化狂飙完成对 Ethel M 的收购后，共同担任联席 CEO 的小弗雷斯特与约翰两兄弟曾极罕见地破例，接受了乔尔·布伦纳（Joel Glenn Brenner）及《华盛顿邮报》的深入采访。然而，玛氏家族对随后的报道内容极为不悦，并迅速将大门永远关闭，自此再未向外界媒体开放深度专访。尽管现代玛氏已认识到公众对企业透明度、可持续发展以及对抗全球糖尿病流行病等议题的诉求，现任 CEO 偶尔会发表公开声明与新闻通稿，但玛氏依然死守底线：严禁外界为公司撰写深入内幕书籍，就连为其提供信贷的大银行也根本拿不到详尽的内部财务报表。在两兄弟执掌期间，玛氏的产品版图与全球业务迎来了爆发式扩张： - **经典糖果产品引入**：1974 年，在英国大获成功的彩虹糖（Skittles）被引入美国本土进行生产；随后，Twix 饼干巧克力棒以及在英国原名为 Opal Fruits 的 Starburst 水果软糖相继被带到美国。 - **宠物食品本土化扩张**：1986 年，玛氏收购了位于洛杉矶的 Kal Kan Foods，开启了在美国宠物食品市场的霸主地位，Kal Kan 狗粮被升级重塑为宝路（Pedigree），猫粮则重塑为伟嘉（Whiskas）。 - **进军冷冻甜品与精品巧克力**：同在 1986 年，玛氏收购了 Dove（德芙），从其核心的冰淇淋雪糕条（Dove Bars）起步，随后开创性地推出了德芙巧克力块（Dove Promises）与排块巧克力，成功确立了正面迎击好时 Kisses 及经典好时巧克力排块的产品线。 - **28 年增长 25 倍的全球化狂飙**：虽然创业神话源自老弗雷斯特，但两兄弟（以及同样持有三分之一股份并在日后加入业务的妹妹杰奎琳）创造了惊人的复利奇迹。从 1973 年老弗雷斯特退休时的 8 亿美元年收入，到 2001 年两兄弟将公司日常管理移交给职业经理人时，玛氏的年营收已暴增至 200 亿美元——28 年内翻了 25 倍。他们将老弗雷斯特打造的产品推向了日本、中国、俄罗斯、中东以及南美洲；在 1984 年赞助奥运会期间，更是效仿 Visa 的全球化统一品牌打法，将士力架等品牌全球命名大一统，完成了极其震撼的全球化征服。 ### [02:56:58](https://www.youtube.com/watch?v=GyWJeY55x-8&t=10618s) 2008 年联手巴菲特收购箭牌 2008 年，玛氏开启了糖果史上最重磅的并购案：在“沃伦叔叔”和“查理叔叔”（巴菲特与芒格）的资本助攻下，强势收购口香糖巨头箭牌（Wrigley）。巴菲特在交易时幽默地调侃道：“我对玛氏和箭牌都进行了长达 70 年的味觉测试，它们都顺利通过了测试。” 巴菲特更在 2011 年伯克希尔·哈撒韦的致股东信中道出了这场交易乃至消费品生意的商业真谛：“‘低成本买入大宗商品，高溢价出售消费品牌’（Buy commodities, sell brands）一直以来都是商业成功的黄金法则。自 1886 年以来的可口可乐和自 1891 年以来的箭牌，正是依靠这一模式创造了庞大而持久的利润。”而这恰恰也是玛氏帝国数十年如一日坚守并统治行业的终极内核。 ### [02:58:02](https://www.youtube.com/watch?v=GyWJeY55x-8&t=10682s) “买入大宗商品，卖出品牌产品”与箭牌收购案始末在深入探讨玛氏（Mars）的商业帝国时，节目主播理清了一个核心运营逻辑：“买入大宗商品，卖出品牌产品”（Buy commodities, sell brands）。如果作为投资人，反过来讲“卖出大宗商品，买入品牌”是个极佳的投资组合法则；但对于实体企业而言，这正是最具暴利的运作范式——企业一边将可可豆等原材料源源不断运进工厂，另一边生产出士力架（Snickers）等高溢价品牌糖果，市场和消费者欣然为这种品牌价值支付高昂利润。正是遵循这一逻辑，玛氏在2008年全球金融海啸的风口浪尖完成了震撼商界的世纪并购。该交易于2008年4月对外宣布，并在同年10月——雷曼兄弟（Lehman Brothers）倒闭仅仅数周后——正式完成交割。玛氏以230亿美元收购了箭牌公司（Wm. Wrigley Jr. Company），相较于当时的股票交易价溢价达28%。面对这笔巨款，即便是现金储备极其雄厚、向来奉行“总资产回报率”（ROTA）和极端保守财务风格的玛氏，也需要借助外部杠杆。 ```mermaid flowchart TD accTitle: 玛氏收购箭牌交易的230亿美元出资结构 accDescr: 展示玛氏自有资金、高盛银行贷款以及伯克希尔哈撒韦提供的股债混合融资分配 subgraph Financing["230亿美元收购资金构成"] MarsCash["玛氏自有资金 110 亿美元"] GoldmanDebt["高盛银行贷款 57 亿美元"] subgraph BerkshireFunding["伯克希尔·哈撒韦：65 亿美元"] BRKDebt["优先债权：44 亿美元 (11.45% 高息)"] BRKEquity["优先股股权：21 亿美元 (附带丰厚股息)"] end end Financing --> Acquisition["全资收购箭牌公司 (Wrigley)"] ``` - **玛氏自有资金出资**：110亿美元现金。 - **高盛银团贷款**：提供57亿美元的银行债务融资。 - **伯克希尔·哈撒韦（Berkshire Hathaway）出资**：总计约65亿美元，包含44亿美元的高息借款（年利率高达令人咋舌的11.45%），以及向新成立的箭牌子公司投资的21亿美元优先股权，且条款中约定玛氏拥有未来赎回这笔股权的权利。 ### [03:00:20](https://www.youtube.com/watch?v=GyWJeY55x-8&t=10820s) 巴菲特的绝妙手笔与伯克希尔的巨额回报沃伦·巴菲特（Warren Buffett）在次贷危机期间的资本配置能力在这次交易中展现得淋漓尽致。玛氏利用旗下各业务的充沛现金流逐步清理昂贵杠杆：在债权部分，伯克希尔贷出的44亿美元凭借11.45%的年利率，在存续的5年间净赚了25亿美元纯利息。2013年，玛氏选择在到期日前提前偿清这笔借款，为此还额外向巴菲特支付了6.8亿美元的提前赎回溢价。仅在债权投资上，伯克希尔收回了44亿美元本金外加31亿至32亿美元的收益。在股权部分，2016年玛氏正式回购伯克希尔持有的股权，巴菲特以46亿美元的价格将股权卖回给玛氏。相较于最初投资的21亿美元，不仅股权本身翻倍有余，且巴菲特持有的是附带分红的优先股，这期间极可能还收取了约10亿美元的额外股息。整笔65亿美元的投资在约8年时间里收益几乎翻番。这笔交易之所以同时引入高盛和伯克希尔，背后有深层的商业考量。玛氏向来极度迷恋“仅使用自身现金”、几乎不与外部投行打交道，缺乏现成的投行信贷网络；而高盛正是巴菲特首选的银行，巴菲特的介入直接撬动了高盛的大规模借款。更关键的是，在雷曼轰然倒塌、全市场人心惶惶的2008年10月，若非巴菲特亲自站台注入确定性与声誉背书，箭牌的股东们根本不敢投票批准这项交易。 ### [03:03:56](https://www.youtube.com/watch?v=GyWJeY55x-8&t=11036s) 口香糖的暴利密码与向宠物医疗服务的惊人跃进口香糖本身的商业属性甚至优于巧克力糖果。巧克力原料可可成本高昂且波动剧烈，而口香糖的胶基很大一部分来自石油工业的副产品——固特异（Goodyear）轮胎公司长期以来就是箭牌的核心供应商之一。将廉价的石化副产物加上香精，包装成知名品牌（还包括旗下的 Altoids 和 Lifesavers 糖果）卖给大众，利润率极其惊人。在被玛氏收购前的十年里，箭牌常年保持约50%的毛利率和20%的净利润率。进入2000年代后，玛氏悄然掀起了一场彻底颠覆公司基因的战略变革——从宠物食品制造大举进军宠物医疗服务领域： - **收购 Banfield 宠物医院**：全美最大的连锁宠物医院，最初与大型宠物零售商 PetSmart 合作开设在门店内部。玛氏于2007年收购大量股份，并在2015年彻底买下 PetSmart 手中的份额，实现100%全资控股。 - **收购 VCA 医疗集团**：2017年，玛氏斥资约90亿美元巨资，全资收购了全美最大的独立兽医连锁医院运营商 VCA。这标志着玛氏从纯粹的实体快消品制造业，跨界迈向高度依赖人力的专业医疗服务业。这一转型的战略锚点始于2002年玛氏对法国处方粮品牌皇家宠物食品（Royal Canin）的收购。伴随现代社会中宠物“家庭成员化”和拟人化的趋势，针对老龄化、关节健康等特定疾病的宠物处方粮市场迎来爆发式增长。处方粮的销售极度依赖兽医推荐，通过整合 Banfield 与 VCA 等头部线下宠物诊所，玛氏成功锁定了宠物处方粮的核心分销渠道和高价值链条。尽管制造糖果和运营兽医诊所所需的组织能力截然不同，但玛氏长期实行极度去中心化、小总部（small head office）的管理架构，日常决策权下放给各个独立的运营业务群，董事会掌握最高战略权，避免了外行指导内行的内耗。从并购方法论来看，玛氏在多起重磅收购中从市盈率（P/E）角度看似乎都在“高位接盘”——收购箭牌时估值达35倍市盈率（较市价溢价27%），收购皇家宠物食品时给出了39倍市盈率。但正如播客中引述投资者常谈的洞见：当外界因为不了解行业本质而将市盈率倍数作为估值的“钝器”时，真正深度理解产业价值的运营者却能进行远比市场更精准的承保与定价（underwrite），并在自知之明中获得充足的安全边际。 ### [03:08:58](https://www.youtube.com/watch?v=GyWJeY55x-8&t=11338s) 收购战略：“先子弹后炮弹”与 KIND Bar 的全球化主持人回顾了玛氏（Mars）在并购上的独特风格。当年玛氏以高达 35 倍的市盈率竞购口香糖巨头箭牌（Wrigley），或是逐步增持宠物连锁医院 Banfield 时，外界往往认为他们出价过高。但正如 Worldly Partners 的研究所指出的，玛氏奉行的是“先开枪试探，再打加农炮”（shoot bullets not cannonballs）的策略：先通过持有一小部分股权深入理解该业务，积累了足够的内部信息与认知底牌后，再果断以高估值拿下控股权或全资收购。因此，外人眼中的“高价接盘”，很可能是因为玛氏早已看清了旁人未曾洞察的内在价值。这一打法在玛氏 2020 年完成的 KIND Bar（健司坚果棒）并购案中再次得到验证。玛氏先在数年前买下小部分股权，随后在 2020 年以约 50 亿美元将其完全收入囊中。当时的 KIND 在美国本土的年营收已达约 15 亿美元，但业务几乎全部集中在美国境内。而其在国内迅速蹿红的关键，正是成功打入了星巴克（Starbucks）的收银台结账区。作为仅含 5 克糖、口感绝佳且配料表干净的健康零食，它完美契合了星巴克消费者的冲动购买需求。玛氏接手后，依托其遍布全球的分销网络迅速将 KIND 推向国际市场。这不仅是一次商业层面的巨大胜利，也是玛氏抵御传统高糖糖果销量下滑的完美对冲战略。 ### [03:10:44](https://www.youtube.com/watch?v=GyWJeY55x-8&t=11444s) 359 亿美元豪赌 Kellanova：向雀巢看齐的超级交易 2024 年 8 月，玛氏宣布与包装食品巨头 Kellanova 达成最终收购协议，交易金额高达 359 亿美元。Kellanova 本质上是家乐氏（Kellogg's）剥离北美传统谷物早餐业务后剩下的优质资产主体，囊括了其利润丰厚、增速极快的全球零食业务及国际谷物业务，旗下坐拥品客薯片（Pringles）、Rice Krispies Treats、Eggo 华夫饼、Pop-Tarts 以及蛋白棒品牌 RXBAR。这意味着收购完成后，玛氏将同时把坚果棒巨头 KIND 与主打极简成分的 RXBAR 收入囊中。这场交易是自 2015 年卡夫（Kraft）与亨氏（Heinz）合并以来整个消费包装品（CPG）行业规模最大的并购案。目前《福布斯》对拥有 500 亿美元年营收的玛氏家族估值约为 1,170 亿美元（大致对应其企业价值）。拿出 359 亿美元巨资吞并 Kellanova，对玛氏而言是一场真正意义上的脱胎换骨。为了筹集资金，一向资金充裕、极少涉足公开资本市场的玛氏甚至开始发行投资级债券借力杠杆。这也标志着玛氏正在全面对标其多年来的终极宿敌——年营收超千亿美元、业务高度多元化的雀巢（Nestlé）。 ```mermaid flowchart TD accTitle: Kellanova Portfolio Acquired by Mars accDescr: Kellanova's snack and international portfolio being absorbed into Mars Inc. subgraph Kellanova["Kellanova (家乐氏拆分主体，359亿美元)"] K1["全球零食品牌: Pringles / Pop-Tarts / Rice Krispies"] K2["蛋白棒业务: RXBAR"] K3["国际谷物早餐业务"] end subgraph MarsSnacking["玛氏休闲食品板块 (原约180亿美元)"] M1["传统糖果: M&M's / Snickers"] M2["口香糖: Wrigley"] M3["健康零食: KIND Bar"] end K1 & K2 & K3 --> MarsCombined["玛氏全新产品矩阵 (全面抗衡雀巢千亿级体量)"] M1 & M2 & M3 --> MarsCombined ``` ### [03:13:25](https://www.youtube.com/watch?v=GyWJeY55x-8&t=11605s) 伪装成糖果商的宠物帝国：真实的玛氏业务版图节目的两位主持人揭开了全期节目一直埋下的巨大“反转”：外界普遍将玛氏视为一家糖果公司，然而事实恰恰相反。在玛氏超过 500 亿美元的年营收中，涵盖所有糖果与零食的 Mars Snacking 部门仅贡献了 180 亿美元；而宠物护理（Pet Care）业务占比高达 59%，成为绝对的营收支柱。在公司 14 万名员工中，有近 10 万人服务于宠物业务部门，且 2022 年上任的现任首席执行官同样出自该部门。玛氏本质上是一家附带生产糖果的庞大宠物公司，并且这一基因早在老福雷斯特·玛氏（Forrest Mars Sr.）初入英国收购狗粮工厂时便已深植其中。宠物板块的统治地位很大程度上得益于其近年来对兽医服务市场的全面整合。全美约有 3.5 万至 4 万家宠物诊所，而玛氏旗下的连锁医院（包括 Banfield 和 VCA 等）就拥有整整 3,000 家，占据了约 8% 的全美兽医网点份额，是全美无可争议的最大宠物医疗霸主。在糖果竞争格局方面，美国市场已被玛氏与好时（Hershey）双寡头瓜分，两者各占约 24% 的市场份额；但在广阔的国际糖果市场中，行业高度碎片化，即便身居全球第一的玛氏也仅占据 11% 份额，排名前五的巨头（玛氏、亿滋、费列罗、好时、雀巢）合计仅占三分之一市场，海外依然存在极其庞大的长尾中小企业整合空间。 - **玛氏营收结构**：总营收突破 500 亿美元（2021 年为 450 亿，2022 年为 470 亿，2023 年为 500 亿），其中宠物护理占 59%，休闲零食部门为 180 亿美元。 - **员工分布**：全球 140,000 名员工中，有近 100,000 人属于宠物护理板块。 - **兽医网络**：在全美 3.5 万至 4 万家宠物医院中独占 3,000 家（占比约 8%），遥遥领先于其他私募股权组建的诊所网络。 - **糖果市占率**：美国本土玛氏与好时各占约 24% 呈现双寡头垄断；全球市场玛氏以 11% 领跑，前五强合计仅占 33%，长尾整合潜力依然巨大。 ### [03:17:15](https://www.youtube.com/watch?v=GyWJeY55x-8&t=11835s) 商业权力剖析：规模经济与品牌价值的辩题节目进入了基于汉密尔顿·赫尔默（Hamilton Helmer）《七大商业权力》（7 Powers）框架的复盘分析环节。赫尔默界定的七项能够产生持续超额利润的核心壁垒包括：逆向定位（Counter-Positioning）、规模经济（Scale Economies）、网络效应（Network Economies）、转换成本（Switching Costs）、过程权力（Process Power）、品牌（Branding）以及锁定资源（Cornered Resources）。两位主持人一致指出，在商业史上所有最庞大的超级企业中，**规模经济**几乎总是占据决定性统治地位的权力基石。这类企业往往处于体量极其庞大的目标市场中，借助高毛利业务模型建立起极度庞大的固定成本基础设施（如全球供应链制造网络、分销体系），随后凭借海量销量将相对较小的固定成本平摊殆尽，从而产生无比强劲的经营杠杆（Operating Leverage）。从重型制造业、软件业到现代云计算，无一例外依托此法。随后，主持人引出社群中热议的**品牌（Branding）**权力：在赫尔默的经典定义中，品牌的终极考验在于，若将两款物理属性完全一致的产品并排摆在消费者面前，消费者是否愿意为那个拥有更好品牌的商品支付更高的溢价。 ### [03:19:06](https://www.youtube.com/watch?v=GyWJeY55x-8&t=11946s) 品牌力的新定义：以销量累积绝对利润在探讨《7 Powers》（七大商业战略维度）时，Ben 与 David 针对玛氏（Mars）的品牌力（Brand Power）展开了深刻辩论。传统意义上，品牌力通常体现为定价比无品牌商品更高而获得的溢价（如 Tiffany 钻戒对比普通戒指）。在上期节目中，他们曾提到宜家（IKEA）没有品牌力，但随后反思这显然不符合直觉——宜家虽不靠品牌获取高毛利率，却将品牌力投入到了另一种商业形态中。玛氏同样如此：士力架（Snickers）并不能比普通糖果棒卖得更贵，玛氏没有通过提价来变现品牌，但消费者在货架前绝不会去买那些来路不明、缺乏安全感和信任感的杂牌糖果，而是坚定选择士力架。有 Slack 社群听众指出，对于糖果这类高频复购商品，品牌力其实可以转化为“共享规模经济”（Scale Economies Shared）形式的销量优势。当两款产品价格相仿时，消费者因极度信任成熟品牌而持续购买，这使得公司能够在用户终生周期中收获极为庞大的绝对利润总额（Total Lifetime Margin Dollars），而非单纯的高毛利率百分比（Margin Percentage）。 - **品牌力的变现方式**：不依赖提高产品单价（Take price），而是通过建立消费者信任壁垒来推高销量（Drive volume）。 - **终身利润逻辑**：在日常高频复购的消费品中，长期稳定的复购累积出巨额的绝对利润美元。 --- ### [03:20:27](https://www.youtube.com/watch?v=GyWJeY55x-8&t=12027s) 独占资源、制程权力与宠物业务的超级转换成本转向其他竞争壁垒时，主播们认为糖果行业如今已经没有所谓的“独占资源”（Cornered Resources）或“制程权力”（Process Power），没有任何一家糖果厂商掌握着外人无法复制的独家生产秘方。不过，老福里斯特·玛氏（Forrest Mars Sr.）向来追求行业顶尖的设备与技术，他和员工以及外部顾问研发出无数生产线技术改良，但出于防范竞争对手的考虑，玛氏一律不申请专利，而是作为最高商业机密（Trade Secrets）暗中封存。至于规模超越糖果的宠物护理业务（Pet Care），其核心壁垒毫无疑问是极高的“转换成本”（Switching Costs）。宠物食品拥有天然的生理转换门槛：如果一只狗吃某款狗粮没有肠胃不适，宠物主绝不会轻易冒险换粮，否则极易引发腹泻和消化问题；而更为深厚的护城河则是玛氏旗下的连锁宠物医院（如 VCA、Banfield），兽医与就诊体系的更换成本极高，构成了宠物板块真正的战略基石。 ```mermaid flowchart TD accTitle: 玛氏宠物的护城河结构 accDescr: 展示宠物食品的消化耐受壁垒与宠物医院的高转换成本如何锁定消费者 subgraph Food ["宠物食品业务 (Pedigree, Whiskas 等)"] A["长期稳定喂食单一品牌"] --> B["换粮引发宠物肠胃消化问题"] B --> C["宠物主产生风险厌恶，极度抗拒换粮"] end subgraph Health ["宠物医疗业务 (VCA, Banfield)"] D["定点兽医与宠物健康档案"] --> E["极高的医疗就诊与信任转换成本"] end C --> F["高粘性复购与持久客户终生价值"] E --> F ``` --- ### [03:22:11](https://www.youtube.com/watch?v=GyWJeY55x-8&t=12131s) 商业打法：营销不仅是辅助，更是基业长青的核心进入“商业打法”（Playbook）复盘，两人探讨了一个反直觉的命题：伟大的营销（Great Marketing）而非仅仅是好产品（Great Product），同样能建立起经久不衰的庞大帝国。习惯了科技行业“产品力制胜”（如 Meta 靠产品实现自驱增长）的逻辑，面对玛氏不得不承认：自 1960 年代电视普及以来，这门生意在本质上变成了全美顶尖营销叙事与渠道铺设的较量。这引出了好莱坞影史最著名的植入赞助反转：1970 年代末至 1980 年代初斯皮尔伯格筹拍电影《E.T. 外星人》（E.T. the Extra-Terrestrial）时，剧本原定让小男孩用一条 M&M's 巧克力豆轨迹引诱外星人进屋。然而，环球影业要求品牌方绑定至少 100 万美元的联合营销推广与陈列投入。正值二代兄弟掌权初期，玛氏由于对 IP 授权心存顾虑且地位未稳，断然拒绝了该协议；好时（Hershey）管理层起初也打算回绝，幸得一位内部人士破釜沉舟从其他预算中挤出 100 万美元抢下赞助，改用当时刚推出不久、销量正走下坡路的无名新品——Reese's Pieces。 - **销量暴增三倍**：《E.T. 外星人》上映后成为影史奇迹，带动 Reese's Pieces 的销量暴增至原先的 3 倍。 - **持久商业遗产**：尽管 Reese's Pieces 终究未能撼动 M&M's 在大众市场的霸主地位，但经此一役，它永久确立了在全美电影院小卖部（Concession Stands）的常驻货架地位。 - **不可撼动的品牌印记**：糖果业与奢侈品极为相似，一旦在消费者童年建立起强烈的情感记忆与文化认同，品牌便几乎不可杀死（"Impossible to kill"）——好时历经数十载经营失误，在全美心中依然是巧克力的代名词。 --- ### [03:26:17](https://www.youtube.com/watch?v=GyWJeY55x-8&t=12377s) 玛氏的超级 IP 营销法：从登月飞船到换色全民公投虽然错失了《E.T.》，但玛氏在品牌心智绑定上的造诣堪称消费品界的“迪士尼”（Disney Playbook）。他们擅长将自身旗下产品与全球最具文化统治力的符号深度绑定： 1. **经典节日符号**：1990 年代起推出的圣诞经典广告中，红黄 M&M's 人偶与从烟囱下来的圣诞老人撞个正着并双双惊呼昏厥（"They do exist!"），这则广告连续播放了数十年，化身为美国家庭圣诞记忆的一部分。 2. **顶流文化与体育合作**：滚石乐队（The Rolling Stones）的热门单曲《(I Can't Get No) Satisfaction》被引入士力架广告；士力架更与 NFL（国家美式橄榄球联盟）以及奥运会等世界级体育赛事紧密联名。 3. **NASA 太空飞船菜单**：M&M's 成为宇航员飞入太空航天飞机的官方口粮之一，宇航员在零重力舱内追逐漂浮 M&M's 的趣味录像，构成了免费且无可替代的全球公关展示。 4. **技术领先的 3D 动画人偶**：早在 1994 年——紧随 1993 年《侏罗纪公园》开启电影 CGI 纪元的后一年——玛氏便率先在广告行业引入了高精度的全 3D 电脑合成 M&M's 拟人角色，打造出数十年的常青形象。 5. **1995 年的换色大公投**：1995 年，玛氏宣布淘汰乏味沉闷的棕褐色（Tan）M&M's，并发起轰动全美的公开投票决定替代色，最终蓝色（Blue）高票胜出。这场活动以近乎零成本的原料调整，掀起了一场席卷全社会的现象级消费狂欢。 ### [03:28:59](https://www.youtube.com/watch?v=GyWJeY55x-8&t=12539s) 消费者营销策略：颜色投票与隐秘配比关于消费品营销，玛氏（Mars）展现了极其出色的公众参与手段。当年为了更换 M&M's 糖豆的颜色，玛氏其实并不在乎最终换上什么颜色，颜色变更对生产底层的实际影响微乎其微。但他们推出了 "1-800-FUN-COLOR" 热线电话，吸引了数以百万计的美国人亲自拨打电话进行投票。这种让消费者深度参与决策的方式，赋予了每个人一种主人翁意识（vested interest）。最终蓝色胜出并取代了棕褐色（tan），宣布结果当晚，玛氏甚至直接将帝国大厦（Empire State Building）的灯光全部打成蓝色。这种策略正如 Facebook 在早期国际化时，让各个本地市场的用户亲自翻译界面，从而让用户对产品产生强烈的归属感一样。除了外部的营销活动，玛氏在内部产品运营上也极具心机。玛氏会根据当代消费者的口味偏好，不断微调每包 M&M's 中不同颜色的混合配比。这种具体的颜色配比至今仍是公司的机密，但他们始终在幕后持续动态平衡这一数据。 --- ### [03:30:10](https://www.youtube.com/watch?v=GyWJeY55x-8&t=12610s) 抗周期性、高复购率与糖分依赖的隐忧商业宝典（Playbook）中另一个核心点在于“具备抗衰退属性”（Recession-proof business）。在研究深入后会发现，不仅糖果具有抗衰退性，宠物食品同样如此。在经济下行周期，人们不仅不会停止购买糖果，更绝不可能停止给宠物喂食，尤其在如今宠物已被视作家庭成员的时代。回顾 2008 年金融危机，玛氏旗下的糖果和宠物食品两大业务都未曾受到经济周期的打击。与抗周期性相辅相成的是产品的“普遍性”（Universality）。根据食品协会（Food Institute）的调查数据显示： - 全美 98% 的家庭每年都会购买糖果。 - 在这些家庭中，97% 的购买属于复购行为，平均每年购买频次高达 35 次。这种商业模式让人联想到星巴克（Starbucks）：糖分具有类似成瘾的消费习惯。尽管摄入过量糖分对身体健康的危害远甚于咖啡，也引发了关于驱动全民糖分摄入增长的道德审视，但这确实推动了玛氏原始核心业务的爆发式增长。这也是为什么玛氏近年来积极拓展产品线，收购 KIND 坚果棒和 Kellanova（家乐氏零食业务）等品牌进行健康化多元布局。然而，无论健康风潮如何盛行，或是司美格鲁肽（Ozempic）等减肥药如何普及，M&M's 和士力架（Snickers）依然屹立不倒，目前的统计数据显示巧克力的整体销售额仍处于历史高位。 --- ### [03:32:11](https://www.youtube.com/watch?v=GyWJeY55x-8&t=12731s) 巧克力的食品本质与气候变化的双重冲击从宏观行业来看，巧克力不仅是零食，它本质上是一种高度复杂的“完全食品”（complete food）。当年米尔顿·好时（Milton Hershey）关闭焦糖业务转向巧克力时就断言：“焦糖只是一种脂肪，但巧克力是一种完整的食物。”相比软糖类糖果，巧克力面临 Ozempic 的替代风险要低得多。然而，整个巧克力产业正面临气候变化带来的深远变革： ```mermaid flowchart TD accTitle: 气候变化对巧克力产业链的双重冲击 accDescr: 展示气候变化对可可树生长的直接影响，以及行业为应对危机推行基因改良所带来的次生效应。 subgraph DirectImpact["一阶效应：生长环境脆弱与减产"] A["可可树生长条件极为苛刻 (仅生长在特定温度与气候带)"] B["果荚直接生长于树干上 (长达百年寿命中仅约25年高产)"] C["全球变暖导致生长环境失衡，产量受挫"] A --> C B --> C end subgraph Response["二阶效应：行业应对与基因改良"] D["数十年基因工程与杂交育种"] E["优先提升抗病害韧性与极限产量"] F["风味被忽视：失去千年来丰富的复杂风味"] D --> E E --> F end C --> Response ``` - **一阶效应（生长瓶颈）**：可可树是一种非常奇特且敏感的植物，橄榄球大小的果荚直接长在主干上，而不是树枝上。一棵树寿命虽然超过百年，但能够高产产出可用于制作巧克力的果实的时间只有大约 25 年，从种植到产出的周期极其漫长，且对生长气候区间的容忍度极窄。全球气候变化已经对可可豆的自然产量造成了严峻打击。 - **二阶效应（产业应对与风味代偿）**：为了保住供应，过去几十年整个行业投入巨资进行基因改造、杂交与育种优化，旨在提升可可树的抗逆性（resiliency）和单位产量。然而，这一过程过度追求抗性和产量，却牺牲了风味（taste）。现代巧克力的复杂口感正在流失，这也成为了当前玛氏乃至整个巧克力行业面临的生死存亡级议题。 --- ### [03:35:52](https://www.youtube.com/watch?v=GyWJeY55x-8&t=12952s) 集团化并购能力与百年 14% 的复合增长商业宝典的最后两个核心洞察是“卓越的多元化并购能力”以及“极长的商业存续期（Duration）”： 1. **去中心化的集团运作（Conglomeration Done Well）**：玛氏在初创的前五年内就在两个完全不同的地域同时运营完全不同的两套业务，早早锤炼出了并购整合的能力。他们清楚哪些需要中心化管理（极少部分），哪些应该完全去中心化（绝大部分）。玛氏不走传统私募股权（PE）买入卖出的套路，而是类似 LVMH 集团伯纳德·阿尔诺（Bernard Arnault）的风格——“长期持有且不换标”。自 1990 年代以来，玛氏完成了约 30 次收购，而 2015 年至今仅剥离过 2 项资产；即便是对于 VCA 和 Banfield 这样的宠物医院连锁业务，他们也完全保留各自的独立品牌运作。 2. **长青的增长飞轮**：纵观过去整整 100 年，玛氏的营收年复合增长率（CAGR）达到了惊人的 14%。能够维持一个世纪的高速增长，依赖于几个关键因素的合力：全球通用的产品属性、买入初级大宗商品并转化为高溢价品牌的利润结构、严苛的运营效率、极高频次且伴随成瘾习惯的复购属性，以及在多条赛道上跨越数十年牢牢维持市占率第一的规模经济效应。 --- ### [03:37:57](https://www.youtube.com/watch?v=GyWJeY55x-8&t=13077s) 核心精髓：被低估的企业家老弗雷斯特·玛氏在节目的收尾环节“核心精髓”（Quintessence）中，主播们讨论了回顾整期故事后最挥之不去的终极感悟：老弗雷斯特·玛氏（Forrest Mars Sr.）绝对是商业史上最顶级的硬核传奇人物（a freaking G）。正因为玛氏公司极端隐秘且完全私有化，外界大众对他知之甚少。但他展现出的商业洞察、组织魄力与管理天才，完全有资格与沃尔玛的萨姆·沃尔顿（Sam Walton）、汽车大王亨利·福特（Henry Ford）以及洛克菲勒（Rockefeller）等美国商业史上最伟大的企业家并列。尽管像绝大多数伟大的商业巨头一样，他在个人生活和性格上充满复杂性甚至缺陷，但在商业战略和企业家领导力层面，他无疑是那个时代最顶尖的天才之一。 ### [03:38:51](https://www.youtube.com/watch?v=GyWJeY55x-8&t=13131s) 玛氏的本质：第一家现代企业与极端的“路径依赖” 两位主持人首先探讨了玛氏（Mars）作为商业组织的本质。在未系统研究可口可乐（Coca-Cola）或宝洁（Procter & Gamble）的前提下，他们认为玛氏完全称得上商业史上最早的“现代企业”之一。早在 20 世纪 30 年代，福雷斯特·玛氏（Forrest Mars）所推行的举措在当时看来惊世骇俗，如今却已是商业社会的通行准则：从开放式办公空间、业务多元化、敏锐预见到猫狗将成为家庭成员并进军宠物食品，到通过极限提升设备稼动率实现极致效率，再到运用科学化管理和率先大规模投放电视广告。尤其是 M&M's 的市场研究与定位——将一款几乎濒临失败的产品重新包装，精准区分出实际消费者（孩子）与目标购买者（父母），并据此定制营销信息，其超前程度令人叹为观止。这一切引出了本期节目的核心总结（Quintessence）：玛氏的成功具备极强的“路径依赖”（Path Dependence）。今天哪怕完全复制福雷斯特·玛氏的所作所为，也绝不可能再造一家玛氏。他的成功不可分割地镶嵌在特定的时代、技术与竞争格局中。他身上必须带着与父亲弗兰克紧张关系所留下的心结（chip on his shoulder）；若非父亲终于发迹，他根本无缘进入耶鲁大学并接触到杜邦式的现代管理精髓；若非父亲把他“流放”去欧洲并提供起步资产，他也不会以极度进取的美国资本家姿态，去降维打击英国那些深受贵格会（Quaker）和平主义与教条束缚的传统对手。同时，机械化浪潮、现代超市的铺开以及电视商业广告的黄金时代，精准地与他的商业动作咬合在一起。正因如此，后人无法照搬剧本，伟大的企业永远只能走出自己的路。 ```mermaid flowchart TD accTitle: 福雷斯特·玛氏打造商业帝国的路径依赖分析 accDescr: 展示福雷斯特·玛氏个人背景与特定历史环境交织下不可复制的成功要素 subgraph Origin ["个人背景与驱动力"] A["与父亲的紧张关系与竞争心结"] --> B["耶鲁教育背景 接触杜邦科学管理思想"] B --> C["获得欧洲业务资产 与独立起步资本"] end subgraph Era ["特定历史窗口与宏观环境"] D["进取型美国资本主义 VS 英国传统贵格会对手"] E["机械化生产与设备极致利用"] F["超级市场渠道普及与电视广告黄金期"] end Origin --> G["玛氏现代商业帝国"] Era --> G ``` ### [03:41:56](https://www.youtube.com/watch?v=GyWJeY55x-8&t=13316s) 趣味冷知识：好时信托与坐拥百亿美元捐赠基金的学校在进入 Carve Outs 推荐环节前，主持人抛出了一个令人咋舌的商业冷知识：拥有好时（Hershey）控股权的好时信托（Hershey Trust），其核心宗旨是资助并运营米尔顿·好时学校（Milton Hershey School）。这所学校最初由米尔顿·好时创立，旨在为孤儿提供教育，如今主要招收来自低收入家庭或需要救助的学生。这所涵盖中低年级教育的学校，其捐赠基金（Endowment）规模高达惊人的 174 亿美元，不仅稳坐全美中学之首，在全世界所有中学甚至多数大学中也是首屈一指。考虑到米尔顿·好时学校的总在校生仅有约 2,200 名学生，其生均捐赠基金金额无疑是全球最高的。按照每年常规提取 4% 的收益率计算，仅年均投资收益就将近 7 亿美元，而运营一所两千余人规模的寄宿学校根本无法花完这笔庞大财富。这也解释了为何当初节目录制前，两位主持人在好时与玛氏之间纠结良久——尽管玛氏体量更大且更具代表性，但好时创始人将整个公司全部托付给孤儿学校信托的故事，其戏剧性与不可思议的程度丝毫不逊于玛氏。 - 米尔顿·好时学校捐赠基金规模：约 174 亿美元。 - 全校在读学生人数：约 2,200 人。 - 治理结构特性：好时信托作为好时公司的第一大控股股东，其核心法律使命即为不间断地维系和资助该学校的运转。 ### [03:43:41](https://www.youtube.com/watch?v=GyWJeY55x-8&t=13421s) Carve Outs（一）：Dandelion 手工巧克力与奢华降临节日历进入节目传统的 Carve Outs 分享环节，两人不约而同地把目光投向了精品巧克力品牌 Dandelion Chocolate。该品牌是“从可可豆到排块”（Bean-to-Bar）手工巧克力运动的代表，拒绝采购大宗工业可可豆，而是严选单一产区（Single Origin）优质可可豆，人工挑除所有瑕疵豆，以接近精品酿酒的匠心工艺制作排块。两位主持人特别致谢了 Dandelion 团队的 Todd 和 Elaine 带领他们实地参观旧金山工厂，全景式展示了现代精细化巧克力制作的每一个工序。 David 更是盛赞了 Dandelion 推出的圣诞降临节日历（Advent Calendar）。他为自己和妻子 Jenny 抢购了一款双人份套装，并直呼这是“人类有史以来最伟大的降临节日历”。整套日历的装帧、设计与仪式感极强，仿佛出自爱马仕（Hermès）之手——每一天打开都是一个可以直接挂在圣诞树上的精美挂饰，里面包裹的巧克力更是联合了全美乃至全球顶尖的手工巧克力大师特别定制，将精湛工艺与节日浪漫演绎到了极致。 ### [03:45:23](https://www.youtube.com/watch?v=GyWJeY55x-8&t=13523s) Carve Outs（二）：特斯拉 Model Y 移动补胎、美剧《羊毛战记》与《小鬼当家》的父母视角 Ben 分享了自己的第二个推荐：特斯拉 Model Y 及其实体售后服务。近日他外出时发现车胎被一枚螺栓扎穿漏气，通过特斯拉手机 App 报修后，移动服务车在 90 分钟内就抵达了他家门口。技术人员利落地卸下受损车轮、装上备用临时轮让他得以立刻恢复用车；两天后售后团队再次登门，将修补完好充气完毕的原装轮毂换回，收回备用车轮。全程无需去维修店排队，总费用仅约 120 美元。这种极致便捷的体验让两人大为赞叹，将其形容为“当代汽车界的福特 T 型车”。Ben 的第三个推荐则是 Apple TV+ 播出的科幻剧集《羊毛战记》（Silo）第二季。虽然 David 仍坚持只读休·豪伊（Hugh Howey）的原著小说《羊毛战记》（Wool），但 Ben 认为该剧打破了许多剧集“第二季后劲不足”的魔咒，制作维持了极高水准。 David 则分享了他重温经典节日电影《小鬼当家》（Home Alone）的全新感悟。童年时期与主演麦考利·卡尔金（Macaulay Culkin）同龄的他曾无比痴迷这部电影，而刚经历完感恩节家庭长途出行的他，如今彻底理解了片中父母为何会手忙脚乱遗落孩子。他随后分享了一段令人捧腹的尴尬亲身经历：在刚过去的感恩节，他带着三岁的女儿搭乘长达五个半小时的航班回宾夕法尼亚探亲，途中女儿在后座全程吵闹并不停踢前座的座椅，让他感到极度自责和难堪。不料落地后，正前方那位受尽折磨的乘客转过身来，问了一句：“请问你是 Acquired 播客的 David 吗？”在 David 尴尬地连声道歉时，对方竟然笑着亮出耳机：“没事，我这一路都在听你的节目！”甚至同排的其他乘客也认了出来，机舱瞬间变成了小型听友见面会。 ### [03:48:50](https://www.youtube.com/watch?v=GyWJeY55x-8&t=13730s) 感恩节航班上的听众偶遇与温情逆转在节目的轻松闲聊中，主持人分享了自己育儿经历中戏剧性的一幕。感恩节前夕，他带着女儿搭乘从旧金山（SFO）飞往费城的航班，女儿在长达五个小时的航程中不停地踢前面乘客的座椅靠背，这让他尴尬万分，心里默默祈祷“希望那个人千万别认出我是谁”，一度将其视为自己“为人父母生涯中的至暗时刻之一”。然而令人意想不到的是，机舱内突然有好几位乘客陆续走上前来打招呼，表示他们都是《Acquired》的忠实听众，不仅在飞机上收听节目，还热情地分享各自最喜欢的往期单集。这次偶遇彻底扭转了局势，原本让人坐立不安的窘境转变为一段温暖美好的回忆，主持人在节目中真诚地向当天航班上的听众表达了谢意。 --- ### [03:49:32](https://www.youtube.com/watch?v=GyWJeY55x-8&t=13772s) 赞助商鸣谢与来自 Worldly Partners 的火星研究节目进入最后的鸣谢环节。主持人们首先感谢了合作伙伴 J.P. Morgan Payments、Crusoe 以及 Statsig，并引导听众查看节目简介了解更多信息。紧接着，他们向 Worldly Partners 的 Arvind Navaratnam 致以特别鸣谢。Arvind 撰写了一份关于玛氏（Mars）的长篇深度研究报告。主持人们指出，该报告中包含了大量受限于时长未能在节目中展开的宝贵数据： - 报告涵盖了丰富的历史图表与糖果行业多年来的统计数据。 - 深入分析了全美糖分消费演变趋势，以及好时（Hershey）、玛氏和整个行业竞争格局（Competitive Set）的详细剖析。 - 主持人极力推荐听众去阅读这份完整的 PDF 研报，盛赞其质量极高。 --- ### [03:50:08](https://www.youtube.com/watch?v=GyWJeY55x-8&t=13808s) 巧克力行业专家致谢与旧金山早期巧克力冷知识主持人们继续向协助节目制作的巧克力业内专家表达敬意，包括 Dandelion Chocolate 的 Todd 和 Clara Shen，Clara 在准备期间深入分享了关于巧克力工业与玛氏运作的独到见解。此外，他们还感谢了吉塔德巧克力（Guittard Chocolate）的 Gary Guittard。Guittard 作为幕后优质供应商，为全球众多知名糖果公司提供基底巧克力，其中包括加州著名的时思糖果（See's Candies）。随后，主持人抛出了一则关于美国巧克力历史的趣味问答：在米尔顿·好时（Milton Hershey）于 1900 年开始大规模生产巧克力之前，全美已有三家成立更早的黑巧克力生产商，并且至今仍在运营。 ```mermaid flowchart TD accTitle: Pre-1900 American Chocolate Manufacturers accDescr: Three chocolate makers established before Milton Hershey started in 1900. subgraph Pre1900["1900年 Milton Hershey 涉足巧克力前的三大老牌厂商"] SF["旧金山湾区厂商 气候适宜，早在空调发明前即成为制造中心"] East["美东厂商 美国巧克力工业先驱"] end SF --> G1["Guittard （旧金山，优质原料巧克力大厂）"] SF --> G2["Ghirardelli （旧金山，百年经典品牌）"] East --> WB["Walter Baker & Company （马萨诸塞州，美国巧克力行业教父）"] ``` 主持人指出，旧金山在 19 世纪尚未普及空调的年代，凭借天然温和凉爽的气候，一举孕育了 Guittard 和 Ghirardelli 两家巧克力巨头；而马萨诸塞州的 Walter Baker's 则堪称美国巧克力的真正“教父”。 --- ### [03:51:41](https://www.youtube.com/watch?v=GyWJeY55x-8&t=13901s) 致谢《巧克力帝国》作者与往期节目推荐节目的重磅鸣谢献给了《巧克力帝国》（*The Emperors of Chocolate*）的作者乔尔·格伦·布伦纳（Joël Glenn Brenner）。她是历史上唯一一位真正获准进入神秘的玛氏公司内部进行深入采访的记者。主持人们盛赞该书是《Acquired》阅读过的最出色的商业历史著作之一，扣人心弦如同一部翻页停不下来的小说（"a total page turner"）。Brenner 在节目制作期间亲自与主持人交流，耐心地澄清了诸多细节，揭示了许多传奇故事背后的深层真相。在节目尾声，主持人为喜爱此类商业故事的听众推荐了多期相关单集： - 若对综合性商业帝国（Conglomerates）感兴趣，可收听关于 LVMH、索尼（Sony）以及伯克希尔·哈撒韦（Berkshire Hathaway）的往期节目。 - 若对复杂精细的制造工艺感兴趣，可收听诺和诺德（Novo Nordisk，司美格鲁肽/Ozempic 的制造商）专题。 - 针对前沿半导体领域，推荐收听 acq2 频道对 Arm Holdings 首席执行官雷内·哈斯（Rene Haas）的专访。最后，主持人们邀请听众加入 Slack 社区（acquired.fm/slack）参与讨论，并在节日祝福和标志性片尾音乐《Who Got the Truth》中向大家道别，结束了整期关于玛氏公司与巧克力商业历史的宏大叙事。 ## Notable quotes > [47:34](https://www.youtube.com/watch?v=GyWJeY55x-8&t=2854s) 午饭后没多久，真见鬼，老头子居然真搞出了一款糖果棒，那就是一杯巧克力麦芽饮品。他在上面浇了些焦糖，外面裹了一层巧克力——算不上什么好巧克力，他当时买的都是廉价货——但那该死的东西居然大卖特卖，甚至连广告都没做。 — Forrest Mars > [53:12](https://www.youtube.com/watch?v=GyWJeY55x-8&t=3192s) 去他妈的在偏僻山林里管矿山（the hell with running some mines in the Backwoods）。 — Forrest Mars > [01:08:03](https://www.youtube.com/watch?v=GyWJeY55x-8&t=4083s) 我想征服整个该死的世界（I want to conquer the whole goddamn world）！ — Forrest Mars > [01:14:50](https://www.youtube.com/watch?v=GyWJeY55x-8&t=4490s) 你可以雇佣律师、雇佣会计师，你可以雇佣广告人员或金融专家，但如果你想发大财，你就必须懂得如何制造产品；你休想雇任何人来替你造产品让你发财，他们只会为自己造产品发财。 — Forrest Mars > [01:20:25](https://www.youtube.com/watch?v=GyWJeY55x-8&t=4825s) 我不是个做糖果的，我是个具有帝国思维的人（I'm not a candy maker; I'm empire-minded）。 — Forrest Mars > [01:23:54](https://www.youtube.com/watch?v=GyWJeY55x-8&t=5034s) 我是一个有信仰的人，我为银河棒（Milky Way）祈祷！我为士力架（Snickers）祈祷！我为 M&M's 祈祷！ — Forrest Mars > [01:54:38](https://www.youtube.com/watch?v=GyWJeY55x-8&t=6878s) 你就告诉他，马尔斯来了。他只需要知道这个。 — Forrest Mars Sr. > [02:11:49](https://www.youtube.com/watch?v=GyWJeY55x-8&t=7909s) 只溶在口，不溶在手 — M&M's 广告语 > [02:31:16](https://www.youtube.com/watch?v=GyWJeY55x-8&t=9076s) 真正认真对待软件的人，应该自己做硬件。 — Alan Kay > [02:56:58](https://www.youtube.com/watch?v=GyWJeY55x-8&t=10618s) 我对玛氏和箭牌都进行了长达 70 年的味觉测试，它们都顺利通过了测试。 — Warren Buffett > [02:56:58](https://www.youtube.com/watch?v=GyWJeY55x-8&t=10618s) 低成本买入大宗商品，高溢价出售消费品牌 — Warren Buffett > [03:32:11](https://www.youtube.com/watch?v=GyWJeY55x-8&t=12731s) 焦糖只是一种脂肪，但巧克力是一种完整的食物。 — 米尔顿·好时 ## Mentioned Ben Gilbert, David Rosenthal, Mars, Incorporated, Frank Clarence Mars, Forrest Mars Sr., Forrest Mars Jr., John Mars, Jackie Mars, Ethel Kissack, Ethel Mars, Patricia Mars, Milton Hershey, Hershey, Nestlé, Henri Nestlé, Daniel Peter, Rodolphe Lindt, Jean Tobler, Cadbury, Rowntree, Smarties, The Austin Company, Pierre S. du Pont, DuPont, Chappel Brothers, Chappie, T. G. Rose, J.P. Morgan Payments, Crusoe, Statsig, Bluesky, M&M's, Snickers, Milky Way, Three Musketeers, Mars Bar, Mar-O-Bar, Baby Ruth, Ben's Original, Ted Bates & Company, Hershey-ets, Vendepac, Ethel M Chocolates, Skittles, Twix, Starburst, Kal Kan Foods, Pedigree, Whiskas, Dove, Wm. Wrigley Jr. Company, Warren Buffett, Charlie Munger, Berkshire Hathaway, Goldman Sachs, Banfield Pet Hospital, VCA, Royal Canin, KIND Bar, Kellanova, Kellogg's, Pringles, Hamilton Helmer, 7 Powers, E.T. the Extra-Terrestrial, Reese's Pieces, Steven Spielberg, LVMH, Bernard Arnault, Sam Walton, Henry Ford, John D. Rockefeller, Milton Hershey School, Hershey Trust, Dandelion Chocolate, Tesla Model Y, Silo, Home Alone, Worldly Partners, Arvind Navaratnam, Guittard Chocolate, Ghirardelli, Walter Baker & Company, Joël Glenn Brenner, The Emperors of Chocolate ## Video description M&M’s, Snickers, Milky Way, Double Mint, Ben’s Rice, Pedigree, Whiskas, VCA, Banfield… all the brands you know, owned by the company you know nothing about: Mars, Incorporated. And Mars itself is 100% owned and deeply intertwined with the Mars family, who are currently the second wealthiest (and perhaps first most secretive!) family in the United States. Tune in for one of the 20th century’s most incredible entrepreneurial stories across candy and pet care, and one that’s all the more incredible because it’s so little-known! *Links:* - Hershey’s M&M response: Hershey-ets: https://shop.hersheys.com/holiday/sweet-treats/032284016385.html - Worldly Partners Multi-Decade Mars Study: https://worldlypartners.com/wp-content/uploads/2024/12/Mars-Inc.pdf - Episode sources: https://www.acquired.fm/episodes/mars-inc-the-chocolate-story#sources *Carve Outs:* - Dandelion Chocolate: https://www.dandelionchocolate.com - The Dandelion Chocolate Advent Calendar: https://www.dandelionchocolate.com/products/2025-advent-calendar-preorder - Tesla Model Y + repair service: https://ts.la/ben11770 - Silo: https://www.imdb.com/title/tt14688458/ - Home Alone: https://www.imdb.com/title/tt0099785/ *More Acquired:* - Get email updates https://www.acquired.fm/email and vote on future episodes! - Join the Slack http://acquired.fm/slack - Check out the latest swag in the ACQ Merch Store https://www.acquired.fm/store! _Note: Acquired hosts and guests may hold assets discussed in this episode. This podcast is not investment advice, and is intended for informational and entertainment purposes only. You should do your own research and make your own independent decisions when considering any financial transactions._ [Source](https://www.youtube.com/watch?v=GyWJeY55x-8)

Source quotes

[47:34] Forrest Mars: 午饭后没多久，真见鬼，老头子居然真搞出了一款糖果棒，那就是一杯巧克力麦芽饮品。他在上面浇了些焦糖，外面裹了一层巧克力——算不上什么好巧克力，他当时买的都是廉价货——但那该死的东西居然大卖特卖，甚至连广告都没做。 [53:12] Forrest Mars: 去他妈的在偏僻山林里管矿山（the hell with running some mines in the Backwoods）。 [68:03] Forrest Mars: 我想征服整个该死的世界（I want to conquer the whole goddamn world）！ [74:50] Forrest Mars: 你可以雇佣律师、雇佣会计师，你可以雇佣广告人员或金融专家，但如果你想发大财，你就必须懂得如何制造产品；你休想雇任何人来替你造产品让你发财，他们只会为自己造产品发财。 [80:25] Forrest Mars: 我不是个做糖果的，我是个具有帝国思维的人（I'm not a candy maker; I'm empire-minded）。 [83:54] Forrest Mars: 我是一个有信仰的人，我为银河棒（Milky Way）祈祷！我为士力架（Snickers）祈祷！我为 M&M's 祈祷！ [114:38] Forrest Mars Sr.: 你就告诉他，马尔斯来了。他只需要知道这个。 [131:49] M&M's 广告语: 只溶在口，不溶在手 [151:16] Alan Kay: 真正认真对待软件的人，应该自己做硬件。 [176:58] Warren Buffett: 我对玛氏和箭牌都进行了长达 70 年的味觉测试，它们都顺利通过了测试。 [176:58] Warren Buffett: 低成本买入大宗商品，高溢价出售消费品牌 [212:11] 米尔顿·好时: 焦糖只是一种脂肪，但巧克力是一种完整的食物。

Source quotes

[42:08] Forest Mars: I'll be damned if a short time after our lunch the old man has a candy bar and it's a chocolate malted drink... he put some caramel on top of it and some chocolate around it... and that damn thing sold. [53:13] Forest Mars: the hell with running some mines in the Backwoods [68:03] Frank Mars: we're making enough money we have an airplane we've got the fishing place we've got horses why do we need anymore [68:03] Forest Mars: I want to conquer the whole goddamn world. [74:50] Forest Mars: you aren't going to hire anybody to make a product for you to make you rich. They'll only make it for themselves [84:22] Forest Mars: I'm a religious man... I pray for Milky Way, I pray for Snickers, I pray for M&M's! [84:22] Forest Mars: I'm not a candy maker. I'm empire-minded. [117:29] The milk chocolate that melts in your mouth, not in your hand. [117:29] Deborah Cadbury: one great TV campaign could shift Decades of Customer Loyalty in a matter of weeks, [151:16] Alan Kay: anyone who's serious about software should make their own Hardware [260:54] Warren Buffett: I've been conducting a 70-year taste test on both Mars and Wrigley and they both passed the test. [260:54] Warren Buffett: buy commodities, sell brands [201:12] If your dog doesn't have problems with its current food, you're never changing to another food. [208:32] Milton Hershey: caramels is a fat but chocolate is a complete food

Original transcript

[0:00] okay David how many current varieties of [0:02] M&M's can you name oh wow okay well [0:06] plain peanut peanut butter uhhuh [0:08] actually plain is technically now called [0:10] milk chocolate oh interesting there's [0:13] dark right yep which I've got right here [0:16] uh they had mint for a while did they [0:18] discontinue mint mint is a holiday only [0:22] theme so that's a seasonal one [0:26] oh what else I mean at the end of the [0:28] day it's kind of only plain and peanut [0:30] that matter right I think in sales [0:32] numbers are there pretzel ones there are [0:35] pretzel ones there are [0:37] also almond oh almond see I yeah I'm [0:41] allergic to almonds so I never think [0:42] about almonds there's also some weird [0:44] ones Carl yeah I don't want that at all [0:48] but they make it crunchy cookie which [0:52] replaced crispy of our youth do you [0:54] remember the blue packaging crispy M&M's [0:56] oh yeah I remember the Krispies yeah and [0:59] then there's some specialty ones dark [1:01] chocolate peanut which I really want [1:03] fudge brownie campfire s'mores and [1:06] caramel cold brew ooo I don't know about [1:08] any of these and then there's these [1:10] really wild limited edition ones in [1:12] addition to Holiday mint birthday cake [1:14] chili nut and pumpkin spice [1:17] latte that sounds disgusting I [1:20] know but yes I think you are right the [1:22] milk chocolate and the peanut are the [1:23] sales drivers yep all right should we do [1:26] it let's do it who got the TRU [1:29] [Music] [1:30] is it you is it you is it you who got [1:33] the truth [1:34] now is it you is it you is it you sit me [1:38] down say it straight another story on [1:42] the way got the truth Welcome to The [1:45] Fall 20124 season finale of acquired the [1:48] podcast about great companies and the [1:50] stories and playbooks behind them I'm [1:52] Ben Gilbert I'm David Rosenthal and we [1:54] are your hosts listeners we were [1:57] thinking what episode would be fun to do [2:00] before the holidays we picked M&M's [2:02] thinking this will be just some nice [2:04] light-hearted fair about the candies and [2:07] the characters on commercials that [2:08] remind us all of our childhood but as we [2:10] dug into Mars Incorporated the parent [2:13] company we realized that the story is [2:15] totally thrilling it's got World War I [2:18] World War II new technologies and [2:20] inventions and serious serious family [2:23] drama and their corporate strategy over [2:25] the years is just as clever as companies [2:27] like lvmh Walmart and Costco I mean you [2:30] don't get to be the second wealthiest [2:32] family in America without it yeah [2:35] seriously maybe it's because we just did [2:37] it but I feel like there are a lot of [2:39] Echoes of Ikea in this one too [2:41] absolutely and the Mars family is way [2:44] more quiet and reclusive than the [2:47] comprod family too they're way more [2:49] quiet and reclusive than anybody yeah [2:53] Mars also owns way more than you think [2:56] you may know that they own the world's [2:57] most popular candy Snickers in addition [2:59] to M&M's or perhaps you know they're in [3:01] the Pet Food business but they also own [3:04] everything from Ben's original rice to [3:06] now kind bars and they have one massive [3:08] deal in the works that we will talk [3:10] about later on this episode David here's [3:12] one crazy stat to illustrate their sheer [3:14] size do you know Mars now does more [3:17] Revenue than the Coca-Cola Company I [3:20] know wild Mars cross $50 billion in [3:23] sales last year and they're still [3:25] completely privately owned by the Mars [3:27] family making it one of the top five [3:30] largest private companies in America [3:32] this really is an incredible American [3:35] and Global story well listeners after [3:37] this episode come listen to AC Q2 we [3:40] just had one of my favorite [3:42] conversations ever on the show in part [3:45] because I just love talking computer [3:46] architecture with Renee H who is the CEO [3:49] of arm Holdings the chip design company [3:52] that makes the designs and the [3:54] instruction set architecture of [3:56] everything inside your smartphone your [3:58] car your laptop and now even massively [4:01] in the data centers gosh between [4:03] synopsis and now arm we're going to have [4:04] to rename aq2 into like acquired [4:07] semiconductors totally it was a great [4:09] computer science lesson and history [4:11] lesson sort of all rolled into one so go [4:13] subscribe to the aq2 feed in the podcast [4:15] player of your choice to check it out [4:17] we've got a survey winner thank you to [4:19] everyone who took our survey it is ctie [4:21] from Boston we will email you with [4:24] details on how to claim your free Rayban [4:26] metas and 10 other folks in addition to [4:28] cty will also o receive free acq dad [4:31] hats so keep an eye out in your email if [4:33] that is you now before we dive in we [4:35] want to briefly thank our presenting [4:37] sponsor JP Morgan payments for an [4:39] incredible Year yes just like how we say [4:42] every company has a story every [4:44] company's story is powered by payments [4:46] and JP Morgan payments is a part of so [4:48] many of their Journeys from seed to IPO [4:50] and Beyond yep so with that this show is [4:53] not investment advice DAV and I may have [4:55] investments in the companies we discuss [4:57] although not Mars obviously and the show [4:59] is for informational and entertainment [5:01] purposes only David where do we start [5:04] our story o well we start in September [5:09] 1883 there's some debate about whether [5:11] it's in Pennsylvania or Minnesota but [5:15] you know there's a lot of um Legend [5:18] shall we say about the Mars family which [5:20] we will get into as we go here but [5:22] before really we start have to say a [5:25] thank you to Joel Glenn brener who wrote [5:27] The Amazing book Emperors of chocolate [5:30] Mars as we'll talk about is an [5:33] incredibly private company and private [5:35] family she's the only journalist that [5:38] ever got real access to the company like [5:40] ever and it was in [5:42] 1991 almost a century after founding [5:45] that she actually got access for a [5:47] Washington Post article and then that [5:49] turned into the book is that right yep [5:51] she was a young reporter at the post and [5:53] uh called the company like every day for [5:56] a year and finally got access and that [5:59] became a piece in the Washington Post [6:01] Magazine and then she turned it into the [6:03] book Emperors of chocolate yep okay so [6:06] back to 1883 and uh let's just call it [6:09] Minnesota when Frank Clarence Mars is [6:13] born now Frank's father is a flower [6:18] Grist Mill operator and his mother Elva [6:21] is a housewife both of those trades are [6:24] going to become very important here so [6:27] Frank sadly when he's very young and and [6:29] what I think was also very sadly common [6:32] place at the time he contracts polio and [6:34] he has a mild case luckily he survives [6:38] but it does affect his legs and he has [6:40] to wear Orthopedic braces all growing up [6:43] which means that Frank can't play [6:46] outside he can't play sports he has to [6:48] stay home after school with his mother [6:50] in the home and so what does he do after [6:53] school with his mother well his dad [6:55] would bring home extra bags of flour and [6:58] somebody had to put that to use so Elva [7:00] and Frank do lots and lots of baking [7:03] they're baking bread they're baking pies [7:05] they're baking cakes and most enjoyably [7:09] for Frank they are baking candy and what [7:11] was candy at this point in time well I'm [7:14] glad you asked it's not chocolate [7:17] chocolate is basically not a thing in [7:20] America yet candy though was big and [7:24] specifically we're talking about Penny [7:26] Candy gumdrops licorice all all sorts of [7:30] sugar based sweets and they were [7:32] typically unbranded like there were no [7:35] big National or really even like local [7:38] brands of candy at this point in time [7:40] and they're sold wholesale by small [7:44] Regional Bakers to local retailers and [7:47] drugstores who stock them for kids like [7:49] the main Market here is selling sweets [7:51] to kids and that's what Frank is doing [7:54] you can think about the candy industry [7:55] at this point in time sort of like the [7:57] baked goods industry today you've got [7:59] some local Baker that's making them [8:02] Distributing to a bunch of coffee shops [8:04] and like you don't really know except in [8:06] really bougie ones who the baker of that [8:08] particular scone is it's just oh I go to [8:10] that coffee shop and they have scones [8:12] there exactly so this is what Frank and [8:15] his mom are making in their kitchen now [8:18] fast forward to high school and Frank [8:20] has kind of become the local candy Chef [8:22] extraordinaire he's mastered all of his [8:24] mom's recipes he's experimented with [8:26] some of his own people are liking them [8:29] and so after high school he does the [8:30] natural thing he becomes one of these [8:33] candy entrepreneurs when he's 19 years [8:35] old in 1902 he establishes his own candy [8:38] company there in Minneapolis and goes [8:41] into business selling his creations and [8:43] other people's Creations wholesale to [8:45] these local retailers Merchants [8:47] drugstores etc for kids to buy in that [8:50] same year in 1902 he would also briefly [8:54] marry a woman named Ethel kissak now [8:57] remember this Ethel she will come up [8:59] much much much later at the end of the [9:00] story but for the moment the two of them [9:03] have a son named forest forest Mars our [9:08] real protagonist this story yes but put [9:12] a pin in Forest we will come back to him [9:14] in a few minutes so his dad Frank starts [9:18] this candy business you'd think you're [9:19] like Yep this is it this is the company [9:21] you know Mars Snickers M&M's Milky Way [9:24] it's all to come here out of this one [9:27] company named Mars yes [9:32] not [9:33] yet so we mentioned a minute ago that [9:36] chocolate was not a thing yet in America [9:40] now at this point in time in 1902 that [9:41] is not technically true Milton Hershey [9:44] has started selling his Hershey's [9:47] chocolate bars in Pennsylvania which he [9:48] started in 1900 the notorious 5cent just [9:53] chocolate I don't even think they had [9:54] made Hershey's with almonds yet it was [9:56] just the like single 5cent slab of [9:59] chocol bar called the Hershey bar yep [10:01] there weren't even any kisses yet [10:03] nothing it was just the very Beginnings [10:05] Hershey had not yet figured out how to [10:07] scale production so it was Regional and [10:10] it wasn't popular around the country and [10:12] certainly not in Minneapolis Hershey had [10:15] just figured out by the skin of his [10:16] pants production and the recipe at all [10:19] he almost built an entire Factory to [10:21] produce milk chocolate without knowing [10:23] how to produce milk chocolate that was [10:24] like a lucky diving save at the last [10:26] minute right before they needed to turn [10:27] everything on totally so what Frank's [10:30] selling this Penny Candy stuff it's fine [10:33] and like I said the target market is [10:35] kids which is a good Market but you know [10:38] kids turn into adults and then they stop [10:40] eating Penny Candy and so the market is [10:42] not that big there's also another [10:44] problem with the Penny Candy business a [10:47] bigger one which is in those days it was [10:51] all pretty highly perishable and there's [10:54] not air conditioning yet exactly exactly [10:57] and so most candy producers end up [10:59] having really really horrible inventory [11:03] problems and a lot of them end up going [11:05] out of business which after a couple [11:06] years is exactly what happens to Frank [11:09] so in 1910 Frank's now bankrupt his wife [11:12] Ethel divorces him and takes their [11:15] six-year-old son forest and sends Forest [11:18] off to live with her parents in a remote [11:21] mining town in Saskatchewan Canada and [11:24] Ethel stays in Minneapolis and takes a [11:27] job as a department store clerk and just [11:29] hits reset on her life it's wild do you [11:32] know why what I think because nobody had [11:34] any money to support him right and in [11:36] particular Frank actually owed her $20 a [11:39] month for child support for Forest when [11:41] he was six years old but was failing to [11:43] make payments and so she just couldn't [11:45] support him and needed to send him to [11:47] the grandparents I mean got to remember [11:50] like we're in the early 1900s here this [11:52] kind of stuff happened all the time yep [11:56] so Frank undeterred by bankruptcy [11:58] divorce [11:59] being a deadbeat parent not paying child [12:01] support he marries another woman also [12:05] named Ethel unbelievable specifically [12:08] they move to Seattle heyo where Frank [12:11] does what else he sets up another candy [12:14] business and starts Hawking his candy [12:15] again this Seattle candy Venture goes [12:18] about as well as the Minneapolis one [12:20] within one year Frank is bankrupt again [12:22] the creditors are coming after him so he [12:24] skips town again this time just down the [12:28] road to Tacoma [12:29] so this is two failed candy companies [12:31] under his belt yep we're now on number [12:33] three he sets up another candy business [12:36] in Tacoma in 1914 out of his house yes [12:39] he's running the business out of his [12:40] kitchen that's right and that business [12:43] also fails after a couple years so three [12:47] down three strikes we're now in 1920 and [12:50] Frank and Ethel number two return once [12:54] again to Minneapolis figuring that 10 [12:56] years have gone by they can now show [12:58] their face around town again so Frank [13:01] sets up yet again another candy company [13:05] candy company number uh four now in [13:07] total if you're keeping track at home [13:09] and Against All Odds this candy company [13:13] would go on to become the globally [13:15] famous $50 billion annual revenue [13:19] private family business Mars [13:21] Incorporated s of it's not totally Frank [13:26] that is the reason for its success yes [13:29] okay so what's different now about this [13:32] fourth candy company that Frank starts [13:35] it's chocolate and chocolate is a [13:37] completely different Universe than these [13:40] Penny candies then caramels the first [13:43] thing you have to know is it uses Coco I [13:46] mean this is a very at this point in [13:49] history scarce and not very common in [13:52] America like very few people are [13:53] importing it from South America where it [13:55] originated it's a totally different and [13:58] difficult thing to try and process and [14:00] at this point in history only Europeans [14:03] really are doing it except for one [14:05] American entrepreneur Milton Hershey y [14:09] so we got to rewind a little bit and [14:10] tell the Hershey Story because a it's [14:13] also crazy and B it is deeply deeply [14:17] intertwined with the Mars story so [14:20] Milton Hershey had been also a actually [14:24] successful candy entrepreneur he had his [14:27] own shares of failures but he started [14:29] eventually a caramel company that became [14:32] quite big regionally in the Philadelphia [14:33] area y he sold it for a million dollars [14:36] in 1900 which is 36 37 million today [14:39] with inflation yep he is among the most [14:42] successful of this kind of generation of [14:44] pre- chocolate candy [14:47] entrepreneurs before he sold the [14:48] business though in [14:51] 1893 Hershey traveled to Chicago where [14:54] at the Colombian Exposition which I [14:57] didn't know this was the precursor to [14:58] the world Fair he tries chocolate for [15:03] the first time and he's smitten in the [15:05] German Pavilion there there's a German [15:08] company that is displaying chocolate and [15:11] chocolate making equipment and Hershey [15:13] is so taken by the rich complexity [15:17] deliciousness of chocolate that he buys [15:21] from this German company all of the [15:23] equipment on display there just like on [15:25] the spot and says I want this shipped [15:27] back to my production facility in [15:29] Lancaster Pennsylvania out in the [15:31] Philadelphia Countryside and I am going [15:33] to set up a chocolate making operation [15:36] now this is not milk chocolate this is [15:39] just plain chocolate and it's worth [15:41] noting too this concept of solid [15:45] chocolate is a pretty new thing like a [15:47] chocolate bar up until I don't know 15 [15:51] 20 years before this basically all [15:53] chocolate was drinking chocolate and so [15:55] this notion of a machine that makes [15:58] chocolate as bars at the Columbia [16:01] Exposition is quite novel yeah I mean [16:04] chocolate is a very rich very complex [16:08] food very difficult to make and the [16:10] history goes all the way back to monuma [16:13] in the Aztecs and even before the Aztec [16:15] about 5300 years ago around Ecuador wow [16:20] I didn't even know that so we're talking [16:22] about a 5,000 year old tradition here [16:25] yes but like you said until call it the [16:27] late 1800s this is a drinking activity [16:31] yes and it's so different than the [16:33] chocolate we think of today there's no [16:35] milk chocolate it's not sort of that [16:38] nice breakable chocolate with a shine [16:40] it's a very different and only barely [16:44] enjoyable flavor it's better than [16:46] everything else but it's not a bar of [16:48] chocolate like you know today yep so you [16:50] said milk chocolate and I said Hershey [16:51] at this point is not making milk [16:53] chocolate when he first introduces it to [16:55] his caramel company as he gets deeper [17:00] and deeper into the Chocolate World he [17:03] travels to Europe and learns about milk [17:06] chocolate which had just been invented [17:08] not too long before in Switzerland by [17:11] the Swiss company Nestle sort of nestle [17:15] we're going to talk about how to make [17:18] chocolate and then we're going to use [17:20] that as a basis of understanding for how [17:22] to make milk chocolate and how the [17:24] discovery of milk chocolate came about [17:26] so first of all how do you make [17:28] chocolate and we have a huge thank you [17:30] to Todd masonis at dandelion chocolate [17:32] which is an excellent excellent Bean [17:34] dear Chocolate Company in San Francisco [17:37] for walking us through this entire thing [17:39] not only giving us all the notes of how [17:41] to describe it on air but also taking us [17:42] through their Factory in San Francisco [17:44] which is unbelievably cool if anyone has [17:46] a chance to do it so where does [17:48] chocolate come from there's a cocoa [17:50] fruit that grows on a tree originally in [17:53] South America now very commonly in [17:55] Africa where they've been transplanted [17:57] it's kind of a football looking thing [17:59] you pick it you cut open the pod and [18:01] inside there are the seeds of the fruit [18:03] David you and I sort of ate some of it [18:05] or sucked on some of it it's sweet but [18:06] it's not chocolate it has no reflection [18:09] of a chocolate flavor that all comes [18:11] from the seeds or the beans yep yeah the [18:13] fruit itself is actually quite delicious [18:16] but it's like a pulpy sort of Milky type [18:18] thing yes so that fruit is actually the [18:21] thing that people ate for thousands of [18:23] years but the seed ends up being the [18:24] thing that becomes chocolate you first [18:27] ferment those beans in wooden boxes the [18:30] yeast eats the sugar that creates [18:32] alcohol then the acid eats the alcohol [18:35] there's fermentation that kills the bean [18:36] so after this fermentation you then dry [18:38] it all this kind of happens at the site [18:41] of production or of growth typically in [18:44] South America or in Africa so then after [18:47] the fermentation you dry it out so this [18:50] could happen sort of in drying beds or [18:53] in mechanical smoke dryers or on banana [18:56] leaves all the different ways that you [18:57] dry it can affect the flavor how [18:59] aggressively you dry it contributes to [19:01] how much acid is in the beans so there's [19:03] a lot of fluctuation here in the flavor [19:06] just based on the way that you are [19:08] harvesting the bean itself the beans [19:11] then go into sacks they go on boats they [19:14] go at this point in history basically to [19:17] Europe because that was the only place [19:18] that was making chocolate they then get [19:21] sorted sterilized [19:28] did you remove the shell which is a [19:30] process called winnowing so now you have [19:33] nibs so just like the core like meat of [19:36] The Bean after it's been roasted yes you [19:39] can press those nibs into create two [19:41] separate things cocoa powder and cocoa [19:44] butter both of those come from the nib [19:46] but there are many reasons why different [19:48] chocolateers will first separate them [19:49] out and recombine them in different [19:50] ratios later you grind the nibs down to [19:53] the right particle size it then goes [19:55] through something called cing coning is [19:58] awesome it's basically like these big [20:00] cylinders right that like spin around [20:02] and around and smooth out all these [20:04] particles yeah and there's a great story [20:07] back in [20:08] 1879 that Rudolph lint which is another [20:11] name you may recognize the Swiss Cher [20:14] discovered it by accidentally leaving [20:16] his cocoa in a roller grinder over the [20:18] weekend instead of shutting the machine [20:20] off so it accidentally pressed the beans [20:22] for a three full days which created this [20:25] silky smooth flowing texture and then [20:28] you could do cool Stu like add more [20:29] cocoa butter in to get that Swiss [20:32] chocolate texture that we all know of [20:34] today if you've had it and you're like [20:35] how is this so unbelievably creamy you [20:37] know you separate the nibs into cocoa [20:40] powder cocoa butter and then you add a [20:41] bunch more cocoa butter back in and it's [20:43] that delicious Swiss chocolate so 1879 [20:47] is when conching is sort of first [20:49] discovered now there's David to your [20:50] point specific conching machines that [20:53] will do this as a part of the chocolate [20:55] production process still not done yet [20:57] you now have this great conched [21:00] liquidous wonderful chocolate sitting [21:02] there if you just let it dry it's [21:05] actually not shelf stable it will Bloom [21:08] for any of you who ever left a chocolate [21:10] bar in a hot car and it sort of melted [21:12] and then resolidified it gets that sort [21:14] of white gross stuff on top and it [21:16] doesn't have that shine to it it doesn't [21:18] snap nicely the way that you're used to [21:20] a chocolate bar snapping there's [21:22] actually some pretty complicated [21:23] chemistry that happens where you are [21:25] taking this conched chocolate you are [21:29] tempering it and what tempering it does [21:31] is you are aligning the crystals in the [21:34] cocoa butter to make it so that it forms [21:37] into that shiny breakable chocolate that [21:40] you know of today and this is an [21:41] incredible process right you take this [21:44] liquid chocolate after conching you heat [21:46] it up to like kind of super liquefy it [21:49] and then you cool it down to like just [21:52] the right amount of temperature where [21:53] the right sort of seed crystals form [21:56] that's exactly right right and then you [21:57] heat it back up again and then you let [21:59] it cool and if you don't do that second [22:00] step all the bloom will happen but you [22:02] want to get like just the right seed [22:04] crystals to set the right crystal in [22:06] structure for how it'll come together [22:09] that's exactly right when you're [22:10] superheating it you're eliminating all [22:12] crystals so then you can kind of start [22:13] from scratch with this seed Crystal and [22:15] then you're trying to let the rest of [22:17] the chocolate form around that seed [22:20] Crystal so they're all lined in that [22:22] nice shiny break believe me I [22:24] appreciated chocolate before doing this [22:26] episode but now like knowing how it's [22:28] made and we haven't even gotten a milk [22:29] chocolate yet which is even more complex [22:32] this is more complex than Wine this is [22:34] more complex than coffee o shots fired [22:37] on wh and coffee you're going to hear [22:38] something well at least in terms of like [22:39] stages of production right like let's [22:41] take coffee coffee looks pretty similar [22:44] until you know you get the beans there [22:45] roasted but then you grind the beans and [22:47] you just put the beans in liquid you're [22:48] not getting any of these steps here [22:50] chocolate is remarkably hard to make I [22:52] think that is a huge takeaway the fact [22:55] that I'm looking down here at all these [22:56] bags of M&M's and the Snickers bar we [22:58] sort of just assume oh this is a [23:00] industrial thing that just sort of comes [23:02] off the line it's an Agricultural [23:04] Product that then has to go through a [23:07] variety of different processes developed [23:09] on different continents many decades [23:12] apart in order to create something very [23:15] uniform and predictable and desirable [23:18] out of that pure Agricultural Product y [23:22] okay so that's all the way from the [23:24] fruit through the fermentation through [23:26] the processing of the beans through the [23:29] conching through the tempering and in [23:31] those last steps of the process in the [23:33] conching and the tempering you're also [23:35] adding sugar in right so like unless you [23:37] want to make 100% dark chocolate which [23:39] is like very complex but very bitter no [23:42] one's going to eat that most people max [23:44] out at 85% chocolate and the rest the [23:47] 15% is sugar or you're getting a 70% bar [23:50] and the 30% is sugar or if you're [23:52] getting a milk chocolate bar it's more [23:54] in that 30 to 50% cocoa and the rest is [23:57] sugar and milk but in reality most of [23:59] the time you're eating chocolate these [24:01] days unless it's a bean to Bar producer [24:03] like a dandelion or something you're [24:04] ending up with all sorts of stuff added [24:07] in that process you know more cocoa [24:09] butter sugar soy lesin often times [24:12] you'll get vanilla that's added in part [24:15] of this process to kind of create a [24:16] chocolate taste you know of yep okay so [24:18] we're still in the Dark Chocolate World [24:20] here let's talk about Nestle and milk [24:23] chocolate which is sort of a funny [24:24] misnomer right dark chocolate it's just [24:26] chocolate it's chocolate that doesn't [24:27] have milk we needed to retroit something [24:30] like we needed to come up with a name [24:31] and we're like oh it's dark chocolate [24:33] okay it's chocolate that's chocolate and [24:34] sugar but doesn't have milk okay dark [24:36] chocolate so what is milk chocolate then [24:39] well now we need to flash back 35 years [24:43] before Milton Hershey sells his first [24:46] caramel company this is before he [24:47] started the Hershey Chocolate Company [24:49] 1866 HRI Nestle David to give some [24:53] Credence to your comment is researching [24:56] infant feeding as a mean to solve infant [24:59] mortality he invents a new type of food [25:02] for babies who are unable to breastfeed [25:04] there in Switzerland and remember at [25:06] this point in time something like one in [25:08] five babies died before their first [25:09] birthday so infant mortality is a [25:12] massive massive Global problem now he's [25:15] researching this alternative infant [25:16] feeding methods milk would quickly turn [25:19] rancid so there was this question of how [25:20] do you keep milk fresh he eventually [25:23] solved it it is hard to condense milk [25:25] without burning it but he figured out [25:27] this method of using an air pump at low [25:29] temperatures to concentrate sort of a [25:31] milk powder and then he added a bunch of [25:33] cereal a proprietary cereal mix he [25:35] created and this is effectively the [25:38] first baby formula so in 1867 he [25:41] demonstrated that a baby could drink [25:43] this formula that he made rehydrated and [25:46] it was effectively a miracle to keep [25:47] babies alive totally this is like one of [25:50] many mind-blowing things in the research [25:52] that I learned Nestle was a baby formula [25:55] company that's how it started totally [25:57] it's great in the same way that heres [26:00] the uh birken bag was a bag for baby [26:02] bottles yeah [26:04] right who knew that baby formula [26:07] literally leads to the modern chocolate [26:08] industry yep so incredibly one of his [26:12] neighbors who desperately needed this [26:14] formula because his baby was rejecting [26:16] breast milk happened to be a choler guy [26:19] by the name of Daniel Peter so he had [26:21] this idea for milk chocolate in [26:24] 1867 by combining the dehydrated baby [26:27] formula [26:28] with cocoa and sugar to create a creamy [26:31] drink we're still in the drink era and [26:33] people at that time were already pouring [26:35] milk in with their drinking chocolate [26:37] but he sort of said well can I create [26:39] this as a pre-made product yep and again [26:42] to the issues with creating baby formula [26:45] and then now here the issues with [26:47] creating milk chocolate milk is not a [26:49] stable product milk goes bad fast so how [26:53] are you gonna put this in a product milk [26:55] chocolate is something that sits on a [26:57] shelf for six months and you can eat it [26:59] and it's not spoiled it's kind of unique [27:01] in that way totally so the issue that he [27:04] kept running into this is Daniel Peter [27:06] was that the mixture was grainy the [27:08] water in the milk didn't blend well with [27:10] the Coco's Bean oils it was a mess and [27:12] when he tried to dry the milk on his own [27:14] it was really easy David to your point [27:16] that it was spoiling and the chocolate [27:17] would sort of be rancid by the end when [27:19] he finished it eventually Daniel Peter [27:21] walked away from HRI Nestle's powdered [27:24] milk entirely and instead he tried [27:26] condensed milk which is more like a [27:28] concentrated syrup not actually dried [27:30] powder and when he tried this plus then [27:33] a final step of spreading the milk [27:35] chocolate mixture on these big trays to [27:37] slowly dry them and slowly add a little [27:40] bit more heat to turn it into these milk [27:42] chocolate flakes that is the thing that [27:44] worked that he finally was able to [27:46] create this marketable milk chocolate [27:49] flaky stuff that would turn into a drink [27:51] and then later especially over at [27:53] Cadbury and you know other European [27:55] chocolate companies would turn into milk [27:57] chocolate bars that Milton Hershey would [28:01] try to ulate ah interesting I didn't [28:03] actually know that it was condensed milk [28:05] not the formula milk that ended up [28:07] working for Nestle that's my [28:09] understanding I got this from um there's [28:11] a descendant of the Cadbury family [28:13] Deborah Cadbury who wrote this book [28:15] called chocolate Wars and two chapters [28:17] out of 20 or something are about Mars [28:19] but it was this great primer on the [28:20] history of the chocolate industry to [28:22] learn all this um interesting yeah so [28:24] you're deeper on this part than me so [28:26] you might be asking yourself why was [28:28] everybody going through all this trouble [28:29] to combine milk and chocolate it's the [28:32] perfect combination chocolate is so [28:36] wonderful and complex and delicious on [28:37] its own but it's heavily bitter and when [28:41] you temper it not tempering in the [28:43] chocolate process but sort of temper [28:45] that flavor with the smoothness and the [28:47] creaminess of milk anybody who likes [28:49] chocolate knows it's just absolutely [28:51] delicious yeah so by 1879 once you have [28:54] milk chocolate in solid form and then [28:56] you have conching you now go from bars [29:00] that are sort of really gritty and hard [29:01] to bite to this kind of amazing mouth [29:04] feel that just massively increased the [29:07] market 10x it's hard to get a number on [29:08] it but the market for what chocolate [29:11] would be from 1879 onward is way bigger [29:14] than before yep totally so back to [29:17] Hershey he of course learns about all of [29:20] this as he's building his new Chocolate [29:23] Company there in Pennsylvania and he [29:25] decides that he's going to make milk [29:27] chocolate too except he's not a chemist [29:30] he doesn't employ any chemists he [29:32] basically has no idea what he's doing [29:36] and for years he just experiments via [29:39] trial and error to try and find a way to [29:43] produce milk chocolate he builds a huge [29:46] new Factory in what would become Hershey [29:48] Pennsylvania like the town of Hershey [29:50] Pennsylvania he's basically betting it [29:52] all of I am going to figure this out and [29:54] I am going to bring chocolate and milk [29:57] chocolate to America at scale finally [30:00] after a couple years he does hit on a [30:04] method that works for producing milk [30:08] chocolate however you know it's not [30:11] quite as scientific as uh what you were [30:14] just describing Ben and in the process [30:18] effectively the milk does spoil a little [30:21] bit which is [30:23] why I'm sure all of our you know [30:26] European and other inter non- American [30:28] friends who are listening to us here and [30:31] are saying like Hershey's that is so [30:33] disgusting I have no idea how all you [30:37] Americans eat Hershey's chocolate and [30:40] why it tastes sour if you're not used to [30:42] it this is why it is sour yeah so there [30:46] are two versions of the story and we [30:48] don't know which one is true but either [30:51] way David it leads to this thing that [30:52] you're talking about which is there's [30:53] kind of a little bit of a funk or a [30:55] little bit of a sourness in Hershey's [30:57] chocolate and that is just what [30:59] Americans are used to so to Americans [31:02] that's chocolate Okay account number one [31:05] and this is all in the Cadbury book that [31:07] I just mentioned after a series of [31:09] laborious failures schabach who was a [31:12] scientist working with Hershey seized on [31:14] the initiative and tried a slow [31:16] evaporation of non-fat milk over low [31:19] heat he succeeded in reducing the water [31:20] content of the milk and added the sugar [31:22] to create a sweet creamy concoction with [31:25] no hint of a burned flavor better yet [31:27] they found that that the mixture could [31:28] be blended with the ingredients of the [31:30] cocoa bean without spoiling to produce a [31:32] smooth milk chocolate Hershey was [31:34] thrilled slightly sour but distinctly [31:37] original the perfect American chocolate [31:39] bar now there's a second view which is [31:43] that Hershey happened to acquire a large [31:45] batch of milk powder from Europe which [31:47] had slightly soured by the time it [31:49] crossed the Atlantic reluctant to waste [31:51] such a large amount he used it to make [31:53] chocolate and found that it sold Well [31:55] Company officials have always denied [31:57] that soured milk powder played any part [32:00] in the company's formula amazing amazing [32:02] thank you Deborah Cadbury for all that [32:04] if written by a member of the Cadbury [32:05] family you can imagine uh uh why that [32:08] story is preferred regardless here's the [32:12] amazing thing though that this [32:14] illustrates when it comes to candy and [32:17] specifically when it comes to Chocolate [32:20] the most important thing in the business [32:23] is being first to Market and setting the [32:26] taste of a specific [32:28] area because again Europeans think that [32:31] her's chocolate is disgusting and [32:33] Americans are like this is chocolate [32:35] when you're a kid and you eat this stuff [32:36] for the first time your taste gets [32:39] associated with oh this is what this is [32:43] there's also a Nostalgia element to this [32:45] too because the tastes are so strong so [32:48] powerful so complex you bite into a [32:50] Hershey's bar and like subconsciously or [32:53] not your brain is going right back to [32:55] Childhood when you first ate that yep [32:57] and actually today 75% of candy is eaten [33:00] by adults and in fact it accounts for [33:02] 90% of total purchases a complete [33:04] departure from The pre- Chocolate World [33:06] you were talking about with the penny [33:08] candies at the checkout counter yep [33:11] totally so Hershey he was crazy in [33:14] believing in the potential for all this [33:17] but because he invested so much money he [33:19] set up the only scale chocolate [33:22] production facility period in America he [33:26] was able to [33:28] set this taste for the country which [33:30] basically locked him in as what [33:33] chocolate was in America fascinating and [33:36] he's smart about this too from a [33:38] business perspective like Ben you [33:39] mentioned the nickel Hershey bar he [33:42] intentionally setss the price at a [33:45] nickel he totally could have charged a [33:48] lot more this is like this great [33:49] delicious luxurious item he wants it to [33:52] be ubiquitous so he prices the bars at a [33:55] nickel and he pushes distribution [33:58] everywhere five and dime stores grocery [34:00] stores gas stations news stands Standard [34:03] Oil stations he's pushing everywhere I [34:06] mean he basically invents the modern [34:08] candy industry by doing this yes and [34:11] Hershey's kind of uniquely positioned to [34:14] do it imagine you're walking around [34:16] today with 40 million bucks from the [34:18] sale of your previous company you [34:20] realize there's something going on in [34:21] Europe you know it's going to work in [34:23] America you can't get your hands on the [34:25] formula but you're going to try and [34:26] reverse engineer it your competitors [34:28] can't self fund to the degree that you [34:31] can and so he decides I'm rich I'm going [34:34] to go big immediately and so he builds [34:36] out this huge Factory to start [34:38] production before he's even finalized [34:40] the formula so it's really like a go [34:43] Bigg or go home strategy where if it [34:45] works boom mass production Mass [34:48] distribution I set the flavor profile in [34:50] America and I set the brand in America [34:53] for chocolate and if it fails it fails [34:56] pretty catastrophically yeah [34:58] so putting the final pieces on this [35:01] initial Hershey success story right [35:04] after Milton Hershey figures out milk [35:07] chocolate and starts this production and [35:08] is expanding distribution [35:10] Nationwide World War I happens and the [35:14] American Military as they have seen [35:18] European armies do they Source chocolate [35:22] as ration bars for the troops and [35:26] Hershey's is the big supplier so [35:29] millions and millions of American GIS [35:32] now get introduced and hooked on the [35:34] slightly sour Hershey's chocolate and [35:36] it's great it's a super dense store of [35:38] energy it triggers an emotional response [35:41] in the brain I mean everybody who eats [35:42] sugar today knows that if you're eating [35:46] sugar it is triggering I don't know if [35:47] it's dopamine or serotonin but there's [35:49] definitely a stimulus of a happiness [35:51] release which if you're a soldier in [35:53] World War I you could use a little of [35:55] that yeah it's got caffeine totally so [35:59] these soldiers then come home and right [36:01] after the war is Prohibition in America [36:04] so you can no longer buy alcohol at [36:07] least legally buy alcohol and all these [36:10] adults are now like you need some sort [36:12] of social lubricant here well what's the [36:15] natural alternative it's chocolate which [36:19] brings us to the candy bar so all of [36:23] these former Penny Candy entrepreneurs [36:26] all around the country [36:28] they're like wow you know chocolate is [36:31] amazing you know we can Market to adults [36:33] Etc it's expensive Hershey's selling [36:35] their own bars what if I take just some [36:38] chocolate and some other stuff and also [36:40] make a bar well that I could make a lot [36:43] cheaper cuz the other ingredients [36:45] whether it's nuts or nougat or sugar or [36:47] whatever are cheaper and I can develop [36:50] my own unique taste that people in my [36:52] region might find appealing so by the [36:55] end of the 1920s there are more than [36:59] 40,000 different candy bars being made [37:03] in America oh my God almost all of which [37:06] are these Regional entrepreneurial [37:08] operations the most infamous of these is [37:11] Ben do you know the story of the Baby [37:12] Ruth candy bar no so still available [37:15] today the Baby Ruth candy bar named I [37:18] think for president Grover Cleveland I [37:20] think's daughter Ruth baby daughter Ruth [37:23] to introduce the bar the Curtis candy [37:26] company which made it chartered an [37:28] airplane to fly over the city of [37:30] Pittsburgh and drop bars down with [37:33] little paper parachutes over the city it [37:35] is like a literal drop it puts the Visa [37:38] drop to [37:40] shade wow amazing we're gonna have to do [37:43] that for an acquired marketing stunt at [37:45] some point I know I know Charter and [37:46] airplane and I think we would get in a [37:49] lot of trouble if we did that these days [37:51] I think so too oh man so okay you might [37:55] be scratching your head a little bit and [37:56] being like wait a minute you just told [37:57] me about how like Hershey controls the [37:58] means of production for chocolate and [38:00] nobody in America can make chocolate [38:01] except Hershey well that's right and [38:04] Hershey is freaking loving all of this [38:07] because they are supplying the chocolate [38:09] to all of these entrepreneurs they're [38:11] like the AWS of the chocolate business [38:13] they've become the blue jeans and [38:15] pickaxes company in this Gold Rush yes [38:17] so like if you've ever wondered how the [38:20] heck did Milton Hershey built a town and [38:23] how do you become like Rockefellers or [38:25] carnegies or Vanderbilts like this is [38:26] how this is when you start to see this [38:29] separation of the different players in [38:31] the value chain of chocolate it used to [38:33] just be well I buy beans and then I make [38:37] consumer branded chocolate bars and this [38:39] is the first time there's a sort of [38:41] intermediation Step where you say well [38:42] Hershey makes the chocolate and then [38:44] other people buy the chocolate from [38:46] Hershey for their consumer products and [38:48] yeah Hershey also makes a chocolate bar [38:50] but in America this is really the [38:52] creation of the wholesale business of [38:54] chocolate yep and there's one game in [38:56] town at least when when it comes to milk [38:58] chocolate which is most of the market [38:59] and that's Hershey and the US military [39:01] loves it too because you can put all [39:04] these high energy density ingredients [39:07] inside of the candy bar and then use the [39:09] chocolate effectively to seal it in and [39:11] keep it fresh and so you put a wrapper [39:13] around it you send it off with the [39:14] troops and you know you've got eggs in [39:17] the nougat which has protein you've got [39:19] nuts which is protein and fat I mean all [39:21] of this you're delivering these kind of [39:23] complete meals complete in quotes but [39:26] it's carbohy Yates with sugar and other [39:28] carbohydrates it's fat it's protein it's [39:31] not a ton of protein but they're energy [39:33] bars and it's all because the chocolate [39:34] seals up the ingredients inside totally [39:38] so this now brings us back to Frank Mars [39:42] in Minneapolis and the fourth candy [39:44] company and what is different this time [39:47] which is chocolates so when Frank first [39:50] gets back to miniapolis and starts up [39:52] the fourth company he had seen out in [39:55] Seattle and Tacoma that cream truffles [39:58] were like really really popular so he [40:00] brings the buttercream truffles he [40:02] steals from the companies out there and [40:04] brings the concept back to Minneapolis [40:06] that's quite successful he calls them [40:08] Victorian buttercreams and I believe [40:10] started coating them in chocolate using [40:13] Hershey's [40:14] chocolate which makes sense given [40:15] everything that's going on that becomes [40:18] pretty successful he adds another line [40:20] called Patricia's chocolates named after [40:23] his new daughter Patricia that he has [40:25] had with wife ethyl number two and after [40:28] a couple years the business is doing [40:30] like call it $100,000 is in Revenue so [40:33] like really really well we're not [40:35] talking Hershey levels of [40:37] entrepreneurial ambition here but that's [40:39] not the ambition that Frank has and then [40:42] in [40:43] 1922 he decides that he's going to get [40:46] in on this candy bar craze that is [40:49] sweeping the nation and he introduces [40:51] his first combination bar or candy bar [40:54] called the marrow bar yes [40:58] and do you know the other name for these [41:00] types of candy bars that are sort of [41:02] chocolate wrapped something else [41:04] combination bars right uh the term I [41:06] read was count lines oh no I didn't come [41:10] across that so this is from the Cadbury [41:12] book interestingly all chocolate before [41:14] was measured by weight and once somebody [41:17] kind of rolls their first candy bar off [41:19] the line you know what we now know today [41:21] the Snickers bar the Milky Way all these [41:23] things you couldn't really just measure [41:25] it by weight because it's got a bunch of [41:27] much cheaper ingredients inside treating [41:30] chocolate as one substance that has [41:33] weight no longer maps to the consumer [41:35] product and so these lines where you'd [41:38] manufacture these candy bars were [41:39] measured by count of bars so they're [41:42] called count lines so these [41:43] manufacturers are spinning up count [41:44] lines instead of I don't know weight [41:46] lines or whatever they were before [41:48] amazing it's like uh the KD furniture [41:50] from the IKEA episode so here we are the [41:54] first candy bar countline bar from the [41:58] Mars company [42:00] 1922 comes out and I don't want to say [42:02] it's a flop but it's not a success no [42:05] one's eatting marrow bars today correct [42:08] correct indeed but then the next year in [42:12] the summer of [42:13] 1923 a fateful reunion occurs in Frank's [42:19] life which is that his estranged son [42:24] Forest Mars reappears [42:27] in highly dramatic fashion and the two [42:31] of them team up father and son to [42:35] introduce a new candy bar one that will [42:38] take the nation by storm that would end [42:41] up being called the Milky Way or at [42:44] least that's the legend and we will tell [42:47] that in just a second yes but first this [42:50] is a great time to tell you about our [42:52] presenting partner JP Morgan payments so [42:55] everyone listening knows that started [42:57] working with JP Morgan earlier this year [42:59] and you can probably tell it's going [43:01] very well David and I on this final [43:03] episode of the Year wanted to pause and [43:04] tell you why well first is the team the [43:07] folks that we work with there they are [43:09] absolutely world class and also they [43:12] really get acquired they're huge [43:14] acquired listeners just like you I mean [43:17] just look at the chase Center show they [43:18] took our vision and said what if we did [43:20] all of this times 10 yeah and deeper [43:23] than that our two products and Brands [43:25] just fit together like a glove JP [43:27] payments is the world's largest 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in the US their software [44:19] and payment rails basically underpin our [44:22] entire Global Financial system yep and [44:24] lastly payments is a process that every [44:27] single one of your company's needs if [44:29] you make Revenue you need payments and [44:31] JP Morgan thinks about payments as a [44:33] lever for growth not just vanilla [44:35] operational stuff they've been investing [44:37] heavily with products now for fraud [44:39] prevention foreign exchange working [44:41] capital and more all of course built [44:44] Enterprise grade and with developer [44:46] tools and apis so thank you listeners [44:48] for tuning in all year you can learn [44:50] more at jpmorgan.com [44:52] acquired which itself is a very cool [44:55] custom site they built just for this [44:56] partnership and when you get in touch [44:57] just tell them that Ben and David sent [44:59] you or shoot David ory a message in [45:00] slack and we'll get you connected with [45:02] their team our thanks to JP Morgan [45:04] payments all right David So Forest [45:07] emerges into his father's life and [45:10] somehow we end up with the Milky Way how [45:12] does that happen well let's Tell The [45:13] Legend So summer 1923 young Forest Mars [45:18] is 19 years old and on summer break from [45:21] college more on College in a minute he's [45:24] got a summer job as a traveling salesman [45:27] selling Camel cigarettes times sure [45:30] we're different times sure we're [45:31] different I mean it's debatable how true [45:34] any of this is so we'll roll with it one [45:37] night he's in Chicago in late summer and [45:40] he gets instructions from his boss that [45:43] they really got to blow it out they need [45:45] to hit big time sales numbers here in [45:48] Chicago Forest you got to go Blitz the [45:50] whole city with posters marketing Camel [45:54] cigarettes so Forest goes around and he [45:57] puts Billboards up all over downtown [46:00] Chicago supposedly like every storefront [46:02] window on State Street he's Plastering [46:04] with Camel cigarette posters which [46:07] certainly gets attention it actually [46:09] makes the Chicago Tribune the next [46:11] morning that this happened but also much [46:14] like if we were to do an acquired [46:16] marketing stunt like Baby Ruth and drop [46:18] stuff from an airplane these days we [46:19] might go to jail also illegal yes and it [46:23] lands young forest in jail so from his [46:28] Chicago prison cell forest makes his one [46:30] phone call to the only soul that he [46:33] knows in the area who could possibly [46:36] bail him out his estranged father Frank [46:40] Mars which this whole thing I mean this [46:43] is the legend and this is the Mars [46:45] company's version of the story this is [46:46] the journalist's version of the story [46:48] this has been in other books but like [46:50] the guy hasn't seen his father since he [46:51] was 6 years old and he somehow knows his [46:54] phone number to call him from jail by [46:56] the way his dad lives in [46:58] Minnesota there's the whole state of [47:00] Wisconsin between Minneapolis and [47:03] Chicago but we're giving you a flavor of [47:06] who Forest is here if forest was in [47:09] charge of coming up with the story of [47:12] how this all went this is the story he [47:14] would have come up with so yes exactly [47:17] and as we'll see Forest is in charge of [47:19] everything so Frank shows up at the jail [47:22] father and son are reunited after 13 [47:25] years during which yeah bed like you [47:27] said they've had no contact with each [47:29] other but Forest has his phone number to [47:31] call him Frank bailes out Forest by now [47:34] it's early afternoon of the next day and [47:36] he says all right son let's go out for [47:39] lunch and they go to a lunchette to [47:42] share a meal at which young Forest who [47:45] is selling cigarettes orders a wholesome [47:48] malted milkshake over this lunch reunion [47:51] with his father they get talking they're [47:54] getting reacquainted and Forest learns [47:57] that his dad is now this middling [48:00] successful candy entrepreneur and his [48:03] dad's telling him about this marrow bar [48:06] that he's introduced Faris says well hey [48:08] I got an idea for you what if you take [48:12] this malted milkshake here everybody [48:14] loves a malted milkshake what if you [48:16] take that and put that into a candy bar [48:20] and you know like I'm obviously pretty [48:21] good at you know Street marketing here I [48:23] bet I can go sell that all around the [48:26] country [48:27] so they get to talking jamming father [48:30] and son and uh with that the Milky Way [48:34] bar was born with the marketing of a [48:36] malted milkshake in a candy bar and this [48:39] is the story there's so much in between [48:42] I have an idea that you should put a [48:44] molted milkshake in a bar and actually [48:46] what a Milky Way is it's nougat and [48:49] caramel inside of chocolate it's a [48:52] pretty different ingredient set than a [48:54] malted milkshake there had to be quite a [48:56] bit of of R&D experimentation flavor [48:59] development to figure out how to make [49:01] the inside of your candy bar tastes like [49:03] said malted milkshake but here is the [49:06] exact quote from forest as recorded in [49:09] the family archives that Joel got access [49:11] to as part of her access to the company [49:13] he says quote I'll be damned if a short [49:16] time after our lunch the old man has a [49:18] candy bar and it's a chocolate malted [49:21] drink he put some caramel on top of it [49:23] and some chocolate around it not very [49:25] good chocolate he was buying cheap [49:27] chocolate back then but that damn thing [49:29] sold no [49:31] advertising oh Forest regardless of how [49:35] all this happens Frank Mars does release [49:38] in 1924 the Milky Way bar and it does [49:41] become a big hit that year alone the [49:44] first year that it comes out it does [49:46] $800,000 in sales yes the Maro bar [49:50] company went from 73,000 to 793 th000 in [49:54] one year and that is all the Milky Way [49:56] like [49:57] undeniably huge success and effectively [50:00] what they were doing was they were the [50:01] first ones who said wait a minute if [50:03] we're going to make a countline we [50:05] should do it in a mechanical way and so [50:08] even though all these other people are [50:09] selling these one-offs locally to [50:11] different stores and handmaking them [50:13] they were doing it in factory quantities [50:15] all under the same production process [50:17] and brand yep now it was early [50:19] industrialization but it was still much [50:21] more industrial than the rest of the [50:22] manufacturers at this point totally now [50:25] first question you should be asking here [50:27] is wait Forest is in college now and [50:31] ends up in jail in Chicago like what the [50:33] hell happened here okay so when Forest [50:37] is six years old as we said he gets sent [50:39] off to live in Saskatchewan in Canada In [50:42] Like A Hard Scrabble rural mining [50:45] Community with his grandparents unlike I [50:48] imagine most of the folks around him [50:52] Forest is a total outlier there he's [50:55] super smart super entrepreneurial super [50:57] ambitious and he's a super arrogant [51:01] showoff probably because he's so [51:03] insecure from his deeply traumatic [51:05] childhood Deborah caby has a good line [51:07] in her book Noah's flood wouldn't have [51:09] deterred Forest Mars yes so when Forest [51:14] graduates unlike everybody else there [51:16] who goes off to work in the mines he [51:19] supposedly wins a scholarship to the [51:22] University of California in Berkeley now [51:25] how he wins a scholarship UC Berkeley [51:27] which is you know the Public University [51:29] of California when he's living in Canada [51:33] and he's from Minneapolis is suspect but [51:37] we'll go with it he does show up at [51:38] Berkeley though we know that and he [51:40] enrolls in the school of mining there [51:43] with the idea that he is going to study [51:45] to become a mining engineer and go back [51:47] and run a mine instead of just being a [51:49] laborer in a mind and this all makes [51:51] sense he had an Engineers mind I mean he [51:53] also had a marketing mind but he ended [51:56] up building a company that ran at [51:58] incredible efficiency and thought [52:00] through it as sort of a systems thinker [52:02] yes 100% so while he's at Berkeley in [52:07] his first year there to make money and [52:10] support himself he takes a job in the [52:12] cafeteria and supposedly he finagles a [52:15] deal with the head cook that if Forest [52:18] can go Source meet and other ingredients [52:21] for the meals cheaper than budget from [52:24] local wholesalers that he he and the [52:26] chef would split the savings and just [52:29] pocket the [52:31] difference and of course you might get a [52:34] sense that farest is a good negotiator [52:35] here this works like a charm and [52:38] supposedly he's soon taking home like a [52:40] $100 a week which if you annualize that [52:43] to you know $5,200 a year that's about [52:46] double what the average American was [52:47] earning at that point in time so he's [52:50] making bank which by the way is a trend [52:53] among all these entrepreneurs that we [52:55] study you look at ingvar you look at Sam [52:58] Walton you look at Buffett I mean all [53:00] these guys it feels like it's a part of [53:03] their childhood story that as a teenager [53:05] or college student or something they [53:07] were out earning the average head of [53:10] household totally and you know what it [53:12] is still true these days remember the [53:13] Zuckerberg story of he and Adam D'Angelo [53:16] are coding up synaps and people want to [53:17] buy it for a million dollars yep just [53:19] turns to software instead of candy bars [53:22] yeah anyway this is all during Forest [53:25] freshman year at Berkeley and then the [53:26] summer comes and of course the cafeteria [53:28] closes down so he needs to get a job for [53:31] the summer that's when he joins the [53:33] traveling camel cigar at sales team and [53:35] that probably is when somewhere or [53:38] another maybe it was in Chicago maybe it [53:40] was in Minneapolis he reconnects with [53:42] his dad Frank and discovers that Frank [53:45] had become a wealthy man and I think [53:47] regardless of whether Forest had [53:49] anything to do with the Milky Way idea [53:51] or launch or anything like that meeting [53:53] his dad seeing that there's a business [53:56] in the family starts recalibrating [53:58] Forest Ambitions even higher than just [54:01] being an engineer who can now go run a m [54:03] he's like oh I should run a business I [54:06] should run my family's business I should [54:09] run my dad's business and I imagine [54:11] seeing one of his dad's businesses be [54:14] successful is sort of a different type [54:16] of data point for him he always knew my [54:18] dad starts a company and it fails and [54:21] just seeing it existence proof of a [54:22] successful business has got to be a [54:24] reorientation for him yeah even when the [54:27] candy company before Milky Way was just [54:29] making $100,000 a year I mean $100,000 a [54:32] year I mean I don't know who knows what [54:33] the margins are on that but even if [54:35] they're 10% he's making 4X 5x what the [54:39] average American is this is yeah good [54:41] point eye opening to Forest so his [54:43] literal words about this when he gets [54:45] back to Berkeley are the hell with [54:47] running some mines in the [54:51] Backwoods I'm so glad you have these [54:52] Forest quotes oh my God they're so good [54:55] like supposedly in the Mars family [54:57] archives there's a video of forest of [55:01] like Forest chatting with one of his [55:02] longtime lieutenants from the company [55:04] after he retired but before he died and [55:06] it's like in the family archives and [55:08] Joelle got access to go watch the video [55:10] which is where all these quotes are from [55:12] it's amazing so he does his sophomore [55:15] year at Berkeley but he's got his sight [55:17] set higher now he with his father's help [55:21] and presumably money for Forest junor [55:24] year he transfers to Yale [55:27] and he's going to Y with the goal of I [55:30] want to learn about business he's like [55:32] focused you know it's like the [55:33] Zuckerberg story of going to Harvard [55:36] yeah Forest wanted to go to Yale because [55:37] it was Yale but really he wanted to go [55:39] to Yale to meet all the other people yep [55:42] so it just so happens that his roommate [55:46] his first year when he shows up at Yale [55:48] is the nephew of Pierre S duPont wait [55:52] really yes really that's Pierre S duPont [55:55] his nephew is Forest roommate at Yale [55:59] whoa and Pier S duPont at this point in [56:02] time is not only running Dupont which is [56:04] in and of itself one of the most [56:07] important and biggest companies in [56:08] America Pierre is also running General [56:12] Motors at this point in time because [56:14] Dupont is the largest shareholder in GM [56:18] and that is a crazy story that we will [56:19] save for a future episode of acquired on [56:21] how that came to be oh we got to do [56:23] Dupont it's an incredible incredible [56:25] story [56:27] but back to Mars [56:29] Forest worms his way through his [56:32] roommate into getting to know pier and [56:35] starts just pumping Pierre for lessons [56:37] on how he runs his businesses like how [56:40] does he run Dupont what is this Dupont [56:41] planning system that you have how do you [56:44] run a chemical industrial manufacturing [56:47] process exactly how do you do accounting [56:49] how do you do planning like I want to [56:51] know everything about this business it's [56:53] freaking unbelievable that here's this [56:55] kid from the mines in Canada who in a [56:59] few short years in the [57:01] 1920s has worked his way up through hook [57:04] and crook that he's rubbing shoulders [57:06] with one of the greatest businessmen of [57:09] that era right up there with Rockefeller [57:11] and Carnegie yep amazing so after a [57:16] couple years when Forest graduates from [57:18] Yale he's ready to go put all this [57:19] knowledge to work in his dad's candy [57:22] business so the first thing he suggests [57:25] to his dad Frank is that hey we got to [57:27] get out of Minneapolis we got to move to [57:29] Chicago Chicago is the center of the [57:32] candy industry at this point but also [57:35] it's just a way bigger city and it has [57:38] way better Freight distribution to the [57:41] rest of the country yep if you want to [57:43] go National Chicago is a great place to [57:44] do it yeah and why else David you said [57:47] it's the center of the candy industry [57:48] why else is that true oh well I think [57:52] yeah definitely at this point already [57:54] the Wrigley company is there yep you bet [57:57] yeah if you want to know how good a [57:59] business gum [58:01] is you should just ask [58:04] yourself why did the Cubs play in a [58:07] building called Wrigley Field and why is [58:09] there an entire neighborhood called [58:11] Wrigleyville yes yes exactly it's kind [58:14] of like Hershey in the chocolate [58:16] business anyway we will get to that much [58:17] later in the episode spoiler alert Mars [58:20] now owns Wrigley okay so Frank goes [58:23] along with this idea that they're going [58:24] to move to Chicago [58:26] but in his heart of hearts he's not the [58:29] same man that Forest is like he doesn't [58:32] have anywhere near the same level of [58:34] ambition he likes being wealthy now he [58:37] likes being comfortable he's like I'll [58:39] go along with you to Chicago but really [58:41] I want to focus on enjoying the fruits [58:44] of our labor here so the factory that he [58:47] builds in Chicago on the inside is [58:51] really state-of-the-art per forest's [58:54] designs on the outside he spends [58:59] $500,000 in you know whatever this is [59:01] 1928 29 buying a tra of land next to a [59:06] golf course to put a factory in the [59:08] outside of the factory is like this [59:10] beautiful Spanish style building with [59:13] stucco and kopas and like RW iron [59:15] ornamentation it looks like a Hollywood [59:17] studio building dude you're building a [59:19] factory yeah must have been great [59:21] margins on those Milky Ways yeah exactly [59:24] shows you the difference of where [59:25] Frank's head is out and where Forest [59:27] head is at and probably its differences [59:30] over this Factory I would assume start [59:33] to chafe the relationship here a little [59:34] bit cha the relationship yeah he [59:37] contracts the Austin company which had [59:39] built and designed all the Ford [59:41] automobile plants and assembly lines to [59:45] build the lines in the Mars Factory so [59:49] Forest is pushing the workforce super [59:50] hard he's like we have this Factory we [59:52] have these state-of-the-art lines we [59:54] need to run these lines 24 47 with [59:56] multiple shifts like everybody else is [59:58] just you know oh we run our lines during [60:00] the day like hell no we spend all this [60:02] money investing in this Factory we need [60:04] to crank out as many Milky Ways as [60:06] possible scale economies baby totally so [60:09] by 1929 which I think is the first year [60:12] that the factory is up and running [60:13] they're producing 20 million Milky Way [60:16] bars annually and Forest is just like go [60:19] go go go go 20 million of anything at [60:22] this point in history is massive yes now [60:26] one thing that they are not makinging in [60:28] the factory of course is chocolate [60:31] they're buying all the chocolate [60:32] wholesale from Hershey which probably is [60:34] another reason for the move to Chicago [60:36] of like hey we need to be on a main [60:38] train line not only to get the product [60:39] out we need to be there to get the [60:41] ingredients including chocolate in yep [60:45] so very quickly Mars becomes Hershey's [60:50] biggest customer they are buying [60:52] millions of dollars of chocolate every [60:55] year from Hershey which my understanding [60:57] at this point in history is still that [60:59] Hershey's like great we love being a [61:01] industrial wholesaler supplier to other [61:03] candy companies this is only good for us [61:06] yes I mean I think the right way to [61:07] think about Hershey at this point in [61:09] time is like Amazon they are both [61:12] amazon.com and they are [61:14] AWS yeah they're very happy either way [61:18] as long as chocolate is being sold in [61:20] America they're taking their tax yep so [61:23] once this gets going and money really [61:24] starts flowing into the company [61:26] Frank wants to spend it so he builds a [61:29] 20,000 ft vacation home on a lake in [61:33] Wisconsin he buys a $2 million horse [61:36] ranch in Tennessee that he names the [61:38] Milky Way Ranch he buys his own airplane [61:40] so that he can be flown around to all of [61:42] these places Forest hates all of this [61:46] he's trying to reinvest as much into the [61:48] business as possible exactly he wants to [61:50] be Dupont he doesn't care about a horse [61:51] ranch or airplanes but even he I think [61:55] probably [61:56] would have to admit that he's thankful [61:58] that Frank does these things because in [62:01] 1930 the next year Frank creates a new [62:04] chocolate bar that he wants to introduce [62:06] to the market and he decides that he [62:08] wants to name it after his favorite [62:11] beloved horse at his Tennessee Ranch Ben [62:13] you are opening it right now he is the [62:16] most popular chocolate bar in America [62:19] and I think in the world yep yes the [62:22] Snickers bar named after the horse in [62:25] ten [62:26] thank God they bought the horse ranch [62:28] I've been waiting for you to get to this [62:29] part cuz I'm just trying to be satisfied [62:32] you know I just needed to grab a [62:35] Snickers oh amazing it really is so good [62:39] it's so good I massively prefer the bean [62:43] de Bar style chocolate the dendelion you [62:45] know I like dark chocolate more than [62:47] milk chocolate I might not even be able [62:49] to finish a whole Snickers bar just [62:51] because it's so sugary but oh my God is [62:53] that first bite good I mean we're [62:55] talking about two totally different [62:57] products here of like high-end chocolate [62:59] versus Mass Market chocolate but like [63:00] Snickers are so good I feel like I go [63:02] play in the NFL after a bite of [63:04] this totally well so there's another [63:08] potential story of the origins of [63:09] Snickers that we heard some wind of [63:12] rumors in the sort of forest Legend [63:15] Cannon here [63:17] supposedly forest was thinking about [63:21] what would be like you know an [63:23] incredible product to build on the Milky [63:26] Way success and Mark it to all of [63:28] America and the world cuz by the way a [63:30] Snickers is a Milky Way with peanuts [63:33] exactly and so supposedly he went to the [63:37] library he wanted to know what did the [63:41] Roman army feed their legionnaires when [63:43] they were you know out marching and uh [63:46] apparently he learned that it was [63:48] peanuts and eggs and sugar it's a lot of [63:52] energy super dense so the other story is [63:55] that that was the inspiration for [63:57] Snickers was putting what the Roman army [64:00] fed their legionaires into a candy bar [64:03] in practice it's actually a great energy [64:04] bar I was being tongue and Chek at the [64:06] NFL because they're a partner of the NFL [64:08] today but there's a whole industry [64:10] around Cliff Bars and things like that [64:12] being marketed as energy bars and [64:13] Snickers being marketed as candy but [64:16] really what's the difference Snickers [64:18] launches in 1930 in [64:20] 1932 they add three musketeers to the [64:23] lineup now Three Musketeers originally [64:25] was something very different yes so [64:28] listeners you are probably thinking to [64:29] yourself a Three Musketeers Bar is just [64:32] that nou and chocolate it doesn't have [64:34] peanuts it doesn't have caramel why [64:36] would this come after a Snickers well [64:39] Three Musketeers is actually a misnomer [64:41] I see you're eating a Three Musketeers [64:43] way to be in theme it was actually sold [64:45] as a package containing three separate [64:47] bars each with a different flavor [64:49] chocolate vanilla and strawberry and due [64:51] to restrictions during World War II they [64:54] had to cut production to just the [64:56] chocolate version I think part of it was [64:58] also a spike in um strawberry prices and [65:01] so they just did away with the vanilla [65:02] and so now it's just called Three [65:04] Musketeers even though it's only the [65:05] chocolate variant one musketeer doesn't [65:08] have the same ring to it no no it [65:10] doesn't so if you're paying attention [65:12] here and thinking like wait a minute [65:15] they built this Factory in 1928 1929 [65:18] sales are skyrocketing Frank is living [65:21] large 1930 they introduced Snickers 1932 [65:24] they introduced three Musketeers what [65:26] else is going on in America and in the [65:28] world in the early 1930s the Great [65:31] Depression yeah this tells you [65:33] everything you need to know about the [65:35] resiliency of the candy business Mar's [65:38] Revenue goes up to $25 million in 1932 [65:42] they're just growing hugely I mean what [65:44] did we say Milky Way did [65:46] 800,000 in its first year in 1924 yep so [65:49] they go from 800,000 of Revenue in 1924 [65:52] to 25 million in 193 to all amidst the [65:57] throws of like the worst years of the [65:59] Great Depression yeah candy may not be [66:01] good for you but when you really need a [66:03] dopamine hit it is there for you and boy [66:06] does it condition a uh addictive or [66:09] addictive like activity where you sort [66:11] of incorporated into your habitual [66:14] everyday life it's a reoccurring [66:15] purchase and at this point in time [66:18] between Mars and Hershey both were laser [66:20] focused on keeping the price low to get [66:23] as wide a distribution as possible [66:25] that's exactly what I was going to say [66:26] you know forest and I think it probably [66:28] really was Forest here was closely [66:30] studying Hershey and what they did and [66:33] realized oh yeah this is a scale [66:34] business if we get to scale we can make [66:38] profits while pricing our bars such that [66:40] they are still accessible even for [66:42] Americans that have lost their jobs and [66:44] are in the middle of the Great [66:45] Depression and by the way they want a [66:47] sweet treat more than ever because their [66:48] lives are depressing brilliant yep [66:52] absolutely the other interesting thing [66:53] is nowadays you've got all these [66:56] variations of candy I mean M&M's Peanut [66:59] M&M's almond dark M&M's the Milky Way [67:02] The Three Musketeers and the Snickers [67:05] are all just adding one ingredient to [67:07] the same thing yes but they're not [67:09] labeling them that way they're building [67:11] entirely different brands and franchises [67:13] around each of these three products I [67:16] think that's fascinating they really [67:17] didn't get into this whole variation [67:19] thing until way later in their life that [67:21] was not the standard practice then this [67:23] is a different product it needs a [67:24] different name and a whole different [67:25] personality yep and actually you know I [67:28] think to be fair to Frank I think that [67:31] is really like Frank's influence on the [67:34] business and Company there Forest as [67:37] great as he was at so many things he was [67:40] never a product innovator in the way [67:45] that Frank was H makes sense as [67:48] evidenced by the fact that you know here [67:50] we are today eating the most popular [67:52] candies in the world that Mars makes and [67:54] it's still Snickers Milky Way Three [67:57] Musketeers M&M's which we will get into [67:59] that was Forest big contribution yep so [68:03] depression sales are going great here we [68:05] are 1932 the worst years of the [68:07] depression and Forest totally recognizes [68:11] all this like we need to invest invest [68:14] invest pedal to the metal we are going [68:16] to use everything happening here to blow [68:19] away our competition we're going to go [68:21] compete with Hershey we're going to [68:23] become huge Frank though has no interest [68:26] according to Forest quote my father says [68:29] we're making enough money we have an [68:30] airplane we've got the fishing place [68:32] we've got horses why do we need anymore [68:35] and forest's reply to that is quote I [68:38] want to conquer the whole goddamn [68:41] world so he issues his dad an ultimatum [68:45] look obviously you want to just go enjoy [68:48] life let me run things give me one3 of [68:51] the stock of the business you keep 2/3 [68:54] and you relax and I will make you even [68:57] richer Frank turns him down and I think [69:00] he turns him down in kind of insulted [69:03] like I built this business and you came [69:06] in recently and you're just randomly [69:08] asking me to give you a third of it go [69:10] to hell yeah and you know of course [69:13] there's more behind this forest was not [69:16] liked within the company he's driving [69:19] everybody hard Frank is this kind of a [69:22] distracted leader you can imagine Neo if [69:24] you're a line worker or even if you're a [69:25] manager within the company that's great [69:27] which boss do you prefer right yeah so [69:30] the company certainly sided with Frank [69:32] here there's also the family element too [69:35] Frank's got a new family now so he's got [69:38] his wife the other athl he's got his [69:41] daughter Patricia Frank's like yeah hey [69:44] I mean you're my son too you've helped [69:46] me build this business but I'm not just [69:48] going to give you a third of the [69:50] business either way there's quite a bit [69:52] of animosity around this and Forest [69:55] walks out and in the process tells his [69:58] dad to quote stick his business up his [70:01] ass there's no missing words in any of [70:03] these direct quotes it's crazy yeah [70:05] literally I mean this is what he said he [70:06] said so Forest leaves town not to [70:09] Chicago but leaves America entirely goes [70:13] off to a new continent to build his own [70:16] business his own way leave Mars [70:18] Incorporated totally behind him leave [70:20] him in the dust almost he takes with him [70:23] a right yes he has the right to what [70:27] David he takes actually two things with [70:29] him that his dad sort of gives him as [70:32] he's heading out the door one [70:36] $50,000 and two the foreign rights to [70:39] the Milky Way recipe yes but I don't [70:42] think the Milky [70:43] Way name no not the Milky Way name just [70:47] the recipe you can't Market this as [70:49] Milky Way but you can sell this recipe [70:51] internationally yep so farest takes [70:54] these two sort of parting gifs tells his [70:57] dad that he'll never hear from him again [71:00] leaves America entirely and super sadly [71:03] Frank doesn't ever hear from him again [71:05] yeah this is the last time that Frank [71:07] and Forest would ever speak yeah the [71:09] next year when Frank is just 50 years [71:11] old he collapses in the Chicago Factory [71:15] and dies of kidney failure and Forest [71:18] doesn't come back for the funeral yeah [71:21] yep that was it now granted in the 30s [71:24] much harder to come back from Europe on [71:26] short notice but still yep so Forest is [71:31] over in Europe and the set of events of [71:35] what he does in Europe to build this [71:39] ridiculous almost Trojan Horse like the [71:41] set of skills he acquires the assets he [71:43] builds up is crazy before he comes back [71:47] to the US and before we talk about his [71:49] European Adventure now is a great time [71:52] to talk about one of our favorite [71:53] companies the climate aligned AI [71:56] infrastructure company cruso yes they [72:00] build and operate GPU data centers for [72:02] AI workloads and each one is powered by [72:04] lowcost stranded energy that otherwise [72:06] would go to waste or Worse get emitted [72:08] as greenhouse gases for this episode [72:11] though we thought it'd be fun to talk [72:13] about what actually goes into building [72:15] and running a GPU cloud and how it's [72:17] different from traditional clouds run by [72:19] the hyperscalers right you might have [72:21] been thinking have Ben and David lost [72:23] their minds talking about a new cloud [72:26] provider in 2024 isn't it impossible to [72:28] compete with the incumbent hyperscalers [72:30] at this point and yeah if you're trying [72:32] to start a traditional Cloud but GPU [72:35] clouds are different yes counter [72:38] positioning yeah I mean all the [72:40] infrastructure that the hyperscalers [72:42] have built up over the past two decades [72:44] actually is not optimal for GPU clusters [72:47] yep which brings us to crucial [72:49] difference number one location [72:52] hyperscaler data centers need to be [72:54] physically located where the internet [72:56] happens like latency is really really [72:58] important when say you're powering an [73:00] e-commerce website but for 99% of AI [73:03] training workloads latency actually [73:05] doesn't matter at all so instead cuso [73:08] puts their data centers in remote [73:10] locations where quote unquote energy [73:12] happens like where oil is being flared [73:15] and you can take that energy and use it [73:17] to power your data center totally so [73:20] this not only creates cost efficiencies [73:23] it also just enables way more absolute [73:26] power density in a single location which [73:28] is super important when you're trying to [73:30] build a huge GPU cluster yep and that [73:33] leads to big difference number two [73:34] cooling AI training generates a [73:37] tremendous amount of heat and [73:38] traditional cloud data centers usually [73:40] manage that with air conditioning but [73:42] air cooling is not going to cut it when [73:44] you're running a massive GPU cluster [73:46] full out for weeks or months on end so [73:49] cruso builds their data Halls which is [73:51] the rows of racks within data centers [73:53] with direct to chip liquid cooling this [73:56] is where the liquid coolant gets pumped [73:58] through the racks to coldplate heat [74:00] exchangers mounted directly on each [74:03] individual chip yep it's super cool this [74:05] is all state-of-the-art stuff and [74:08] impossible for the hyperscalers to [74:09] replicate in their existing data center [74:11] Footprints which means that kuso's [74:13] customers get AI infrastructure that [74:15] just scales way way better bigger GPU [74:19] clusters with less failures and when [74:21] you're trying to train Cutting Edge [74:22] large parameter models that doesn't [74:25] doesn't just mean lower usage costs and [74:26] better efficiency it can mean the binary [74:29] yes or no difference in being able to [74:31] accomplish your workload at all it's [74:33] just an awesome awesome company David [74:34] and I are super proud to work with them [74:36] and also to be investors so to learn [74:39] more go to cruso doai acquired that's C [74:43] o./ acquired or click the link in the [74:45] show notes and just be sure to tell them [74:47] that Ben and David sent you thank you [74:50] cuso all right Forest summer in [74:53] Europe little little longer than a [74:55] summer summer or you know close to a [74:58] decade in Europe so we're here at the [75:00] end of 1932 forest and his young family [75:05] now by the way with his young son Forest [75:07] Jr land first in Paris and Forest tries [75:12] a couple little things but eventually he [75:15] decides that if he's really going to [75:17] build his own big company and stick it [75:20] to his dad he needs to learn the one [75:22] critical thing that is dad didn't know [75:26] he needs to learn how to make chocolate [75:30] yes no better place than Europe to learn [75:32] here's his quote on it you can hire [75:34] lawyers you can hire accountants you can [75:37] hire advertising men or financial types [75:39] but if you want to get rich you got to [75:41] know how to make a product and you [75:43] aren't going to hire anybody to make a [75:45] product for you to make you rich they'll [75:46] only make it for themselves true that [75:49] Forest is just like he's such a freaking [75:52] G like if it hasn't come across already [75:54] on this episode he is Hall of Fame [75:56] complete G you got to know how to do the [75:59] scarce thing totally so important so in [76:03] early 1933 Forest moves his family from [76:07] Paris to Switzerland to go learn from [76:10] the chocolate Masters and Forest goes to [76:13] work first at Jean tobler making tobler [76:17] own and then at the original itself [76:21] Nestle in the factories without [76:24] disclosing to any anyone who he is so [76:27] yeah when I say he goes to work there [76:29] it's not like he calls them up and is [76:31] like I'm Forest Mars he doesn't tell [76:34] anybody who he is his quote on this [76:36] later is like well they never asked and [76:39] he doesn't go get management roles he [76:41] goes and gets jobs on the line as a [76:43] factory worker learning directly how [76:47] these machines work how these chemical [76:49] processes work how to make chocolate [76:53] amazing who would do this today it takes [76:55] a very specific type of person if you're [76:57] sitting there thinking H only some [77:00] European company knows how to do this [77:02] well and I'm someone who attended an Ivy [77:04] League College my family is wealthy I'm [77:07] friends with the dupons not only that [77:10] I've basically feel like I've already [77:12] built a $25 million business but I'm [77:14] going to upend myself my family and my [77:17] life and go and be a line worker in a [77:20] plant in another country I mean in this [77:23] era in the 30 where it's difficult to [77:26] get over there I imagine he went by boat [77:28] I imagine they didn't speak English in [77:30] the Swiss Factory yeah would you ever do [77:34] this listener if you're looking around [77:35] at a pretty good life that you have and [77:37] you're saying I'm going to go to a [77:38] different continent move my family up [77:40] and my whole life so I can go and learn [77:42] this scarce skill that I know is the key [77:45] to building a world dominating business [77:47] it's a big trade-off big big tradeoff [77:51] and totally on brand for Forest cuz you [77:54] couldn't learn it in America that's the [77:55] other thing Hershey is super secretive [77:58] at this point in time no one knows their [77:59] formula well I think not only is Hershey [78:02] super secretive the sense I get at least [78:06] from Emperors of chocolate is they knew [78:10] how to productionize their recipe but [78:15] they didn't actually know the science of [78:17] how it worked they kind of got there [78:19] through trial and error huh the sense I [78:21] got is that the European chocolate [78:23] manufacturers and probably Nestle [78:24] particular they really knew what they [78:26] were doing and Hershey sort of in an [78:29] industrial sense knew what they were [78:31] doing but nobody there really knew the [78:32] science behind it and in fact there's a [78:34] story about how the first plant that [78:38] Hershey expands to their first second [78:40] plant outside of Hershey Pennsylvania [78:42] they can't get it to work they can't get [78:44] the chocolate to taste the same H [78:46] because they like don't exactly know how [78:49] they get that specific sour note in The [78:51] Taste that's so interesting but anyway [78:54] back to Forest so for most of the year [78:58] of [78:59] 1933 they're just in Switzerland and [79:01] he's working on the factory lines [79:03] learning how to make chocolate and then [79:05] toward the end of the year when he feels [79:07] like he's learned everything he needs to [79:08] know he moves the family to England [79:12] where he uses the $50,000 to open up a [79:14] small Factory in slow England which is a [79:18] small industrial town about 20 mil west [79:21] of London it's right near where heo [79:23] airport is today and he installs the [79:26] family in a one room apartment above the [79:28] factory and they start making a version [79:32] of the Milky Way adapted to British [79:35] tastes which basically means more sugar [79:38] right yep more sugar and less malt malt [79:40] is not as big in British tastes so he [79:43] has the recipe to the Milky Way that [79:45] he's adapted now for British tastes but [79:47] he doesn't have the naming rights and so [79:50] he names it the Mars bar and this of [79:53] course goes on to become the most [79:55] popular candy bar in the UK I think [79:58] still to this day the funny thing is the [80:01] lineage of this weird family split and [80:04] this you have the rights to the recipe [80:06] but not the marketing is the way that [80:09] the world works today even though they [80:11] are spoiler alert one company now if you [80:14] get a Milky Way in the US and you go and [80:16] you get a Mars bar in the UK they're a [80:18] little different the way you just [80:19] described but those are effectively the [80:20] same products they never unified the [80:22] brand yes now there is also an important [80:26] difference besides the level of [80:29] sweetness and level of malt and that is [80:31] the type of chocolate that is used in [80:34] the marsbar versus the Milky Way o the [80:36] marsbar is Cadbury right well in these [80:39] early days yes so Forest has now learned [80:41] how to make chocolate but of course with [80:43] $50,000 in a new startup Factory like [80:45] there's no way that he's going to make [80:47] his own chocolate everything we talked [80:49] about in chocolate making it's like an [80:50] insane amount of capex really hard easy [80:53] to screw up potentially low Yi yep [80:56] totally and like you know how are you [80:57] going to get the supplier relationships [81:00] for the beans and like that requires a [81:02] lot of capital etc etc and this part of [81:04] the value chain really wasn't well [81:05] established yet where there's these [81:07] companies specifically to go buy [81:09] commodity beans from it was starting but [81:10] it was early yeah Cargill wasn't the [81:13] like massive giant with global liquidity [81:16] for Commodities buying and selling that [81:18] it is today speaking of gigantic us [81:21] privately held companies yes exactly [81:23] we'll have to do that [81:25] yep so as you said Forest goes and does [81:27] deal with CAD berries to supply the [81:29] chocolate for the Mars Bar just like [81:31] Hershey had supplied the chocolate back [81:33] in the US this is also important because [81:35] remember we were saying their local [81:37] tastes in each Country Market for [81:39] chocolate and Cadbury's chocolate is to [81:41] the British taste so it actually is a [81:43] pretty different bar even though the [81:46] core concept is very similar H but it's [81:49] just a matter of time in Forest mind [81:51] until the operation eventually grows big [81:52] enough that he can and will make his own [81:55] chocolate David there is a Milky Way [81:57] that you can buy today in the UK do you [82:02] know what that is [82:04] oh I do but I'm not remembering Three [82:07] Musketeers that's right I knew it was [82:09] one of them I was like it's not Snickers [82:11] that is the brand that they decided to [82:12] use for Three Musketeers overseas and um [82:16] Snickers originally was Marathon I [82:19] believe in the UK yes but now globally [82:22] Snickers is Snickers so yeah yes far not [82:25] making his own chocolate just yet but of [82:27] course his goal is that he will he has a [82:29] great saying that he repeats often that [82:31] I think this is maybe around the first [82:32] time it starts coming up I'm not a candy [82:35] maker I'm empir minded and that's like [82:37] his [82:39] Mantra so once they start producing the [82:41] Mars Bar pretty quickly it becomes a hit [82:44] and starts going really well so by [82:48] 1939 five years is after they get [82:51] production up and running Mars UK has [82:53] become the Third largest candy company [82:55] in Britain behind Cadbury and round [82:58] trees so like they go from nobody to [83:02] third largest player big industrial [83:04] scale pretty quick and in part I mean [83:07] this is American capitalist coming in to [83:11] an industry I don't know if you know [83:13] this or not both of those families were [83:15] Quakers oh I didn't know that [83:17] interesting and so there was a pretty [83:21] intense Spirit behind the company of [83:25] looking after your community Yep this is [83:27] Cadbury's in R tree right yeah in [83:29] particular Cadbury built their Factory [83:32] outside the city in sort of this almost [83:35] attempt at a Utopia very Hershey like in [83:38] the same way that actually Milton [83:39] Hershey was inspired by when he built [83:42] Hershey PA so there's this very like [83:45] devout Duty bound religiosity to the [83:49] existing UK chocolate companies and in [83:52] comes Brash Forest who's like we're [83:54] going to do things the most efficient we [83:56] possibly can we're going to make the [83:57] most profit we possibly can and we're [83:58] going to distribute as broadly as we can [84:01] as fast as we can in many ways it feels [84:03] uh Bernard Arno esque like you guys look [84:06] what I learned in America yeah yes very [84:08] very much so it's funny I was I wasn't [84:11] even going to tell this story because he [84:14] I don't know how true it is it's just [84:15] ridiculous but we'll tell it because I [84:17] didn't realize the religious element of [84:19] the competitors so [84:22] Forest oh yeah uh [84:25] oh man eventually Flash Forward he will [84:28] come back and he will retake over Mars [84:30] Inc in America and when he does his [84:33] first thing he does is he goes in the [84:34] boardroom it's a management meeting it's [84:36] to his Executives and he falls down on [84:39] his knees and says I'm a religious man [84:42] and he clasps his hands together and [84:44] starts to pray I pray for Milky Way I [84:47] pray for [84:48] Snickers I pray for [84:51] M&M's no what a freaking character [84:55] yeah if he was religious at all he was [84:57] religious about Milky Way and Snickers [84:58] and M&M's Y and dog food so to this [85:03] Empire thing so in 1934 just one year [85:07] after he started the whole thing and [85:09] started making Mars Bars he comes across [85:13] this small British company called Chapel [85:15] Brothers which had started making quote [85:19] unquote chappies brand canned dog food [85:23] and this is crazy crazy at the time [85:26] nobody fed their pets pet food oh really [85:29] pets dogs cats they just ate table [85:31] scraps oh this whole idea that you feed [85:34] specific pet food to pets this all [85:38] started in the 30s like before that you [85:41] know it's like I don't know imagine go [85:42] back to Medieval Times like the dogs and [85:44] cats they just Eat Right throw them a [85:46] ham that's the way you clean the table [85:49] right so I have no idea how or why I [85:53] couldn't fight it either I looked all [85:54] over the place I was like why of all the [85:56] things to buy did he buy a pet food [85:58] company totally and why did the chapel [86:01] Brothers start making pet food I don't [86:04] know there is like as little information [86:07] as there is about the company and the [86:08] family what we do have we have about the [86:10] chocolate business we have almost no [86:12] information about the pet business and [86:14] who are you going to ask the chapel [86:15] brothers are long dead Mars isn't going [86:18] to tell you but I'm so curious how did [86:21] Forest get the idea hey I should go buy [86:23] a dog food company when the market for [86:27] dog food is new and unclear and yeah [86:30] well I think you know look he was [86:32] Visionary and he got so many things and [86:35] I think he probably thought or maybe the [86:38] chapel Brothers thought and convinced [86:40] Forest that you know in the post [86:42] Depression era and you know the coming [86:45] modern world people's relationship with [86:47] their pets would change and that they [86:51] would start feeding them dedicated pet [86:54] food I mean and obviously that was a [86:56] huge huge Trend and there's kind of [86:59] economies of scale to the manufacturing [87:00] of this making canned dog food isn't [87:02] that different than making snacks yeah [87:04] it's a manufacturing process so yeah [87:07] interestingly enough like I learned this [87:10] and the fact that this happened in 1935 [87:12] completely blew my mind CU I knew that [87:14] Mars was in the Pet Food business much [87:16] like Nestle purina is in the Pet Food [87:19] business I thought this was like a [87:21] recent diversification hedge but here it [87:23] is L at the founding of mars or at least [87:26] forest's modern Mars and he's in the [87:30] first second year of business buying and [87:34] diversifying to pet food and it was [87:37] immediately a good idea because it [87:39] became profitable after just a couple [87:41] years and started generating enough cash [87:43] flow to fund the expansion of marsbars [87:47] yeah it's um good margins in the Pet [87:49] Food business apparently even in 1935 [87:52] yeah so that's a huge success so as this [87:55] company is getting set up I mean would [87:57] you expect any less of forest I guess [87:59] you know he's hitting it out of the park [88:01] with marsbar on the candy side he's [88:03] building a whole new industry on the pet [88:05] food side and this here in slow in [88:10] England is really where the principles [88:13] you know literally the principles Mars [88:15] calls them the five principles of the [88:17] company today but just the culture of [88:19] Mars gets set oh yeah you found the [88:21] original ones right yes so if you talk [88:23] to anybody who works or worked at Mars [88:26] they will quote the principles at you [88:27] religiously it's like the Amazon [88:29] leadership principles totally it's like [88:30] oh that's principle number five Freedom [88:31] or oh that's principle number three [88:33] mutuality etc etc I think how these [88:36] started maybe even back in England [88:41] Forest started a a document called the [88:44] Mars way where he was like codifying all [88:46] this and I think and after he retired [88:49] and the business passed to his sons and [88:51] the Next Generation I think that's when [88:53] they sort of adapted that document into [88:55] the Mars principles but it's really [88:58] interesting it's worth going through the [88:58] mall so number one the first principle [89:01] is quality forest was completely [89:04] obsessed with quality on every Dimension [89:07] you know the ingredients that are going [89:09] into the candy bars the candy bars [89:10] themselves the wrappers the Shelf [89:13] placement displays he was way ahead of [89:16] the curve on all this stuff he knew the [89:18] candy was an impulse purchase and like [89:20] the way the product actually looks how [89:23] it's displayed what the packaging is [89:25] what the placement is in the Shelf in [89:27] the retailer how consistent it is how [89:30] consistent it is these were like big big [89:32] drivers of purchases and there's of [89:34] course the famous story about he uh you [89:37] know finds a defect in a rapper and then [89:40] he calls his Executives into a room and [89:42] he hurls it at the glass and says you [89:44] know yeah it's his temper and his [89:46] obsession with quality all combined into [89:48] one yeah I'm laughing you say famous [89:49] story I'm like which one I think there a [89:52] million of these stories but even here [89:54] in the 30s in the UK he basically [89:58] implements the Toyota production system [90:01] in the Mars Factory this is long before [90:04] the Toyota production system exists any [90:07] employee in the factory could stop the [90:10] line for any reason at any time H if [90:14] there's anything that's out of place [90:15] anything that could impact quality you [90:17] know anything is dirty anything is not [90:19] perfect every single worker in the [90:22] entire facility can stop the whole line [90:25] and he also if something had a defect he [90:27] would throw out the whole batch right [90:29] yes as like a let's Scorch the Earth [90:31] around the defect yep I'm sure he wasn't [90:34] thinking about it in these terms but he [90:36] really wants to instill this as a [90:38] cultural norm in the company so anytime [90:41] if there was a mistake that Forest then [90:43] found that hadn't been caught on the [90:45] line he would just berate whoever should [90:48] have stopped the line and be like you [90:50] needed to have stopped and fixed this [90:53] like you cannot let this get into the [90:54] finished product the other aspect of the [90:57] quality principle though much like Ikea [91:00] it's not just quality for Quality sake [91:02] it's quality for money it's quality at a [91:06] given price value for money you know [91:08] we've already been talking about how [91:09] this is like the ultimate scale business [91:11] and scale economies business in candies [91:13] Forest knows that if you can offer a [91:15] higher quality for a given price than [91:18] your competitors you're just going to [91:19] build a lead and compound forever and [91:21] ever and ever in this business [91:23] interesting so quality principle number [91:25] one most important two this is awesome [91:29] responsibility is the second principle [91:33] and he might be like oh responsibility [91:34] like okay whatever for all of his crazy [91:37] intensity forest was not a [91:40] micromanager he wanted to like know how [91:43] to do everything in the business [91:44] including making chocolate but he knew [91:46] that if he was going to scale like he [91:48] wants to be Dupont here you know he [91:49] wants to be General Motors he needs the [91:52] best people working the hard artist in [91:55] charge of everything like he can't be [91:56] around telling them how to do their jobs [91:59] so the question then is when you're [92:00] starting up in a new country tiny [92:02] Factory how do you get the best people [92:04] how do you incentivize them he's like [92:06] well I'll just pay them I'll just pay [92:07] them a lot so for years in years the [92:11] standard within Mars was that you should [92:13] make three to four times the normal [92:16] salary for your job that's so insane and [92:19] I think that's come down over the years [92:21] it's now like 2x but it's still true I [92:23] even saw numbers that say they try to [92:25] pay their employees a minimum of 10% [92:27] higher than other companies in the [92:29] industry ah interesting but definitely [92:32] in those early days it's like no we're [92:34] going to pay you three or four times the [92:36] amount that you would make elsewhere I [92:37] also know they try to tiay aggressively [92:40] to the performance of the company so [92:42] high bonuses rather than high salaries [92:44] which also means in tough years they [92:45] would just cut it's not quite having [92:47] equity in the company but it's much more [92:49] akin to being a partner in a business [92:50] than it is to being an employee exactly [92:53] Okay so so you know I said salaries it's [92:55] not salaries it's bonuses this is what [92:57] your take-home pay should be everyone's [92:59] salary in the company again starting in [93:02] the earliest days there in slow tied to [93:05] overall company performance and hitting [93:08] overall company metrics there is no at [93:11] least in the early days individual [93:14] performance element to your bonus except [93:16] for one thing do you know what the one [93:18] thing is the one individual performance [93:20] metric did you show up on time you get a [93:22] 10% bonus if you are never late in the [93:26] entire year and it's everybody from [93:28] forest himself on down everybody has a [93:31] time card you punch the time card when [93:33] you go in I'm pretty sure this is still [93:35] true that the CEO of Mars today has a [93:38] time card and they punch in and out [93:39] every day and a 10% bonus is contingent [93:41] on not being late so even more I don't [93:45] think this terminology starts until they [93:47] get back to America but everybody in the [93:50] company is an associate obviously people [93:52] are in charge of different things and [93:54] have different external titles but [93:56] internally everybody is an associate [93:58] there are no perks for anyone so there [94:02] are no executive parking spaces there's [94:04] no Executive offices boy forest really [94:06] wants to rebel against his father there [94:09] are no offices period to this day at [94:12] Mars is this the first open Office [94:15] company so we said on the meta episode [94:18] that we thought Facebook was the first [94:19] open Office no Mars was the first open [94:22] Office starting in the 19 1930s so every [94:25] building entirely open floor plan you [94:28] get a black metal desk get this this is [94:31] how crazy it is again even still to this [94:33] day there are just a small number of [94:35] conference rooms in any given Mars [94:38] office oh yeah because they hate [94:39] presentations right they hate [94:41] presentations they hate meetings but [94:42] like sometimes you have to have a [94:44] meeting the conference rooms do not have [94:47] doors there is no privacy allowed [94:51] anywhere which is the craziest thing [94:53] given the company itself externally is [94:55] incredibly private but no internally the [94:58] culture is everything is open everyone [95:00] is equal there are no perks here [95:02] whatsoever and farest is doing this in [95:05] the 30s this is crazy I was going to [95:07] save this for later but this is a fun [95:08] time I Google mapped the recent Factory [95:12] that they built to make M&M's and it's [95:14] like a corporate headquarters and [95:15] Manufacturing facility and there's a [95:18] bunch of pictures on Google maps of the [95:20] exterior and interior just like you [95:22] would expect from anything that's on [95:25] Google Maps and it's pretty dated it's [95:28] just a very boring drop sealing [95:31] fluorescent lit cheap office and the [95:35] real estate that it's on is like near an [95:36] Amazon fulfillment center I mean it's [95:38] like kind of off the highway in the [95:40] middle of no we [95:41] inexpensive but there are two big M&M's [95:44] waving at you out of the parking lot I [95:46] think that's the standard decoration [95:49] yeah you can tell how pissed forest was [95:51] at his dad about about the Chicago [95:54] Factory specifically but also just like [95:56] how deep-seated this is yeah okay so [95:59] then principle number three is mutuality [96:02] so Forest obviously is like hyper [96:04] competitive but he also knows that this [96:06] is an ecosystem that he's in and the [96:10] retailers are super important the [96:12] suppliers are super important [96:13] Distributors are critical everyone needs [96:16] to make money and everyone needs to be [96:17] incentivized for the long term and as [96:19] long as his partners are making money [96:21] and making more money selling Mars [96:23] product are supplying Mars than they are [96:26] any of Mars's competitors that's going [96:28] to be a compounding Advantage yep so [96:31] that's three four is efficiency okay [96:34] this is a really really interesting one [96:37] probably back to his whole mindset and [96:41] time at Yale and studying DuPont Forest [96:44] is crazy about studying business and [96:47] management Literature Like I don't think [96:49] anybody was reading business management [96:52] literature in the 1930s and 1940s it's a [96:55] good point it's true both for management [96:58] and for investing if you think about the [97:00] way that people were even investing back [97:01] then it was like stocks were gambles you [97:04] know Buffett was one of the first people [97:06] to believe the intelligent investor oh [97:08] you can tell something about the quality [97:10] of Revenue and this intrinsic way to [97:12] build to a value of a business the [97:14] investment mindset of quality and a [97:17] discounted cash flow and the management [97:18] mindset of there's a science to building [97:21] an organization these were pretty new [97:23] IDE ideas totally I mean Buffett had to [97:25] go study with Ben Graham to learn this [97:29] stuff yep so while he's in England [97:33] Forest reads a textbook called higher [97:36] control in management by TG Rose and the [97:40] subtitle of this book is a method of [97:43] producing the facts and figures of [97:45] Industrial and Commercial undertakings [97:48] so that they can be used for the purpose [97:49] of management it's quite academic yeah [97:52] business AC demia had not yet learned [97:54] marketing about [97:57] itself so in the book though Rose argues [98:01] that the primary focus of management [98:03] should not be on revenue or profit or [98:05] growth but instead on a metric called [98:08] return on total assets or Roda and again [98:12] if you talk to anybody in Mars today Roa [98:14] Roa Roa Roa everything is about Roa it's [98:16] funny I came across this researching I [98:18] had to look up the term we've never [98:20] studied it on an episode before all [98:22] right so what is return on total assets [98:24] it is net profit dollars divided by the [98:28] total dollar value of the company's [98:30] fixed assets so it's effectively an [98:33] efficiency metric of your profits [98:36] divided by your fixed cost of your [98:39] assets yep now the textbook way to do it [98:42] is by the cost of your assets as [98:44] measured on your balance sheet the way [98:46] forest does it though and the way the [98:48] company still does it today is no that's [98:50] insane like whatever this is valued at [98:52] on our balance whatever it cost us to [98:54] build this Factory 10 years ago doesn't [98:56] matter what matters is what is the value [98:59] of it today oh interesting so they are [99:02] constantly revaluing what the [99:05] replacement cost is of all their fixed [99:07] assets all their factories Etc like okay [99:10] if this Factory disappeared what's the [99:12] market value if we were to sell this [99:14] thing and get rid of it exactly and so [99:16] that way they're always making sure that [99:18] they're like hey we're really [99:20] efficiently using our assets we're not [99:23] just artificially being efficient based [99:25] on what we paid for them 10 20 years ago [99:28] it's fascinating so for you and I it' be [99:30] like the profit dollars of the business [99:32] from sponsorship divided by the cost of [99:34] our microphones and you know the very [99:36] modest tangible assets that we have in [99:38] this business actually I think if we [99:40] were to use this we would divide our [99:43] profit dollars by the value of the [99:45] acquired brand and we would value the [99:47] acquired brand sort of as highly as [99:50] possible so you're basically wanting to [99:52] say per unit of fixed investment I've [99:55] made how much yield in terms of profit [99:57] am I getting out of the fixed investment [99:59] I've made exactly I'd argue David that [100:02] for acquired we'd actually want to use [100:03] our time valued at some certain amount [100:06] as the denominator what's our [100:08] profitability per unit of time which is [100:11] our fixed resource well it depends I [100:13] think what you think is more valuable [100:14] our time or the acquired brand we should [100:18] probably do both actually who knew this [100:20] would turn into an actual holiday [100:22] special yeah so anyway supposedly Forest [100:26] had and Mars has or at least used to [100:30] have a specific Target of [100:34] 18% return on total assets for every [100:37] Division and every Factory which means [100:40] essentially that every investment needs [100:42] to pay for itself in less than 5 years [100:45] so if you're making 18% of your value [100:47] back every year you know that would be [100:49] like 5 sixish years if you're using the [100:52] textbook definition [100:53] but they're always increasing the value [100:55] of their assets so it's like in effect [100:58] anytime Forest is making a decision to [101:00] invest in something he's like I want [101:02] like foure payback on this four to five [101:04] year payback and they don't want to be [101:06] higher or lower than the 18% right [101:09] because if you're lower than 18% you're [101:11] not using your resources enough to [101:13] generate enough profit if you're higher [101:16] then you're taking too much profit [101:17] you're taking too much profit which is [101:19] bad for your customers or you're not [101:21] reinvesting aggressively enough yeah you [101:23] should be spending more on advertising [101:25] and marketing etc etc right it's totally [101:29] fascinating I have a couple um other [101:31] things on efficiency that I was going to [101:33] say for Playbook but since we're here we [101:34] should bring them up yeah let's do it so [101:36] this one comes from friend of the show [101:37] Arvin navaratnam at worldly Partners who [101:40] writes this great research that we link [101:42] to from every episode now he pointed out [101:44] that despite operating with 30% fewer [101:47] employees than its closest competitor so [101:50] today this is Mars versus Hershey Mars [101:52] generat ated more output per worker than [101:55] any other in the industry so in 1990 for [101:59] example Mars's Revenue averaged 429,000 [102:02] for employee compared to 228,000 at [102:05] Hershey so they're just doing more with [102:07] less yeah miles ahead and I think part [102:11] of this comes from the fact that they're [102:13] just amazing at the industrialization of [102:15] production David you raised that point [102:18] that the factories run 24 hours a day [102:20] and at that Chicago plant you know I [102:22] think today the funsize Milky Way bars [102:25] are produced at over 5500 bars per [102:29] minute it was a stat that I saw they [102:31] just run at incredible efficiency in [102:33] production but they also then do [102:36] effectively share this increase in [102:38] efficiency with employees by doing the [102:41] higher pay and the bonus based pay so if [102:44] the revenue per employee is way higher [102:46] than their competitors like Hershey they [102:47] should pass some of that efficiency [102:49] benefit along to their employees in [102:51] terms of higher compensation with in [102:53] turns retains people for longer you know [102:55] which keeps tribal knowledge around [102:57] which decreases recruiting cost I mean [102:59] it's very Costco like in that way it is [103:01] it's totally a flywheel type reinforcing [103:04] structure where it all fits together the [103:06] other thing that they do is they [103:08] aggressively try to reinvest profit [103:11] dollars back into the business doing [103:13] things like R&D on new types of [103:15] manufacturing equipment that they can [103:17] build for their plants that's the [103:18] primary benefit the second benefit is [103:20] they don't pay as many taxes since [103:21] they're reinvesting for those dollars [103:24] fall all the way to the bottom line as [103:25] income yep totally it's very uh John [103:28] Malone esque they want to keep as much [103:30] capital in the business as possible and [103:32] not recognize a lot of it as income yep [103:35] Malone and Buffett too yep so then that [103:37] brings us to the last principle which is [103:40] freedom which you know I think in the [103:42] early days here to the extent Forest [103:45] thought about this as a principle like I [103:47] think it was just like he wants to build [103:49] his own business be free from his dad be [103:51] his own person prove himself [103:53] over time this comes to mean family [103:55] ownership and not going public being a [103:58] private company not taking on debt and [104:00] then in the Next Generation after forest [104:03] and Beyond it means being incredibly [104:05] private we've alluded to the privacy of [104:07] the family like for years the family [104:09] refused to have any photographs taken of [104:12] them for fear that they might get [104:13] published they really really mean it [104:15] about being private in fact when Joel [104:18] wrote The Washington Post article do you [104:19] know the thing about the photographs I [104:22] think it was the first [104:23] time that John and Forest Jr had ever [104:26] been photographed in public it was but [104:29] then Mars didn't like the Washington [104:32] Post article like didn't like the way it [104:34] came out so not only did they then fire [104:36] their PR consultant they went and found [104:38] the newspapers freelance photographer [104:40] and paid off $20,000 for the rights to [104:43] the photos to be sure they couldn't be [104:45] reused yeah wild just wild but as we've [104:49] talked about from Ikea to our business [104:51] here at acquired complete ownership or [104:54] at least board control in meta's case is [104:56] freedom you can do things like invest [105:00] for 10 years from now when it's going to [105:01] be a super lumpy period between now and [105:04] 10 years from now if you believe in the [105:05] long-term Vision you can sub optimize [105:08] the shortterm and for Mars that means [105:10] private ownership yep and I think it [105:12] means things like you can operate with [105:15] Roa as your primary operating metric [105:18] instead of profitability good point so [105:21] back to the farest tomor story in [105:24] progress starting up in the 30s amazing [105:27] success story within a couple years by [105:29] the end of the decade they're the third [105:31] biggest candy company in the country [105:35] incredible achievement Riding High and [105:38] then the end of the 30s brings something [105:40] else which of course is World War II yep [105:44] now to hear Forest tell it the UK [105:48] government decides that in order to help [105:51] fund the war effort they're going to [105:53] impose a very heavy tax on All Foreign [105:57] residents living within the country [105:59] which of course would include forest and [106:02] Lars family which is kind of an [106:03] interesting philosophical tax we need to [106:05] go to war how are we going to finance [106:07] the war well who's riding the coat Tales [106:09] of us being an awesome place to live but [106:11] isn't actually a citizen let's tax them [106:13] to pay for the war right and so he would [106:16] also claim that he believed that it was [106:20] Cadbury's and round trees that actually [106:23] lobed Parliament to implement this tax [106:26] expressly to run him and Mars out of [106:29] town because they were threatening their [106:31] business chocolate was a big national [106:32] business they were among the biggest [106:34] companies in the country totally it's [106:36] not unreasonable to think that on the [106:39] other hand I suspect Forest also had his [106:42] Ambitions always on coming back to [106:45] America anyway and now seemed like a [106:47] pretty good time to do it in fact it was [106:50] a very very good time to do it so in [106:55] 1939 he leaves all of his businesses [106:59] running in the UK and he moves with his [107:02] family back to the US also that's crazy [107:06] the fact that you can trust someone in [107:09] the UK as World War II is breaking out [107:11] hey you run these businesses that I own [107:14] and I can trust that I continue to own [107:17] them while I move across the ocean I [107:19] wouldn't be confident that when all the [107:21] dust settled I would continue to own [107:22] those businesses totally right which if [107:25] cbes and round trees was actually behind [107:28] trying to run forest out of town clearly [107:30] they didn't know the Loyalty of his [107:32] employee base well enough yeah yeah [107:35] totally wild in 1939 that Forest could [107:38] do that so he moves back to America and [107:40] of course he has his sight set back on [107:43] Chicago and Chicago Mars honey I'm home [107:48] yeah remember Frank had died a few years [107:51] before and at this this point Chicago [107:54] Mars is being run by forest's widowed [107:57] stepmother the other Ethel and her half [108:01] brother who is the president and CEO of [108:04] the business and they of course detest [108:07] forest and they won't let him anywhere [108:10] near the company and who owns the [108:12] company at this point so Forest has some [108:15] shares after his dad has died but he's [108:18] by far a minority shareholder the [108:20] biggest shareholder I believe is the [108:22] other [108:23] the second wife and then Forest half [108:26] sister Patricia her daughter also holds [108:29] a large stake and then I think the [108:31] employees of the business owned Equity [108:33] at this point so Forest I don't know I'm [108:36] guessing he probably owns maybe 10 maybe [108:38] 20% of the business not enough to be a [108:40] controlling shareholder okay so forest [108:44] does what forest does he says the hell [108:46] with you I started from scratch once to [108:48] prove you all wrong I can start from [108:50] scratch and do it again back here in [108:52] America America which is the final [108:54] Gauntlet right it's one thing to go [108:56] across the ocean and start from scratch [108:57] in a smaller Market where no one knows [108:59] your name you can kind of sneak around [109:00] and do these deals now he's here in [109:03] America can he start a from scratch [109:05] candy company on the world's greatest [109:07] stage which on the one hand he has more [109:11] connection here and more resources on [109:12] the other hand he's battling the old [109:14] Mars at every step of the way right and [109:18] he hasn't lived here in close to a [109:19] decade right but he's confident in his [109:24] chances because he has brought back a [109:27] secret weapon before Forest leaves [109:31] Europe he had spied a new to him at [109:35] least type of chocolate candy that had [109:37] become popular with soldiers in the [109:40] Spanish Civil War called drag and I [109:43] think it's called Dr because I believe [109:45] it was originally a French style of [109:47] candy intended for French Noble ladies [109:51] who wanted to to eat chocolate but not [109:55] have the chocolate melt on their white [109:57] gloved hands oh interesting and so what [110:01] is Dr well Dr is small round pieces of [110:06] chocolate coated with a candy shell to [110:09] prevent them from melting in your hand [110:13] or in hot weather and confectioners call [110:16] this hard panning the colored candy [110:18] shell which is effectively hardened [110:20] sugar syrup yes and so farest as he's [110:23] heading back to the US thinks you know I [110:26] think there might be some Global appeal [110:28] here in this dra product but before we [110:31] tell the M&M's story now was a great [110:35] time to tell you about one of our [110:37] favorite companies stat EG yes we are [110:40] going to do something a little bit [110:42] different today listeners by sharing a [110:44] story from one of their customers Blue [110:46] Sky I was somehow not at all surprised [110:49] when stat Sig told us Blue Sky was a [110:51] customer it really does seem like every [110:53] up-and-coming tech company these days is [110:55] using stats Sig open AI figma versel [110:58] notion Blue Sky Etc yep so listeners by [111:02] this point you've probably heard of Blue [111:03] Sky they're a new open Social Network [111:06] that has a serious emphasis on user [111:08] choice for example users can build their [111:10] own home feed and move between apps in [111:12] the open ecosystem and if you ever [111:14] decide to leave blue sky or switch [111:16] providers you can just take all of your [111:17] followers with you they've got a ton of [111:19] momentum and David I didn't even tell [111:21] you this yet I actually just set up the [111:23] acquired FM account there yesterday ah I [111:26] saw the email come into the acquired FM [111:28] email address that must be what that was [111:30] yep the influx of new users that they [111:32] have gotten over the last few weeks is [111:34] massive they have added 10 million new [111:36] users just in the last couple weeks [111:38] pretty crazy for a relatively new social [111:40] media app yep and the blue sky team has [111:43] been using stat Sig for pretty much [111:45] everything from running experiments to [111:47] collecting user analytics and releasing [111:49] new features we asked Blue Sky to share [111:51] a couple specific use cas with us to [111:53] illustrate one when the Brazilian [111:56] Supreme Court banned X in Brazil Blue [111:58] Sky obviously saw an influx of Brazilian [112:01] users the way they realized this was [112:03] stats IG they had a dashboard that [112:06] tracked posts by language and all of a [112:08] sudden they saw Portuguese post Spike [112:10] which tipped them off two you may also [112:13] be one of the many people crying out [112:15] that you just wish you had a feed of [112:17] people you follow in chronological order [112:20] like the old days of social media blue [112:22] sky has been using stat Sig to run an [112:25] experiment to mathematically prove that [112:27] users want and enjoy this style of [112:30] browsing a feed it's kind of an [112:32] inversion of the rest of algorithmic [112:34] social media these days totally so [112:36] listeners we are a grown-up podcast now [112:40] and we do things like get real quotes [112:41] from customers as a part of segments [112:43] like this so here's what Blue Sky CTO [112:46] had to say Blue Sky collects a lot of [112:48] feedback from users but stat it gave us [112:50] concrete answers about what was working [112:52] and what wasn't we thought that we [112:54] didn't have the resources for an AB [112:55] testing framework but stat Sig made it [112:57] achievable for a small team it remains [112:59] our best tool for evaluating product [113:01] decisions so good if you want to [113:03] leverage stat Sig to grow your business [113:05] there's a bunch of ways to get started [113:07] stat Sig has an insanely generous free [113:09] tier for small companies a startup [113:12] program with 1 billion free events which [113:14] is $50,000 in value and significant [113:17] discounts for Enterprise customers to [113:19] get started just go to stat.com that's [113:21] St [113:23] tsi.com [113:24] Acquired and remember to tell them that [113:26] Ben and David sent you all right David [113:29] M&M's let's do it hell yeah let's do it [113:32] I'm gonna eat some dark chocolate and [113:34] some almond M&M's to celebrate oh nice I [113:37] think I'm gonna pop a peanut butter okay [113:41] so the legend is that the reason peanut [113:44] butter M&M's are not as big as what you [113:46] would think their Market potential is in [113:47] the US is because Forest Jr and John [113:50] Mars the sons of far a senior who would [113:53] take over and then launch peanut butter [113:55] M&M's they grew up in England so they [113:58] didn't get the peanut butter and [113:59] chocolate [114:00] thing is that like a uniquely American [114:03] yeah it's an American thing fascinating [114:06] Reese's kind of invented it and there's [114:08] a whole great reesei story Reese's was a [114:10] separate company from Hershey that was [114:12] built down the road and I think it was a [114:13] former Hershey employee former Hershey [114:15] employee started it and then Hershey's [114:18] later acquired the company great story [114:20] yep anyway here we are in August of [114:25] 1939 forest and the family have moved [114:27] back to America he's ready to hatch his [114:30] plan his revenge campaign and he goes [114:34] and pays a visit to Hershey Pennsylvania [114:38] and by pays a visit in typical Forest [114:41] fashion I mean that he shows up there [114:44] anonymously and unannounced and he signs [114:47] up and does the public factory tour so [114:50] awesome so Forest so freaking [114:54] awesome after the tour is over however [114:57] he asks the tour guide if he could [115:00] please go see Mr William Murray William [115:04] Murray of course being the president of [115:06] Hershey and Milton Hershey's longtime [115:09] number two president and coo type but [115:12] the guy who actually ran the company [115:14] Milton by this point is like very much [115:16] focused on the town and the orphanage [115:17] and the Hershey trust and all that and [115:20] the gist here is I need to buy some [115:21] chocolate [115:23] well let's keep telling the story so the [115:26] guy's like uh excuse me who are you and [115:29] uh why do you want to see Mr Murray to [115:31] which Forest replies just tell him Mars [115:34] is here that's all he needs to know [115:36] because at this point while Hershey was [115:38] still a supplier to Chicago Mars they [115:41] were really starting to be a competitor [115:43] they're starting to wake up to this idea [115:45] that yeah we're selling these other [115:46] people chocolate but they could just go [115:48] eat all of our market share yes they're [115:50] starting to wake up to that but if this [115:52] story is true Forest is saying tell [115:55] Murray that Mars is here obviously the [115:57] implication being Chicago Mars is here [116:00] which is totally not true right because [116:02] his father's passed at this point so the [116:04] Mars that it probably is is whoever is [116:06] running the Mars company right it's [116:08] Ethel number two's half brother who is [116:11] installed running the company either way [116:14] forest does get in to see William Murray [116:17] and Murray has never met Forest before [116:19] but of course knows who he is once [116:21] Forest uces himself and where's like um [116:25] great okay you're back in the US what [116:28] can I do for you Forest then proceeds to [116:31] theatrically remove a handkerchief from [116:34] his pocket and place it down on Murray's [116:36] desk and he opens up the handkerchief [116:39] and there inside are Dr candy coated [116:44] chocolates this is so Steve Jobs so [116:47] steip it's amazing drama it's amazing uh [116:51] farest is like try one so Murray does [116:54] and he's like yeah it's pretty good [116:57] Forest says what if I told you that I [116:59] have had these candies in my pocket all [117:03] the way on the trip here from New York [117:06] the whole train ride all the time [117:08] outside in this hot muggy August weather [117:12] all through the factory tour and not [117:15] once did they ever melt in fact how do [117:17] they taste do they taste melted they [117:18] don't taste melted do they and Mar's [117:21] like oh all right you've got my [117:23] attention so forest and William Murray [117:26] work out a deal to start a new joint [117:30] venture candy company that will be 80% [117:34] owned by Forest and 20% owned by [117:38] Murray's son Bruce and Forest says I've [117:41] even got the name for it we're going to [117:43] call it Mars and Murray M&M's and it's a [117:46] new company that's what's worth noting [117:48] here well several things are worth [117:50] noting obviously for is totally [117:53] brilliant this is probably his most [117:57] brilliant scheme on so many levels he [118:01] knows that if he's going to build a new [118:03] candy company come back to the US take [118:07] on and defeat his father's old company [118:09] in Mars he's going to need resources [118:13] he's going to need chocolate which means [118:14] he's going to need Hershey's chocolate [118:16] yep and he's also going to need capital [118:18] and money he just can't get that much [118:19] Capital out of his UK businesses [118:21] remember the tax [118:23] so there's a reason though that he [118:25] specifically goes to Murray to make this [118:28] proposal not to Milton hershy a Murray [118:31] is kind of the COO type he's actually [118:33] running the place and can Marshal [118:35] resources but even more important Murray [118:38] doesn't own Hershey he's just an [118:40] employee the Hershey trust owns Hershey [118:44] Murray has no inheritance to give his [118:47] family he's now at this point I think [118:49] Murray is 66 years old so Mars isad Ling [118:52] something he wants Forest is offering [118:55] Murray the chance to have wealth and a [118:58] legacy and a business to pass on to his [119:02] son do you know what else Bruce Murray [119:04] had access to the military yep [119:07] purchasing division yes okay we will get [119:09] into that it's so brilliant so this deal [119:14] is nuts because Hershey has an exclusive [119:18] arrangement to supply chocolate to the [119:20] US Military the exclusive agreement and [119:24] Forest Mars has this thing that God if [119:26] you think the military liked count lines [119:28] they're going to love these non-melt [119:31] candy-coated chocolates and so he is [119:34] going to the person who has the sole [119:38] ability to provide the military with [119:39] chocolate and saying let's start a new [119:41] company together with your chocolate [119:43] that is rationed for the war in World [119:45] War II for the military we're only [119:47] goingon to sell this to the government [119:50] I'm gonna own 80% of it your son's going [119:52] to own only 20% of it I'm showing up [119:54] with just the idea and Hershey's going [119:56] to provide the chocolate the sugar and [119:58] the technical expertise and capital yep [120:02] and it's going to be an 8020 deal I [120:04] don't understand how this deal got done [120:06] well what else is Murray GNA do if he [120:09] wants a legacy to pass on to his son [120:11] Murray's not going to go off and do this [120:13] himself that would be disloyalty to [120:16] Hershey and in fact I would guess it's [120:18] to avoid a conflict of interest for [120:22] Marie himself to say my partner is [120:24] actually your son not you yeah so his [120:26] employment contract isn't in violation [120:28] and he's only a 20% owner blah blah blah [120:31] yeah when you think about if Forest were [120:33] to go to William Murray and say Hey you [120:35] and me enter into a partnership that's [120:37] at least going to be 50/50 if not 8020 [120:39] Murray to Mars but by saying no your son [120:43] yeah he's just so freaking brilliant [120:46] what a g yeah so Murray agrees to this [120:51] and in the spring of 1940 forest and [120:54] Bruce Murray the sun set up Eminem [120:57] limited as a partnership they build a [120:59] factory in New York New Jersey and they [121:01] start production in [121:03] 1941 Ben as you say build a factory with [121:06] Hershey capital and resources and [121:09] chocolate and sugar and everything else [121:11] yeah and there's a great quote in the [121:13] Cadbury book about how amazing it is [121:15] that this is how forest makes his return [121:17] to the US the line is without the [121:19] support of his own family but with the [121:21] support of his leading rival Hershey yep [121:24] it is spooky it's like you want to say [121:27] diabolical but like I don't think Forest [121:29] is diabolical per se it's just truly [121:31] genius it's just strategic yeah so of [121:35] course now what else happens in 1941 [121:38] right as they set up the factory and [121:39] start production the US enters World War [121:42] II which means significant chocolate [121:46] rationing for all the consumers in [121:48] America and significant chocolate [121:51] consumption [121:52] by the military so all of a sudden the [121:55] US military becomes Hershey's biggest [121:58] customer just like during World War I [122:01] which means and Hershey's is the only [122:04] one with a chocolate contract and the [122:05] only one producing milk chocolate at [122:08] significant scale In America which means [122:10] that they start severely limiting their [122:12] wholesale chocolate Supply to all of [122:15] their Enterprise customers like Chicago [122:19] Mars or actually they limit their [122:22] chocolate Supply to all of their [122:23] wholesale Enterprise customers except [122:25] for one Eminem limited partnership [122:29] because of course it's Bruce Murray's [122:32] company yep sort of in minority yes 20% [122:37] of it is Bruce Murray's company now of [122:40] course just like Hershey the vast [122:42] majority of young Eminem limited [122:44] Partnerships production is also going to [122:48] the military so the Air Force was the [122:50] biggest customer of mm during World War [122:52] II the Army was number two I presume the [122:55] Navy was probably also a large customer [122:58] and like we've been talking about who [123:01] has the chocolate sales relationship [123:04] with the purchasing officers in the [123:06] Pentagon it's William Murray at [123:08] Hershey's and Bruce gets to tag right [123:11] along and as head of sales in the new [123:14] Eminem limited partnership he is [123:16] perfectly positioned to do that it's so [123:18] funny head of sales there's one customer [123:20] yes they're not selling it to the public [123:22] yet no there's three customers there's [123:23] the Army and the Air Force and the Navy [123:26] okay yeah they're not selling it to the [123:27] public yet or in any sort of real valuee [123:30] now there's an interesting little [123:32] sidebar to the M&M's story here and I [123:36] suspect many of our British friends are [123:38] listening to all this and saying like [123:40] hey guys what about Smarties Forest of [123:43] course was not the only one to spot the [123:46] potential of dra chocolates for military [123:49] use and then eventually for public [123:52] consumption well like all things with [123:55] Forest history it's a little bit hard to [123:57] untangle truth from fiction but one [123:59] thing that is undeniably true is that [124:02] round trees introduced Smarties to the [124:06] British Market in 1937 so 3 to four [124:09] years before M&M start up in the US and [124:12] two years before Forest even leaves the [124:14] UK right so he's saying it's this [124:17] Spanish American war or a thing but very [124:19] plausibly he just saw smarty in the UK [124:22] and was like I got to go back to America [124:23] and launch this quick there is no way [124:26] that Forest did not see Smarties in the [124:29] UK before he left and the early M&M's [124:33] came in tube packaging just like [124:36] Smarties suspicious also for the [124:39] American listeners you're probably like [124:40] Smarties those are a non-chocolate candy [124:42] what are you talking about those are [124:43] different Smarties that that are in the [124:45] US market yes British Smarties are [124:47] delicious I loved eating them growing up [124:50] with my British family when I would go [124:51] visit them in the [124:53] Summers well as best as I think anyone [124:57] can tell apparently there is some [125:00] documentation about this in the Nestle [125:04] archives apparently forest and George [125:09] Harris of Round Tree had both learned [125:12] about draes around the same time so [125:15] during the Spanish Civil War and [125:17] supposedly they negotiated a gentleman's [125:20] agreement that round could have the [125:23] British market for Dr candies and Forest [125:28] who was at this point in time starting [125:30] to plan to go back to the US anyway he [125:33] could have the American market and in [125:35] return Forest supposedly gave Round Tree [125:38] the rights to manufacture and Market [125:41] Mars Bars in other British Commonwealth [125:45] countries like Canada and South [125:48] Africa so supposedly there's evidence to [125:52] this effect in the Nestle archives but [125:54] we can't know for sure regardless none [125:57] of this really matters at least for a [125:58] few years because basically all of the [126:01] world's chocolate production is going to [126:03] Sovereign militaries around the world [126:05] that are all fighting in World War II [126:07] okay meanwhile during the war as M&M's [126:12] is starting up and the US military is a [126:14] big customer and Forest is sort of [126:17] rebuilding his Empire in America he's on [126:19] the lookout for his chappies equivalent [126:23] to bring into the US you talking about [126:25] rice time to talk about rice another [126:28] business that can provide you know [126:29] diversification and cash and resources [126:32] to build up the candy business this is [126:35] so crazy he owns a British company that [126:38] makes Mars Bars he bought the chapel [126:40] Brothers he started a new partnership in [126:42] the US a third business called Eminem [126:44] limited and now he's looking to start a [126:46] fourth company that makes rice yes in [126:49] Houston Texas so there are also as [126:53] always a couple versions of this story [126:55] but I think the one that is closest to [126:57] the truth is that back when Forest was [126:59] in England he had gotten to know a [127:02] chemist who had invented a new method [127:05] for Milling rice that was called par [127:07] boiling and when you par boil rice [127:09] through this new method it results in [127:11] more nutritious and importantly faster [127:14] cooking rice for when you ultimately [127:16] prepare it for eating and in [127:19] 1942 this chemist and Forest form [127:23] another joint venture company in Houston [127:26] Texas and they patent the method in [127:29] America and start producing rice to sell [127:33] just like M&M's to the military because [127:35] what's the military need a lot of cheap [127:37] calories rice and hey this is more [127:39] nutritious it cooks faster like great [127:42] great customer and this becomes Uncle [127:44] Ben's rice today Ben's [127:46] original the idea of launching a branded [127:49] rice product in America was crazy I mean [127:54] it's not as crazy as like the Pet Food [127:55] business but there were no brands in the [127:59] rice category before Uncle B you just [128:02] bought rice it's a commodity so this is [128:04] the first brand at least in rice ever [128:07] launched in America fast forward today [128:10] Ben's original does over a billion [128:13] dollars in Revenue annually crazy [128:17] listeners you can tell all these did [128:19] become one company at some point but at [128:21] first they weren't right it was all [128:23] these puzzle pieces that forest was [128:25] assembling so back to [128:27] M&M's after the war forest and Bruce [128:31] Murray of course now need to find new [128:33] customers for M&M's they're going to [128:35] relaunch it as a consumer candy like [128:38] obviously that was the plan use the [128:39] military bootstrap up the production [128:41] Hershey's resources but like obviously [128:43] this is going to be a consumer candy so [128:46] yeah it's crazy basically 5 years elaps [128:49] between when they founded the company [128:51] and when they are able to actually do [128:52] the consumer launch because of World War [128:53] II yep and you would think great what [128:56] potential for the consumer Market all [128:58] the soldiers and Pilots have been eating [129:00] these all war it's going to be the same [129:02] story as Hershey's bars all over again [129:05] it's going to make M&M's be Forest big [129:08] success coming back to [129:10] America nope consumer launch pretty [129:14] tepid doesn't get a lot of pickup back [129:18] with consumers in America for years for [129:22] years this of course as you would [129:25] imagine creates quite a lot of tension [129:27] between forest and Bruce especially [129:30] because Bruce was in charge of sales and [129:32] Bruce had been great at sales when he's [129:34] selling to the [129:36] military selling the consumers not so [129:38] much so did you hear about what [129:39] supposedly Forest did to Bruce here no [129:43] oh my gosh so the story is as sales are [129:48] not going well Forest orders Bruce [129:52] to produce a daily report of the past [129:56] days sales of M&M's in a written form to [129:59] him every morning in the office and [130:01] every morning where the previous days [130:04] sales did not hit Forest Target he would [130:07] write in big letters in red ink failed [130:10] on the paper and then he would go tape [130:12] it up in the men's bathroom in the [130:16] company we've obviously been very [130:18] laudatory of forest and he was [130:19] incredible incredible genius the dude [130:22] also had a temper to match his genius is [130:25] he trying to get Bruce to leave the [130:27] company at this point or is he just [130:29] trying to motivate him well yes so [130:32] here's the thing you know you read about [130:34] lots of people who worked for forest and [130:36] lots of accounts in emperor of chocolate [130:38] and elsewhere about his temper and how [130:40] awful he was and he clearly was awful [130:43] he's also doing things for reason he's [130:46] trying to get Bruce to leave the company [130:48] he's trying to push him out cuz he wants [130:49] to own M&M's 100 % so in [130:53] 1949 four years after the end of the war [130:56] and midling sales at Best of E&M Forest [131:00] finally succeeds in pushing Bruce out [131:03] and supposedly it comes down to a [131:05] confrontation one day where Bruce is [131:07] like I can't take it anymore with Forest [131:09] how you're treating me you know posting [131:11] these reports in the men's bathroom [131:13] supposedly they get into a literal fist [131:15] fight in the office in New Jersey Forest [131:19] kicks Bruce out of the plant has you [131:21] know security or whatever come and take [131:23] him out and Forest is his boss I mean [131:25] this guy owns 20% but Forest is the CEO [131:27] it's not he can take his shares but he [131:29] can fire him exactly so Bruce resigns [131:33] and then once Bruce resigns after this [131:36] this starts the negotiations of forest [131:38] buying out his 20% stake they settle on [131:42] $1 million for the 20% stake so they're [131:45] valuing the M&M's business at $5 [131:48] million which you know this is 1949 so [131:51] if you adjust for inflation in $ [131:53] 2024 that would be like valuing the [131:56] business at 65 million and buying Bruce [131:59] out for 13 million so you know $13 [132:03] million payout you know in today's [132:05] dollars for Bruce to walk away for a [132:07] company that like it's not clear it's [132:09] going to catch with consumers right [132:11] exactly okay you worked on it for well [132:14] it's nine years of work yeah it's nine [132:16] years of work so like you know I think [132:19] you could really debate yeah the [132:21] valuation there in both sides certainly [132:25] M&M were not yet [132:27] M&M [132:29] but in fact they hadn't even started [132:32] having the M's printed on them yet no [132:34] they hadn't as soon as Forest completes [132:37] the purchase and kicks Bruce out of the [132:40] company takes 100% ownership he goes in [132:42] 1950 and hires the Ad Agency Ted Bates [132:46] and Company to perform a comprehensive [132:48] Market study for the product this is [132:51] also another genius Innovation on [132:53] forest's part so other big Diversified [132:57] cpg companies like Proctor and Gamble [132:59] they were starting to do the [133:02] sophisticated kind of market research [133:04] here like we're talking about you know [133:05] the legendary Proctor and Gamble product [133:08] management function this was starting to [133:11] happen but nobody in the candy industry [133:14] did this like the candy industry still [133:16] operated SE to the pants Frank Mars type [133:19] entrepreneurial stuff [133:21] this is emblematic of the industry [133:25] Hershey had a strict policy of not [133:29] advertising at all no advertising [133:32] whatsoever they did not do any [133:34] advertising until 1970 that's so insane [133:38] which is absolutely freaking insane they [133:40] didn't have sales targets either right [133:42] the story about sales targets and [133:45] revenue growth Targets in Hershey was [133:47] that in some file card in some system [133:50] Milton Hershey had had written grow [133:52] sales 4% every year and that was the [133:54] plan that was Hershey's annual plan was [133:57] grow sales [133:59] 4% yeah I will say it is pretty [134:02] incredible how much from here on out the [134:05] story is a story of AD campaigns we are [134:08] getting from a place where before this [134:10] it was all product Innovation and from [134:12] here on out it's marketing Innovation [134:15] like who won chocolate between [134:18] 1950 and 202 for is a story of marketing [134:22] and distribution yes 100% marketing and [134:25] distribution and you say ad agencies I [134:27] don't want listeners to get the sense [134:29] that oh it's just ad agencies that are [134:31] doing this and it's advertising it [134:32] really is the discipline of marketing of [134:35] which ad agencies I think were a lot [134:37] more consultative in this function back [134:39] in the day than today they're much more [134:42] execution oriented really this is like [134:44] the creation of the modern marketing [134:48] discipline yeah so the Ted bats agency [134:52] goes off they do this product study [134:56] Market study of who do M&M's appeal to [135:01] and they find that actually M&M's are [135:04] super appealing to kids now this is [135:07] interesting the candy industry had [135:09] obviously started as a kid's Market but [135:11] by this point in time it's an adults [135:13] Market everybody's marketing to adults [135:15] that's where everybody thinks the market [135:17] is and M&M's and Smarties Etc this had [135:21] started as food for soldiers so they [135:23] were focusing on the adult Market turns [135:25] out kids love the little pieces and the [135:27] bright colors etc etc here's the problem [135:31] though kids don't buy the candy the [135:33] parents buy the candy so you got to mark [135:35] it to the parents to buy them for the [135:38] kids [135:40] exactly so they need to come up with [135:42] some way to get that message across to [135:46] the parents and this is where frankly [135:49] I'm going to think just like one of the [135:51] most brilliant slogans and AD campaigns [135:54] of all time is Born the milk chocolate [135:57] that melts in your mouth not in your [136:00] hand and it's become like water these [136:04] days everybody knows that [136:06] slogan what makes it so effective I [136:09] think is it just so gets at the very [136:13] very very core of the psychology of [136:16] being a parent of candy age eating [136:19] children m M and the core truth that it [136:25] gets at is yeah you want your kids to be [136:28] happy but really what you want is for [136:33] your kids not to cause chaos in your [136:37] home David how do you know all this [136:39] information I'm just reading about this [136:41] and thinking I'm like oh my God [136:43] imagining myself as apparent in you know [136:45] 1950 1951 when this comes out the last [136:49] thing in the world I want is my snotty [136:51] nodes kids running around the house [136:54] smearing chocolate all over the [136:56] furniture all over the walls all over [136:59] everything which also is the last thing [137:01] that I want as a parent in 2024 yep and [137:04] now here is this message being delivered [137:06] to me of make your kids happy get them [137:10] to stop whining give them the chocolate [137:12] that they so desire and it will not ruin [137:16] your furniture and your house it's [137:18] perfect yep they of course back up the [137:22] parent marketing with also sponsoring [137:26] the most popular kids television shows [137:28] of the day the Mickey Mouse Club and the [137:30] howdy Duty television [137:32] shows and boy does it work by 1956 so [137:37] they start this campaign and call it [137:40] 5051 so 5 years later M&M's have become [137:45] the biggest selling candy in all of [137:48] America doing over $40 million in annual [137:52] sales and growing super fast bigger than [137:56] stickers bigger than Milky Way bigger [137:58] than the Hershey's bar incredible wow [138:02] five years from basically zero to $40 [138:04] million in sales they're just crushing [138:07] it and they're starting to get worried [138:08] about copycat so they start adding the [138:10] little m's actually they were black at [138:12] first and then in 1954 they transitioned [138:15] it to white and they ran a second ad [138:17] campaign telling consumers look for the [138:19] M on every piece to verify the [138:21] authenticity so they're saying that [138:23] we're building IP here we're not just [138:25] making candy we are building a frame of [138:30] mind and a Nostalgia point and a trust [138:33] with consumers yep and of course today I [138:36] say as a pop some M&M's into my mouth [138:38] M&M's are not just a kids candy kids [138:40] still love them but adults love them too [138:42] but it's back to this Nostalgia thing [138:44] like everybody today who is an adult [138:47] eating M&M's grew up eating them as kids [138:50] yep [138:52] 1954 there's the first TV commercial [138:54] featuring The Animated M&M's characters [138:57] obviously different than the ones you [138:58] know today which are computer animated [139:00] but very cute [139:02] handdrawn uh actually a few different [139:04] versions of them but pretty consistent [139:06] concept all the way from then till now [139:07] the personalities changed a little bit [139:09] but these personified M&M's that have [139:11] witty stuff to say is there pretty early [139:14] yep totally speaking of copycats M&M's [139:18] were so successful that Hershey's [139:21] really was getting worried David as you [139:23] said it became the better selling candy [139:24] than Hershey's bars so Hershey's [139:28] launched something called Hershey ETS [139:30] and we'll link to it in the show notes [139:32] it's fun looking at the old marketing [139:34] for this failed product the biggest [139:36] issue with marketing hersheyettes is [139:38] people would say what is it and in order [139:40] to say what it is you had to say they're [139:42] like M&M's which that's a tough [139:45] marketing position to be in I mean you [139:47] nailed it earlier when you said being [139:48] first to Market is really important and [139:50] in markets where it is important to be [139:52] first to Market getting scale quickly so [139:55] you become the product of record or of [139:56] reference when people are trying to [139:58] describe the category M&M's was that to [140:00] a te totally totally was Hershey's would [140:04] then later as a part of the rees's [140:06] franchise try to do Reese's Pieces [140:09] actually there's a fun story around that [140:10] that we will talk about a little bit [140:12] later but here in 1954 land there's just [140:15] a lot of fun dialing in happening of all [140:18] the marketing the peanut m m launched [140:21] but first only in tan they then realized [140:24] what are we doing that we need to change [140:25] this so in 1960 they added yellow red [140:28] and green right around the same time in [140:31] 1955 TV started becoming a real factor [140:35] in Americans homes and it was just [140:37] perfect timing I mean it was a match [140:38] made in heaven for these candy companies [140:41] to utilize and create demand for their [140:43] products after the war if you wanted a [140:45] brief moment of emotion for your brand [140:47] with a quick tagline a TV commercial is [140:50] just custom made for that and Deborah [140:52] Cadbury puts it really well she says one [140:54] great TV campaign could shift Decades of [140:56] Customer Loyalty in a matter of weeks [140:59] especially in a new category like candy [141:02] coated chocolates yep 1955 Mars also [141:05] gets into the vending machine business [141:08] interestingly over in England they start [141:10] this business called vend pack which [141:12] created the earliest vending machines [141:13] they eventually sold this off in 2006 [141:16] but they had built coin mechanisms and [141:19] Bill validators I think they were like [141:21] the market share leader in how to read [141:23] bills in vending machines all across the [141:25] world yeah they also got into change [141:28] makers like you know you put bills in [141:30] and you get coins out oh interesting [141:32] yeah so speaking of Empire minded at [141:36] this point Forest Empire is pretty much [141:38] complete he's got the most popular candy [141:42] bar in the UK with the Mars Bar Mars's [141:45] European operations have become very [141:47] very large in and of themselves I think [141:50] they had started making their own [141:51] chocolate instead of buying from Cadbury [141:53] by this point I think that's right I [141:54] think they had transitioned or were [141:56] transitioning to making their own [141:57] chocolate in the US obviously he's got [142:00] M&M's which are now the number one candy [142:03] in the US he's crushing it there he's [142:06] got the biggest and pretty much the only [142:08] Pet Food business in the entire world [142:11] he's also got the biggest and only [142:13] branded rice business all told all of [142:17] his sets of companies I believe here now [142:19] in the call it mid to late 1950s are [142:22] doing like 200 million-ish in Revenue so [142:26] a big [142:27] Empire however there are two things that [142:31] he still doesn't have one of course is [142:35] his father's company Mars Inc Chicago [142:37] Mars and he owns what 10ish perent [142:40] around this point but he doesn't control [142:42] the company and then two of course is [142:45] fully separating himself from Hershey's [142:48] and controlling all the means of [142:50] production for all of his American [142:51] businesses and making his own chocolate [142:54] in America right CU if Hershey's cut him [142:57] off M&M's would be screwed he has a big [142:59] liability there now of course hercus [143:01] doesn't want to do that because then [143:02] they'd lose a whole lot of business [143:04] they'd lose their biggest customer yeah [143:06] exactly and probably also knowing forest [143:10] was strategic when he chose to push [143:14] Bruce out of the business because I [143:15] believe William Murray had already [143:17] retired from her at that point it would [143:21] be like Forest to plan all that out to a [143:23] te yeah anyway like I said at this point [143:27] Forest Empire is doing call it 200 [143:30] million-ish of Revenue annually around [143:32] the world and Chicago Mars had about 50 [143:36] million of Revenue so Forest is call it [143:38] four times the size of Chicago Mars now [143:41] when Frank Mars's dad had died the [143:44] majority of the company went to his [143:47] second wife Ethel it's about 2/3 I think [143:50] that that she gets and then there was [143:51] onethird that had gone to random other [143:53] shareholders over time many of which [143:55] were employees I think yep I think [143:56] that's right and I think maybe forest [143:59] and Patricia got like some small Stakes [144:01] at that point in time okay and Ethel [144:03] like we said installed her half brother [144:05] William running the company Ethel dies [144:09] in 1945 and when that happens her stock [144:13] gets split 50/50 between Patricia and [144:17] Forest per Frank's original will had 2/3 [144:21] 1/3 goes to Patricia 1/3 goes to Forest [144:25] as we get on into the 1950s and Forest [144:28] has now turned M&M's into a big success [144:32] he starts turning his attention to [144:34] Chicago Mars so he goes to the board and [144:36] he says hey I own a third of this [144:39] business I think I should have an office [144:42] at the company and a right to come in [144:46] and inspect the operations whenever I [144:47] want I think they were like sure this [144:50] seems like an easy demand to give this [144:53] guy like whatever we'll make an office [144:54] for him there's a fox that wants to hang [144:57] out in our Hen House is there anything [144:59] anybody sees that's an issue here now [145:00] just build him an office clearly they [145:02] did not know Forest very well because he [145:05] shows up I think he basically like [145:07] relocates to Chicago and is like coming [145:09] in every day he's spending a ton of time [145:12] he's criticizing everywhere he starts [145:14] writing memos to the board about [145:17] everything that is wrong at the company [145:20] all all the big mistakes that William is [145:21] making as CEO and why William should be [145:24] fired and Forest should take over this [145:26] is not so different than how Elon ended [145:29] up owning Twitter yeah yeah it actually [145:33] is very similar oh I'm just a 5% [145:35] position oh I should be on the board oh [145:37] I have recommendations yeah before you [145:39] know it this is exactly the same way oh [145:44] boy still though William and Patricia [145:47] and the rest of the management isn't [145:49] going to get on board with selling to [145:51] Forest or letting him take over and in [145:54] fact in [145:56] 1959 William retires as CEO Forest [146:00] figures like okay great this is my [146:01] chance he starts lobbying Patricia he's [146:04] lobbying everyone else who owns the [146:06] company all the management saying like [146:08] great sell to me let me take over let me [146:10] run this business instead Patricia [146:14] decides to install her husband James who [146:18] had been working in the business [146:20] as CEO whether he was a good employee or [146:24] not he is a totally totally terrible CEO [146:28] of Mars Chicago so once he takes over in [146:32] 1959 Revenue drops from about 50 million [146:35] like we said to by 1963 it's down to [146:39] about 40 million so on the one hand okay [146:42] a 20% decline on the other hand this is [146:45] a very very high fixed cost business [146:48] yeah so a 20% decline in Revenue Vue on [146:50] a significant fixed cost base is [146:54] catastrophic that would be a huge huge [146:56] change in the negative Direction on your [146:58] return on total assets y it is a [147:01] disaster for the company now it's also a [147:05] very convenient disaster for Forest who [147:08] wants to pressure everybody else into [147:10] selling and being able to take things [147:12] over so finally as this is happening in [147:16] 1963 Forest flies to San Diego [147:20] where Patricia lives again to give you a [147:23] sense of James the husband here he's [147:25] commuting from San Diego to uh run this [147:27] business and they didn't have zoom then [147:30] no they didn't and it's a manufacturing [147:32] business so yeah anyway Forest finally [147:35] convinces Patricia to sell he says like [147:37] look if we don't do something here this [147:39] company's going to go bankrupt I can [147:40] save it I will take it over I will run [147:42] it she says okay I will finally agree on [147:46] two conditions one you have to promise [147:49] me that you will not not fire James my [147:51] husband he can remain a CEO farest is [147:55] like okay are we putting that in writing [147:58] or for how long and condition number two [148:02] you need to promise me that you will [148:04] make this company our father's company [148:07] Mars Incorporated the new parent company [148:10] of all of your businesses and preserve [148:12] our father's Legacy and he says sure [148:14] done which is probably what he wanted [148:17] anyway totally it's also his name and so [148:20] is it that different if left absorbs [148:21] right or right absorbs left and if [148:23] you're the controlling shareholder of [148:25] both no it doesn't matter yes not yet [148:29] CEO so Patty sells out in 1963 Forest [148:35] now owns two-thirds of the business he [148:37] spends the next few months going around [148:39] to all the other shareholders of the [148:41] business again mostly current and former [148:43] management and buying out their shares [148:46] and by mid 1964 he has full control of [148:49] mar Incorporated which by the way is 20 [148:53] years after Ethel dies that's how long [148:55] he has been on this quest to get full [148:57] control of the business right well and [148:59] really I mean going back to him leaving [149:01] for Europe like you have to imagine that [149:04] this was on his mind the whole time and [149:06] just as a like a side note here it's [149:09] pretty insane that Forest is able to out [149:12] of his pocket without external financing [149:15] go and buy up 2third of a business that [149:18] is doing 40 million a year in Revenue I [149:21] mean it's just because he owns M&M's and [149:25] Uncle Ben's rice and the UK businesses [149:28] this is not a strategy that most people [149:29] could run if they're like oh I wish I [149:31] was a larger shareholder of this [149:33] business that is large and dominant [149:36] right you need some other way to get the [149:37] money yes now it was a distressed [149:40] business at this point but like yeah [149:42] still I'm going to guess it's still [149:43] valued north of 40 million seems [149:46] reasonable he needs to come up with 25 [149:49] plus million in cash to pull this all [149:51] off yeah amazing so once he takes [149:55] control he comes to Chicago he [149:57] immediately rips out all the office [150:00] walls in the building open floor plan [150:02] for everybody he demolishes the [150:05] executive dining room he sells the [150:07] company art collection and the company [150:09] helicopter and he hands everybody [150:11] including James a time [150:16] card he may as well have walked in with [150:18] a sink he as well have walked the [150:22] seriously oh my God tragically later [150:26] that year Patty dies of cancer super [150:28] young I don't think she was even 50 [150:29] years old yet and once that happens [150:32] forest fires James and makes himself CEO [150:36] of the entire Empire all United finally [150:40] under Mars Incorporated you know I read [150:43] this story and I thought of the Darth [150:45] Vader quote I am altering the deal pray [150:48] I don't alter it any further [150:50] yes [150:52] yes [150:54] oh now I'm not 100% sure he may have [150:59] kept James still employed in the [151:01] business or something but yeah he was [151:03] out a CEO Forest is the captain now [151:08] yeah I am altering the deal pray I don't [151:11] alter it any [151:13] further so so so [151:16] great okay this now brings us to Forest [151:19] final Conquest which is making his own [151:21] chocolate in America and fully ditching [151:25] hery and we should say too at this point [151:27] he has completely overhauled the Chicago [151:30] Factory they're all in on mass [151:32] Productions these count lines are moving [151:34] at they used to make a Snickers bar in a [151:37] day and now they can do it in under an [151:39] hour I mean he's just going he's going [151:42] so his First Act of business once he [151:45] becomes CEO of Mars America is he call [151:50] Hershey up and he's like hello remember [151:52] me I'm the new CEO of Mars I just want [151:55] to let you know that we are going to [151:56] start phasing out our chocolate [151:58] purchases from you all and the way [151:59] Hershey reacts to this is what you would [152:02] be stupid to do that imagine how long it [152:04] would take you to pay back the [152:07] investment necessary to spin up your own [152:10] Chocolate Factory you would have to be [152:12] nuts to take on all that fixed cost we [152:15] have literally an entire town here that [152:18] is dedicated to making chocolate and we [152:20] are supplying it to you at a competitive [152:21] price yep so the Hershey's team [152:25] estimates that it'll be at least 10 [152:27] years before Mars turns profitable on [152:31] this decision to make their own [152:32] chocolate and okay so let's say he just [152:35] did it for control and he didn't think [152:37] the math would pencil which I don't [152:38] think is right but let's assume that [152:40] it's been 60 years since they made that [152:42] decision so I am sure they have reaped [152:44] plenty of benefits in operating leverage [152:47] on having their own plant versus needing [152:49] to pay all those extra little margin [152:50] dollars here and there to Hershey's [152:53] totally so Faris gives his Chicago plant [152:57] managers a deadline of six months to [153:00] start making their own chocolate in the [153:01] factory and I suspect they turn [153:03] profitable on this decision a lot faster [153:06] than 10 years out but there are [153:10] obviously other reasons that Forest is [153:11] doing this too one is the quality [153:13] principle which you know I really do [153:15] think the quality principle is number [153:17] one in Mars for a reason and if you [153:19] really are serious about wanting to [153:21] produce the highest quality products at [153:23] a given price you kind of need to [153:25] control all the means of production [153:28] yourself anyone who's serious about [153:30] software should make their own Hardware [153:32] yes yes Alan Kay for the win the other [153:37] reason that I think Forest always had [153:40] the dream of making his own chocolate is [153:43] to be able to scale as large as possible [153:47] like we've been saying all episode this [153:49] man so deeply knew in his bones how to [153:52] operate in a scale economies market and [153:56] by controlling all the production [153:59] himself that was just another step that [154:01] enabled him to scale as big as possible [154:04] I think in any cpg business it's a scale [154:07] economy's business but here we haven't [154:10] talked directly yet about how important [154:15] shelf space is for candy yes I was about [154:19] to bring up supermarkets yes so for [154:22] candy especially it really is a zero sum [154:26] game 90% 90 of all candy purchases are [154:32] impulse purchases only 10% of candy [154:35] purchases are planned purchases so I [154:38] found that it was 70% and the place that [154:40] I found it was from this is flashing [154:42] forward a little bit some 1979 consumer [154:45] market research that Mars commissioned [154:48] and what they did with that information [154:50] was they launched an allout initiative [154:53] to Lobby Merchants to put candy displays [154:56] near the cash registers which didn't [154:58] happen until that point in history and [154:59] is now ubiquitous ah interesting so it [155:02] may indeed be 90% now in part because of [155:06] those efforts by Mars yes they were like [155:09] how do we lean into the idea that 70% in [155:12] 1979 of our candy is purchased on an [155:14] Impulse basis wow I didn't realize that [155:17] I thought that candy had always been by [155:19] the cash registers it wasn't until this [155:21] Mars initiative in 1979 maybe in smaller [155:24] shops but that's I think especially with [155:26] supermarkets when that changed [155:29] interesting interesting well so given [155:32] the impulse nature of purchases here I [155:35] mean it really is whatever candy is [155:38] right in front of your face tempting you [155:41] to buy is what you're going to buy and [155:44] so being the scale player being able to [155:48] have the muscle with retailers to push [155:51] Hershey's and other candy to the back of [155:53] the aisle or bottom of the Shelf makes [155:57] all the difference in the world here [155:59] there's another interaction with [156:02] supermarkets where the power actually [156:03] flows the opposite direction it's sort [156:06] of an aggregation Theory thing if you [156:08] think about the way that Merchants used [156:11] to work no one owned a lot of stores the [156:16] power was sort of diffuse among [156:19] retailers [156:20] and so if you were a candy maker and you [156:22] went to the local store in your town and [156:24] you said you want to buy my bar and [156:25] they'd say sure and they didn't really [156:28] have an ability to push back or bargain [156:31] they didn't have a lot of Leverage [156:32] supermarkets and especially chain [156:34] supermarkets made it so there was a [156:36] power concentration where the [156:37] supermarkets could go to the candy [156:39] manufacturers and say here's what we [156:41] want we want to Market a uniform set of [156:45] candy and a small number of SKS that [156:48] don't overwhelm us with inventory and we [156:51] want you to put a lot of marketing [156:54] behind those things that we're selling [156:56] and we're only going to stock them in [156:57] the store if you're really doing [156:59] marketing campaigns because television's [157:01] blowing up and we know that that moves [157:04] product in our stores so tell us [157:06] whatever you're going to do big [157:08] campaigns on and that's the Shelf space [157:09] that's going to get allotted yeah you're [157:12] totally right it's a shift in technology [157:14] with TV it's a shift in consumer [157:16] Behavior with supermarkets and what it [157:18] results in is massive returns to the [157:20] scale player and what's so frankly just [157:23] kind of sad is with the exception of [157:27] advertising Hershey had been benefiting [157:31] from this for its entire life as a [157:33] company I mean this really was Milton [157:35] Hershey's strategy from the get-go lower [157:38] prices get distribution go Nationwide [157:41] get shelf space get placement build a [157:44] big company he just didn't put his foot [157:45] on the gas exactly well and then after [157:48] his 10 and after Murray's tenure the [157:52] company basically became brain dead for [157:54] like three decades they don't do [157:57] advertising they don't have a marketing [157:59] department at all and it's not like you [158:01] know I mean Hermes doesn't have a [158:03] marketing department like Hershey really [158:05] didn't have a marketing department I [158:07] think it was one of these things where a [158:08] company internalizes a behavior because [158:12] it's always been that way and they say [158:14] well there's a rule and the rule is we [158:17] don't do advertising but that rule was [158:19] developed in a different time in a [158:21] different environment where the rule [158:23] made sense and now you're sort of [158:25] senselessly following a religion that is [158:28] no longer relevant in the new world y [158:31] you know we haven't talked yet about [158:32] Hershey's ownership structure so it was [158:35] and is a public company but the [158:37] controlling interest is owned by the [158:39] trust the management of the trust became [158:43] super super removed from the realities [158:46] of the business and the market and I [158:48] think that's how [158:50] this happened makes sense reflecting [158:53] back on this period of time thinking [158:54] about Forest Mars This sort of was the [158:57] moment in world history for the global [159:00] scale economy's founder to rise if you [159:02] think about the early [159:04] 1910s you couldn't take advantage of [159:08] economies of scale in the way that you [159:12] sort of can now with the rise of [159:14] globalization there are things that [159:15] would have been non-economic before in [159:17] addressing these small Regional markets [159:19] but now that you're Distributing [159:21] everywhere and America is a huge Market [159:24] on its own finally and beyond that [159:27] International you sort of have the [159:29] potential for this personality type that [159:32] Forest Mars was to really succeed and [159:37] you can advertise and market and brand [159:40] nationally for the first time via [159:42] television and then in the coming [159:43] decades internationally yeah it's the [159:46] rise of the scale economies entrepreneur [159:48] I think is sort of a way to summarize is [159:49] it yep totally so now that Forest [159:54] finally has his own chocolate making [159:56] means of production how do they finally [160:00] knock off Hershey's well when Milton [160:04] introduced the Hershey chocolate bar in [160:05] 1900 as we've talked about all episode [160:07] he priced it at a nickel so that [160:09] everybody even in 1900 could afford it [160:12] the problem as we've been talking about [160:14] her's decades long brain deadness here [160:18] they kept the price out of nickel from [160:21] 1900 until November [160:24] 1969 what they never changed the price I [160:29] didn't realize it was that long almost [160:32] 70 years a hair's width from 70 years [160:36] they not once changed the price of the [160:40] chocolate bar and which you know it was [160:42] sacrosanct it was like it's the nickel [160:43] chocolate bar it's melon her's Legacy we [160:45] can't change the price so what did they [160:47] do how did they manage infl [160:50] they just kept shrinking the bar size I [160:53] got to say by the way that 5 cents in [160:55] 1900 just so people get a sense is 23 [160:57] cents in 1970 so it's a 4 and a2x that [161:01] they sort of have to figure out how to [161:03] handle yep so what do they do rather [161:06] than changing the price they change the [161:10] quantity they just keep shrinking and [161:12] shrinking and shrinking the size of the [161:15] bar consumers are going to love that oh [161:17] yeah they're going to love that so the [161:19] original Hershey's bar was 1.25 Oz 1 and [161:23] a/4 oun in 1900 by the time 1969 rolls [161:27] around it is half of the original weight [161:32] then I see you are looking at a Snickers [161:34] there how much is a Snickers today 1.86 [161:37] 1.86 now that's not all chocolate a lot [161:40] of the mass of that is cheaper stuff [161:42] like peanuts but you can see in the [161:44] consumer's mind you're like wait I've [161:45] got this paper thin Hershey's bar that [161:48] like yeah it's a nickel but compare that [161:51] to the big meaty [161:53] satisfying [161:55] Snickers this looks ridiculous consumers [161:58] don't care that the new gets cheaper [162:00] consumers care about I mean truly that [162:02] is why Snickers is the satisfied slogan [162:05] consumers care about how much value does [162:07] it seem like when I bite into this thing [162:09] and eat it yep so finally in 1969 [162:13] Hershey can hold out no longer commodity [162:16] prices Spike and they make the historic [162:19] decision to raise the price of the bar [162:21] to 10 [162:23] cents and they think that the way they [162:26] can make this palatable to Consumers is [162:29] they will also boost the size of the bar [162:32] back up to the original one and a qu [162:34] ounces so actually economically they're [162:36] still at a wash here both were about [162:38] double okay so it doesn't solve their [162:40] problem it's just totally brain dead the [162:43] problem is inflation and I think the [162:45] thought process probably was okay [162:48] consumers are going to be outraged when [162:50] we double the price of the bar after 70 [162:52] years oh the first time we raise the [162:55] price of the bar we should give them [162:56] some value so in the second time well [163:00] this is we not having a marketing [163:01] department or doing consumer surveys or [163:04] anything a way to communicate with [163:05] customers at all yeah turns out to be a [163:07] really big problem consumers are just [163:10] like what the hell ay you just raised [163:12] the price you doubled the price but B [163:15] you have just totally exposed that you [163:17] have been gaming us for 70 years I mean [163:20] this is literally still a big deal today [163:23] so much so that do you remember the [163:25] commercial that aired I think it was [163:27] during the Super Bowl from Joe Biden [163:30] talking about shrink flation oh no this [163:33] is like a presidential thing in our [163:35] country today where the president is [163:37] railing against shrink flation by [163:40] keeping prices the same and making cpg [163:43] food smaller amazing amazing so yeah I [163:47] believe that people were outraged by [163:49] people were pissed so Forest is like oh [163:54] man boy am I ever glad that I started my [163:57] own chocolate baking process [163:59] here because he now decides that in [164:01] response he is not only going to [164:04] increase his advertising and Blitz the [164:06] nation with M&M'S and Mars products he's [164:10] also going to increase the size of his [164:12] bars while keeping price the same and he [164:17] starts a price in size war with Hershey [164:22] now interestingly in response to this [164:24] Hershey counters by actually finally [164:28] starting to advertise for the first time [164:30] here in 1970s the first time in the [164:33] company's history that they advertise [164:35] and surprised it works great but because [164:38] commodity prices are staying high and [164:40] it's putting pressure on profits the [164:43] board pulls the plug on their [164:47] advertising because they say like oh [164:49] profits are down we can't be spending so [164:52] we need to stop [164:54] advertising so they do two years of [164:56] advertising it works great but profits [165:00] are down so they say nope we got to stop [165:02] that [165:03] unbelievable and as a result in [165:07] 1973 the combined Mars which is all of [165:10] the Legacy Mars Inc products Snickers [165:13] Milky Way Three Musketeers Etc plus [165:17] M&M's passes of Hershey to become the [165:20] number one candy company in America [165:22] there it is I don't think they ever [165:24] looked back well Hershey did eventually [165:28] retake the lead in America from Mars [165:31] much later but Mars is by far the [165:35] largest candy company globally like [165:36] Hershey is basically just in America and [165:39] I think Mars's American candy business [165:41] is about the size of Hershey's American [165:43] candy business today I think they're [165:45] kind of neck and neck but Mars has [165:47] everything else too yep [165:49] this game that you're talking about [165:50] David of the cat and mouse price war [165:53] game would continue and Mars would [165:55] basically have the advantage every time [165:57] because Hershey's primary thing they're [165:59] marketing is the chocolate bar which is [166:03] made of the densest most expensive thing [166:06] in the whole process and Mars just has a [166:09] durable competitive advantage in that [166:11] they're selling something to Consumers [166:12] that they value at the same price but [166:14] the cost of good sold is way lower I [166:17] mean it has nougat and peanuts and so [166:20] what they basically do there's another [166:23] time I think this happens in the early [166:24] 80s where Mars knows that the commodity [166:27] prices are on the uptick for Coco and so [166:30] it's going to squeeze everyone's margins [166:32] but it's going to hurt Hershey the most [166:34] so what is Mars do they announce bigger [166:36] bars at cheaper prices what can Hershey [166:39] do they're just getting boxed in from [166:41] all angles and so this is a sustainable [166:44] competitive advantage that Mars has [166:46] selling something that has just lower [166:49] cost of goods for a equal perception of [166:52] value to customers yep the other thing [166:55] that Mars builds up through the maybe [166:58] even starting in the 60s but definitely [167:00] in the 70s and 80s is a very very [167:03] sophisticated Commodities trading [167:05] Department that Hershey doesn't have oh [167:08] really of course they do hedging and of [167:11] course you know it's this very Mars [167:14] style to do this now obviously it's a [167:16] private company they never report any of [167:18] this but [167:19] rumors are these are rumors but heard it [167:22] from multiple places Mars has actually [167:25] made many billions of dollars of profit [167:28] from commodity trading over the years so [167:31] whereas for competitors like Hershey's [167:34] commodity spikes and prices are like a [167:37] big risk and impact to the business I'm [167:39] sure Hershey's hedging also these days [167:41] they are but like back in the 70s ' 80s [167:44] no no they wer Mars is actually [167:45] profiting hugely from Market swings in [167:48] commodity prices [167:49] wow total G total G So speaking of this [167:53] is incredible here we are [167:56] 1973 Mars passes Hershey to become the [168:00] number one candy company in America and [168:04] a pretty surprising twist happens here [168:06] in forest's [168:08] story which is the end he retires he [168:11] hangs it up he walks away and [168:13] concurrently with him deciding that's it [168:16] this is basically when the company stops [168:18] communic with the outside world so [168:20] everything we're about to share from [168:22] here on out is short is basically just [168:26] headlines that happen from news articles [168:28] and the company gets way way way more [168:30] private after this yeah end of [168:33] 1973 he's built up this whole empire [168:37] gone to Europe built the Europe business [168:39] built the pet business come back to [168:41] America built M&M's retaken over Mars [168:45] Inc battled Hershey beat them at their [168:48] own game he gives the company to his [168:51] three children a third each to Forest Jr [168:55] John Mars and Jackie Mars and totally [168:58] walks away and retires at this point the [169:01] Empire is doing about 800 million in [169:05] annual revenue and uh he's just done he [169:09] no longer owns any part of it for the [169:13] moment so Forest spends the rest of the [169:17] decade of the 70s [169:19] in retirement his mother the original [169:23] Ethel is actually still alive and I [169:26] think he spends a lot of it with her and [169:28] taking care of her and then after you [169:32] know call it six seven years he's [169:33] starting to get a little [169:36] feisty uh you know you can't keep an old [169:38] horse out to pasture here so in 1980 [169:42] when Forest is 76 years old he decides [169:46] he's getting back in the game he is his [169:48] father's son what's he going to do he's [169:50] going to start a candy company he's [169:52] going to start another candy company [169:56] which he names Ethel M Chocolates after [170:00] his dear Mother Ethel who of course he [170:02] considers the real Ethel Mars and [170:05] matriarch yep of the family by the way I [170:09] ate some ethm chocolates last night I I [170:10] ordered some to prep for this episode [170:12] they're great delicious I have never [170:14] tried any I need to get my hands on some [170:17] it's extremely different than the rest [170:18] of mar products it's like a specialty [170:20] chocolate yes well so Forest business [170:24] plan in starting llm is basically to [170:27] build a competitor to seiz oh that makes [170:29] sense he sees just like Warren and [170:32] Charlie did back in the day that seas [170:35] and high-end chocolate is actually a [170:37] really really good business and the plan [170:41] is the way they're going to compete with [170:43] c's is they are going to specialize in [170:46] liquor filled chocolates so they'll make [170:50] regular non-alcoholic chocolates you [170:51] know high-end chocolates just like Seas [170:53] Truffles and the like but they also will [170:55] specialize in alcohol filled chocolates [170:59] which were going through a moment of [171:01] popularity here in the go go 1980s so [171:06] Forest as always decides he's all in on [171:09] this liquor filled chocolates are not [171:12] legal in every state and Nevada is the [171:15] epicenter of them so he moves to Nevada [171:20] I did not realize that's why ethm is in [171:22] Nevada that's so funny that is why [171:25] ethelm is located in Henderson Nevada [171:28] which is a suburb just outside of Las [171:29] Vegas and Forest by God builds a factory [171:34] there outside of Las Vegas Builds an [171:37] apartment directly above the factory and [171:40] lives in the apartment above the factory [171:43] from which he runs the business guy has [171:46] one speed and one Playbook and this dude [171:50] is like in his late' [171:51] 70s it's a success within a couple years [171:55] llm is doing $150 million in Revenue [171:58] unbelievable like get out of here [172:02] unbelievable now as you said Ben it's [172:04] not competing with Mars in any way it's [172:06] competing with c's but the business gets [172:09] so big and Mars and fars children decide [172:14] that they want to own this business so [172:16] in [172:17] 1988 after Forest has been running it [172:19] for 7 eight years Mars acquires llm for [172:24] an undisclosed amount I would love to [172:28] have been a fly on the wall for those [172:29] negotiations between forest and his [172:31] children I mean what's the point of even [172:34] negotiating he's already given all of [172:37] Mars to the kids so what's he going to [172:38] do after the sale completes give the new [172:40] stake to the kids too unbelievable it is [172:43] like the best Koda [172:46] ever to the story sorry so shortly after [172:51] the llm acquisition is when Forest Jr [172:54] and John Mars the brothers who are [172:57] running Mars now as co-ceos this is when [172:59] they give Joel brener access and the [173:02] Washington Post access to write the [173:04] piece about the company but yeah Ben as [173:06] you say they weren't happy with it and [173:08] uh they never gave anyone access again [173:10] and today their [173:12] CEO does speak publicly like does give [173:16] quotes and statements they do release [173:17] press releases they have a website they [173:20] as a company have recognized that times [173:22] have changed that consumers are not [173:25] willing to go buy a product off the [173:26] shelf when they know nothing about the [173:28] company in this era of people wondering [173:31] about what is Mars doing with [173:32] sustainability and we live in an America [173:35] and a world right now where diabetes is [173:38] a massive epidemic and obviously they [173:39] make a lot of products that contribute [173:41] to that they want to have a voice in [173:43] that conversation too and so they do say [173:45] more now than they used to because [173:47] they've kind of realized realized we [173:49] can't be A50 billion company that [173:51] doesn't ever say anything ever true but [173:55] what they don't do is allow books to be [173:58] written about them or any sort of [174:00] in-depth piece no one knows what their [174:02] balance sheet looks like including their [174:04] Bankers they don't produce financial [174:06] statements for their Bankers yep and [174:08] some product stuff that happens in this [174:10] time in [174:11] 1974 they start producing Skittles in [174:13] the United States after it becomes a [174:15] success in the UK they bring twixs over [174:17] from the UK they bring Starburst over [174:20] which was opal fruits in the UK yep [174:23] 1986 Mars acquires calan Foods in Los [174:27] Angeles and begins its Association in [174:30] America with dogs cats and their owners [174:32] they've had the British business for a [174:34] long time calcan dog becomes pedigree [174:36] calcan cat becomes Whiskas or Whiskas [174:40] also in 1986 they acquire Dove Dove bars [174:43] and Dove chocolate yes they enter the [174:46] Frozen snack business and then later [174:49] launched Dove promises and Dove [174:51] chocolate bars on the brand so Dove was [174:54] a ice cream bar company when they bought [174:56] it and then they launched the chocolate [174:58] bars and chocolate pieces after having [175:02] acquired the company which I think works [175:03] reasonably well yeah I think so it's not [175:06] a huge business for them but it's their [175:08] direct Hershey bar competitor now of [175:11] like a direct competitor to kisses and [175:12] to the chocolate bar yep the really big [175:15] story though I think of the brothers [175:17] tenure and Jackie too as a third owner [175:19] of the business and eventually later she [175:20] does also work in the business herself [175:22] is globalization so during their tenure [175:26] by the time they hand the business over [175:28] to Professional Management in 2001 [175:31] they've grown it from you know that 800 [175:33] million when Forest left to 20 billion [175:36] in revenue and yes there are all those [175:38] Acquisitions and product launches we [175:40] just talked about but the big big thing [175:42] is going global the brothers take them [175:44] to Japan China Russia the Middle East [175:46] South America this is really fun in 1984 [175:49] they start sponsoring the Olympics and [175:51] they totally run the Visa Playbook this [175:53] is when they start unifying all the [175:55] product Brands globally Snickers is [175:58] Snickers everywhere and we can Market [176:00] globally they really do an amazing job [176:03] yeah and so the brothers took it from [176:05] 800 million to 20 billion yes over 28 [176:09] years I believe was their tenure a 25x [176:12] in 28 years it's almost like the Tim [176:14] Cook story too where it's the out years [176:16] of compounding and the glob ization end [176:19] up making the more recent story [176:22] numerically far more interesting than [176:24] the early story but the early story is [176:26] where the Maverick is I mean we told [176:28] this whole story about Forest senior [176:31] we're going to spend 10 minutes here on [176:32] the Next Generation and the Next [176:34] Generation took it from hundreds of [176:36] millions to 20 billion dollars yes a [176:39] year incredible now that said while [176:42] globalization was I'm sure a Herculean [176:45] task and required a lot of vision and [176:48] commitment to it from the brothers it [176:50] really was outside of the m&a was about [176:53] globalizing all the successful brands [176:56] that Forest had built yeah so speaking [176:58] of m&a and uh we were also talking about [177:01] seas and Warren and Charlie a minute ago [177:04] in 2008 Mars buys Wrigley with the help [177:09] of Uncle Warren and Uncle Charlie I love [177:12] that they come into this story it's the [177:13] best I know there's some amazing quotes [177:17] from Warren at the time of the deal one [177:19] of them's like I've been conducting a [177:21] 70-year taste test on both Mars and [177:23] Wrigley and uh they both passed the [177:26] test oh it's so good cuz you know the [177:29] analysis is actually far deeper than [177:30] that but that also totally sells it's [177:33] Warren's Personality yeah he actually is [177:35] a really insightful quote in the 2011 [177:37] Berkshire shareholder letter while they [177:39] were still a shareholder in Wrigley ASMR [177:42] subsidiary he says quote buy Commodities [177:45] sell brands has long been formula for [177:48] business success it has produced [177:51] enormous and sustained profits for [177:53] Coca-Cola since 1886 and Wrigley since [177:56] 1891 he doesn't say this but like [177:58] obviously this is the Mars Formula 2 [178:02] Sell Commodities by Brands uh buy [178:05] commodity sell Brands oh not as an [178:07] investor yeah not as an investor [178:10] companies that buy raw products and then [178:12] sell them as a branded product basically [178:15] you're allowed to create margin yes the [178:17] mar Market is giving you the right [178:19] consumers are giving you the right to do [178:20] that yes it's funny if you flip it and [178:23] you say sell Commodities buy Brands [178:25] that's a good mentality for an [178:26] investment portfolio yes definitely in [178:29] fact I thought that's what he meant I [178:31] want to buy this because it's a durable [178:32] brand or House of Brands interesting [178:35] yeah no no as the operating Paradigm for [178:37] a company of purchasing raw Commodities [178:40] and selling them as branded products [178:42] right if you have cocoa beans backed up [178:44] to one side of your Factory and then [178:46] stickers bars coming out the other it's [178:47] a good buiness business yeah you're [178:48] going to do good interesting so it goes [178:52] down in the middle of the financial [178:53] crisis they announce the deal in April [178:57] 2008 but it closes in October 2008 like [179:01] right after Leman collapses Mars buys [179:05] the Wrigley company for $23 billion [179:09] which is a 28% premium to where it was [179:11] trading that day yep and even Mars at [179:14] this point in time doesn't have 23 [179:17] billion of cash on hand well they may [179:19] have but they didn't want to use it I'm [179:20] always trying to guess how much through [179:22] all these points in history I think Mars [179:24] piles up a lot of cash but I think [179:25] they're really conservative and how they [179:27] decide to deploy it I mean this is the [179:29] tradeoff with efficiency Freedom return [179:33] on total assets as the way that you're [179:35] going to manage is you're just going to [179:37] be very conservative in how you run the [179:39] company yeah but yeah so Mars pays 11 [179:42] billion doll itself they get $5.7 [179:45] billion in Bank debt from Goldman Sachs [179:48] and then Berkshire comes in with the [179:49] rest of the financing about $6.5 billion [179:53] do total and 4.4 billion of that was a [179:57] loan and then 2.1 billion is an [180:00] investment into the newly created [180:03] Wrigley subsidiary over time Wrigley [180:06] will use the profits from all their [180:08] businesses to buy out Berkshire and so [180:11] it must have been negotiated in that [180:13] Mars had the right over some period of [180:15] time to buy out that $2.1 billion Equity [180:17] investment indeed that is correct so [180:20] what happens 5 years later in [180:23] 2013 Mars repurchases the debt portion [180:28] of Brookshire's financing and man this [180:31] de God the financial crisis like Warren [180:34] was so good to be investing in such high [180:36] quality companies at the interest rates [180:38] that he got so the 4.4 billion in debt [180:43] that Berkshire invested had an [180:46] 11.45% interest [180:48] oh my God so during the 5 years that it [180:51] was outstanding Burkshire earned $2.5 [180:54] billion just in [180:57] interest now when Mars bought it back in [180:59] 2013 that was before the debt matured so [181:03] they had to pay Warren a premium to buy [181:06] it back early they paid a $680 million [181:11] premium so all told for the $4.5 billion [181:15] debt investment Brookshire gets its [181:17] money back plus another call it 3.1 3.2 [181:22] billion just on the debt over five years [181:24] over 5 years now the equity portion the [181:28] 2.1 billion in [181:31] 2016 Mars buys out Berkshire so Buffett [181:35] sells Mars his entire stake back for [181:39] $4.6 billion versus the 2.1 that he [181:42] originally invested he more than doubled [181:45] the money in 5 years on that in add to [181:48] almost doubling the money on the debt [181:50] even better for Warren because that [181:53] Equity that he held was preferred Equity [181:56] it also had a dividend associated with [181:59] it of which they likely made another [182:03] billion dollars in dividends on the [182:06] preferred Equity it's interesting that [182:08] they did the bank debt from Goldman [182:09] Sachs and this dual instrument from [182:12] Berkshire yeah why not go all one or all [182:15] the other because you would think they [182:17] would have the option to [182:19] well I think this gets back to the value [182:24] that Warren and Berkshire always provide [182:26] but we're especially providing during [182:28] the financial crisis which is just the [182:31] reputational guarantee and solidity oh [182:35] you think getting Burkshire was what [182:38] they used to be able to pull in the Bank [182:40] debt I bet it helped pull in the Bank [182:42] debt cuz I doubt Mars had significant [182:45] banking relationships going into this [182:47] cuz they didn't have any debt No in fact [182:49] they classically never do Acquisitions [182:53] with outside Banks they're obsessed with [182:55] using only their own cash yep and [182:58] Goldman was berkshire's Preferred Bank [183:02] so probably pull Goldman in the other [183:04] aspect to this is the Wrigley [183:08] shareholders you had to give confidence [183:10] to the Wrigley shareholders to vote for [183:12] the deal to get it done and so having [183:16] Buffett come in you know put his stamp [183:18] of approval calm everybody down even in [183:21] the midst of all the craziness with [183:23] Leman I suspect there's no way the deal [183:25] gets done if Berkshire doesn't get [183:27] involved that's really interesting given [183:30] what was happening in October 2008 wow [183:33] all told Berkshire puts in 6 and A5 [183:36] billion and about doubles its money in [183:39] the whole eight years so 5 years on the [183:42] debt and then another few years on the [183:44] equity how much did Goldman make on the [183:47] deal I doubt that much right definitely [183:51] Burkshire got some sort of premium for [183:54] using their reputation in this deal yep [183:56] now interestingly we didn't dive super [183:58] deep on Wrigley as a company but is a [184:00] very good business probably I'm guessing [184:03] even better than the candy business [184:06] because gum I [184:08] believe is mostly a petroleum byproduct [184:14] is it really yeah so for a long time I [184:16] don't know if this is still true Good [184:18] Year the tire company yeah was one of [184:20] Wrigley's major [184:21] suppliers and it was like unused [184:23] byproducts from petroleum us that if you [184:27] can brand that and sell it to Consumers [184:29] you're going to have pretty good margins [184:31] so Wrigley I went back and looked at [184:33] their old 10ks before Mars acquired them [184:35] they had about 50% gross margins and 20% [184:39] net income margins in the last you know [184:42] sort of decade of the company pretty [184:44] good for a business like that not bad [184:47] not bad at all they also owned mints [184:50] like Altoids and Lifesavers that's the [184:53] other big part of the business right if [184:56] chocolate is a expensive product to make [184:59] gum is a not expensive product to [185:02] make yep okay other things that happened [185:06] in the 2000s they bought a significant [185:08] stake in the Banfield Pet Hospital chain [185:11] which is the largest chain of pet [185:14] hospitals in America and was started in [185:17] part parip with PetSmart that's right [185:19] cuz most of them are actually in [185:20] PetSmarts yes that partnership is now [185:23] ended and Mar is now owns Banfield [185:27] outright 100% And I believe in 2007 they [185:30] took a large stake and then in 2015 they [185:34] fully bought out petmart for 100% [185:36] ownership that's interesting it is worth [185:38] noting we did some slight of hand there [185:41] that's a completely different business [185:43] pet hospitals than dog food related in [185:47] pet care you can use the pet hospitals [185:50] as channel for your dog food but very [185:54] different type of operation that needs [185:56] to be performed yeah this really is the [185:59] big story about Mars of the last 10 [186:02] years so after they fully acquired [186:04] Banfield in 2017 they acquired VCA which [186:08] is even bigger right yes they were the [186:10] largest independent vet hospital [186:13] operator in America for 9 billion so [186:17] like large acquisition and Ben like you [186:19] say you know there's two interesting [186:22] things about getting into this business [186:26] one it's a super different business [186:28] we're talking about a Services business [186:30] like this is not manufacturing y so very [186:33] very very different DNA I think a big [186:36] part of the strategy though like you [186:38] said about distribution of pet food in [186:43] 2002 Mars had bought a French pet food [186:47] company called royal Kanan or I've also [186:50] heard it pronounced Royal [186:52] Canan and Royal Kanan makes prescription [186:56] pet food like especially for like an [186:58] aging dog or a Mobility Challenge Dog [187:02] and as dogs became more and more family [187:06] members and people started caring for [187:09] them more and more like humans [187:10] prescription pet food became a really [187:12] really big business so I think Royal [187:14] Canan was like a grand slay acquisition [187:17] for the company and I think that's [187:20] partially what led them to then get [187:21] involved with Banfield and BCA of like [187:23] oh well let's consolidate a lot of the [187:27] distribution and value chain here in [187:29] this prescription Pet Food business [187:32] pretty interesting I mean it's a very [187:34] different business but they run so [187:36] decentralized that it's probably okay [187:39] that it's a Services business and you're [187:41] not having people who are making candy [187:43] trying to run a Veterinary Clinic it's a [187:46] pretty small head office [187:48] and it's a very [187:49] decentralized operation I think the [187:51] decision- making Authority really rests [187:53] with the board still but these [187:55] independent operating groups are [187:58] independent operating groups yep I'll [188:00] pull a Playbook theme forward which is [188:03] that this company obviously grows [188:05] through inorganic Acquisitions so in [188:08] buying Wrigley Royal Canan VCA All these [188:11] Mars itself Mars itself they've kind of [188:14] overpaid on a price to earnings basis I [188:17] mean Wrigley was a 35x and a 27% premium [188:20] over the public valuation Royal Canin [188:22] was a [188:24] 39x but if you kind of think about [188:27] especially with Banfield pets hospitals [188:29] they really understood what they were [188:31] buying so they were able to underwrite [188:33] better than anyone else and I think this [188:36] is very similar to the idea that ham [188:38] shared with us way back in our 2021 [188:41] episode which is multiples are kind of a [188:43] blunt instrument used for valuation when [188:45] you don't actually deeply know and [188:48] understand the business and when you do [188:50] you can just underwrite better than [188:51] everyone else and you have more margin [188:53] of safety in the price that you are [188:55] willing to pay than the rest of the [188:56] market does so when they want to come in [188:58] over the top at a 35x for Wrigley maybe [189:02] they know more about Wrigley than other [189:04] biders do interesting yeah or at least [189:07] the case on Banfield was we've owned [189:08] pieces of this business over and over [189:10] and so now that we've amassed a minority [189:12] share we feel good about buying a [189:14] majority share yep I totally buy it are [189:17] from worldly Partners had a good comment [189:19] to me about this that they shoot bullets [189:21] not cannonballs and when you sort of see [189:23] that in an acquisition strategy you [189:25] should be careful not to judge too [189:28] harshly when people overpay for things [189:30] because they're taking these little baby [189:31] steps to try and understand first and [189:32] maybe they know something you don't yep [189:35] speaking of they ran this Playbook again [189:39] with their most recently completed big [189:43] acquisition of kbar yes 5 billion [189:47] in 2020 after buying a small piece of it [189:50] a few years earlier and then buying the [189:52] rest of it in 2020 I didn't realize how [189:55] big kind was kind was doing one A5 [189:58] billion in Revenue I believe almost [190:01] completely domestically in America yeah [190:04] and Mars took it Global and Mars took it [190:05] Global yeah so I think that has been a [190:07] big success for the company as well do [190:08] you know how they grew so big [190:09] domestically oh I don't Starbucks ah [190:14] makes sense checkout counters at [190:15] Starbucks impulse purchase yeah there [190:17] you go there you go and it fits with [190:19] Starbucks brand ethos it's like healthy [190:21] honestly I eat them all the time it's a [190:23] 5 gram of sugar bar that's super [190:25] satisfying that doesn't leave my teeth [190:27] feeling gross or make me feel like I ate [190:29] something with a bunch of unnatural [190:30] ingredients I know it's still a candy [190:32] bar but it's a 5 gram of sugar candy bar [190:34] so I think as far as Mars thinking about [190:37] gez we want some sort of diversification [190:39] hedge if people stop eating candy bars [190:42] they're on a good Trend there which [190:44] leads us to the final piece of the story [190:49] maybe which is the biggest deal that the [190:52] company has ever done yep or is [190:55] attempting to do so in August Mars [190:57] announced that they have entered a [191:00] definitive agreement with Kellen NOA to [191:02] purchase the company for $ [191:04] 35.9 [191:06] billion so what is Kell NOA right yeah [191:09] as we were researching this and getting [191:10] into this I was like Mars is paying $ 36 [191:13] billion what is kova it's like mandes [191:16] you're like o what's mandelas that [191:18] sounds interesting in forign and you're [191:19] like oh it's craft it's like a weird [191:21] corner of craft yeah so Kenova do I have [191:24] this right is Kelloggs minus the [191:27] American cereal business that is correct [191:30] so it's all the snack businesses and [191:32] international cereal so the snacks are [191:34] like Rice Krispy Treats Pringles eggs [191:37] Pop-Tarts RX bar which is going to be [191:39] interesting that they'll own RX bar and [191:41] kind bar it is the largest cpg [191:43] transaction since the merger between [191:46] craft and Hines in 2015 and so another [191:50] birk Hathaway special I mean if you [191:53] think about it the family is worth 117 [191:56] billion today which essentially means [191:58] the company's worth 117 billion which is [192:01] kind of interesting it's a $50 billion [192:03] company that at least Forbes I think [192:05] it's Forbes pegs it at 117 billion of [192:08] Enterprise value of course there's no [192:10] Market to buy these shares so who knows [192:12] how to Value it really right and when [192:14] you say $50 billion company that's their [192:16] annual RIS Revenue annual revenue y so [192:19] they have started reporting in recent [192:20] years or at least alluding to what the [192:23] Topline Revenue number is yes that's [192:25] correct they're going to get a lot [192:27] bigger I guess is the takeaway from this [192:28] if they're worth 117 billion now and [192:31] they're using a bunch of their cash and [192:34] presumably some outside leverage we'll [192:36] have to see for a$ [192:38] 35.9 billion acquisition that's a big [192:41] size up that is transformative yes it [192:45] also basically makes [192:48] them look like Nestle yeah which Nestle [192:50] has been the real competition for years [192:53] now and Nestle's huge they're over a [192:56] hundred billion dollar in revenue and [192:58] they're extremely Diversified extremely [193:00] Diversified yes which obviously again [193:03] Mars has always been Diversified but [193:05] nowhere near the extent that Nestle is [193:08] and now with the kinova acquisition [193:10] they're going to look a lot more like [193:12] Nestle and Mars is going to be selling [193:14] uh I just looked it up investment grade [193:16] bonds to help with its planned sale of [193:19] Kenova so they are raising some outside [193:21] capital for that not just using their [193:23] cash interesting interesting so that [193:25] brings us to today David we were just [193:27] talking about it in 2021 they did 45 [193:30] billion in Revenue 2022 was 47 2023 was [193:33] 50 and to your point they're now saying [193:35] over 50 here's the interesting thing [193:38] that we have been hiding from listeners [193:40] the whole episode and I know you've been [193:42] dying to say Mars snacking did $18 [193:46] billion in Revenue that is a segment of [193:48] their business that includes all the [193:50] candy so we've told this whole story all [193:54] about the smaller piece of the business [193:57] you'll notice 18 is not only a smaller [194:00] number than 50 it's less than half of 50 [194:02] yeah Pet Care is actually the bigger [194:05] business 59% of Revenue comes from the [194:09] Pet Care segment and of their 140,000 [194:12] employees almost 100,000 work in petare [194:15] y of course services business they own [194:18] thousands of hospitals yep so we don't [194:21] know the margin of the pet hospitals [194:24] versus the dog food versus the candy [194:27] specifically about Mars we can probably [194:28] look at industry comparables to try to [194:30] understand that but at least on a [194:32] Topline basis and an employee basis Pet [194:34] Care is the dominant component of this [194:36] business if you want a little bit of a [194:39] hint the new CEO in 2022 came from their [194:43] Pet Care Division in many ways they are [194:46] a pet food company that also makes candy [194:49] and always has been I mean if you look [194:52] back it was the year after Forest Mars [194:54] founded the UK division is when they [194:57] bought the first dog food which was [194:58] almost immediately cash generative [195:01] totally that's like the biggest aha [195:03] moment to me is they've been doing this [195:05] the whole time other than the veterinary [195:07] services that is again new so you might [195:09] be wondering well how significant of the [195:13] market of vets do they own Mars owns [195:16] 3,000 locations out of 35 to 40,000 vets [195:20] in the US so that's like 8% of vets [195:23] they're not just exploring vets they're [195:26] I don't know the largest or one of the [195:28] few largest player in vets in the entire [195:30] country I think they are the largest [195:33] there are other vet rollup plays it's [195:35] been a darling of search funds and [195:37] private equity in the last decade is [195:39] Veterinary rollups Dental rollups you [195:42] know stuff like that yeah looking at the [195:45] market at least in the US Mars and [195:47] Hershey each have about 24% market share [195:51] of candy and Confections and no one else [195:53] even comes close it's the Hershey and [195:55] Mars Show here domestically [195:57] internationally it's kind of a different [195:59] story it is a very fragmented industry [196:03] Mars is the whale with 11% but the next [196:06] highest are 7% and 5% and only a third [196:10] of the market is made up by the top five [196:12] companies Mars mandes Ferrero Hershey [196:15] and Nestle so 2third of International [196:18] candy and Confections is made up by [196:20] smaller companies and that is even after [196:22] all these mergers from the last few [196:24] decades so there's still this huge [196:26] International longtail of candy [196:28] companies wow because there's already [196:30] been huge consolidation yeah so that is [196:34] the shape of the business today you've [196:35] got a pet business masquerading as a uh [196:39] candy business and uh we continued to [196:43] perpetrate that [196:44] narrative yes now obviously the pet [196:47] business huge bigger in revenue and I'm [196:49] sure very very large in profits as well [196:52] I don't know I'm just purely speculating [196:54] but I [196:56] suspect profit contribution wise they're [196:59] at least equal if not bigger on the [197:01] candy side oh man I could be totally [197:03] wrong I don't know I don't know the [197:04] economics of pet hospitals yeah I would [197:08] love to know that if your last name is [197:09] Mars please reach out or join us in the [197:11] slack acquire. FMS slack we'd love to [197:15] hear from you yeah power power so this [197:19] is segment we do in analysis in every [197:21] episode based on Hamilton helmer's [197:23] excellent seven Powers book and [197:25] framework and the idea is that there are [197:28] seven ways that a business can [197:30] sustainably generate significantly more [197:33] profit than its closest competitors and [197:36] those seven ways are through counter [197:38] positioning scale economies Network [197:40] economies switching costs process power [197:44] branding and cornered resources [197:47] we have spent a lot of this episode [197:49] talking about the biggest and most [197:51] obvious one here in scale economies [197:54] actually like a lot of the businesses we [197:55] study on this show scale economies is [197:57] the biggest deal it is actually kind of [197:59] crazy it's almost always scale economies [198:01] is a big part of it I think for the [198:03] biggest businesses in the world it's [198:05] these businesses that operate at high [198:07] gross margin in very large markets where [198:11] you basically can build out a massive [198:14] massive fixed cost base and then [198:17] have great operating leverage can you [198:19] amortize your high margin sales in huge [198:24] volume across a comparatively small [198:27] fixed cost base manufacturing businesses [198:29] are like that software businesses are [198:31] like that cloud computing is like that [198:33] exactly and the businesses that get the [198:35] biggest tend to benefit from this [198:37] principle totally okay scale economies [198:40] check done so there's a thing I want to [198:42] bring up with you and this has been a [198:44] debate in the acquired slack I don't [198:46] know if you've seen it at all around [198:48] branding so the classic definition of [198:51] branding and I need to reread seven [198:52] powers to refresh myself on this but the [198:55] idea is if I show you two products side [198:59] by side that are identical but one is [199:00] branded will you pay me more money for [199:04] the one with the better brand you know [199:06] the Tiffany Ring versus the unbranded [199:08] ring yep I think there's another way [199:11] that branding shows up okay we said that [199:16] Ikea doesn't have brand power last [199:18] episode that's obviously not true it [199:21] might be technically true in that they [199:23] don't take margin because of their but [199:26] they have to deploy their Brand Power in [199:28] another way in the same way that Mars I [199:31] don't think charges more for a Snickers [199:34] than a different candy bar Mars doesn't [199:37] take price in the form of brand but they [199:39] do something else there's Brand Power [199:41] here for sure consumers pick Snickers [199:43] over unbranded random unsafe untrusted [199:46] candy bar definitely I think it's got to [199:49] be a version of our Costco episode scale [199:51] economy shared Brand Power shared there [199:54] was someone in the slack that pointed [199:56] out that this brand power could [199:58] translate to volume essentially if you [200:01] trust the brand more and the prices are [200:03] the same you just buy more of it over [200:05] time so you give more absolute margin [200:08] dollars to that company over time [200:10] especially in a reoccurring purchase [200:12] business like this that's the way that [200:14] brand power acures it's not in margin [200:18] percentage it's in total lifetime margin [200:20] dollars I totally buy that so by that [200:23] definition they absolutely have branding [200:25] yep I've got one I want to talk about [200:27] I'm curious if any of the other set jump [200:30] off the page to you H I think the candy [200:35] industry used to have cornered resources [200:36] I don't really think it does anymore [200:38] same with process power I'm not [200:39] convinced that [200:40] anyone's actually developed a superior [200:44] way to make something that is not known [200:46] by others in the industry I think Mars [200:49] has always had the best technology and [200:51] the best equipment and the best [200:52] resources there's actually great stories [200:54] about Forest perhaps both himself but [200:57] also through employees and outside firms [200:59] he'd hire would come up with all these [201:01] technical improvements to the [201:03] manufacturing equipment but they would [201:04] never patent it because he didn't want [201:06] to tip off any competitors makes total [201:08] sense keep it trade secret y totally uh [201:10] no none of the others jump off the page [201:12] to me so obviously we did not do a deep [201:16] dive on the pet business despite it [201:18] being the larger [201:19] business I think though the main power [201:22] in the pet business is switching costs [201:25] oh if your dog doesn't have problems [201:28] with its current food you're never [201:29] changing to another food yes well [201:31] there's a couple Dimensions one you're [201:34] never going to change to another food [201:35] because it's going to cause digestive [201:36] issues for a while like imagine if you [201:38] only ate one food for years and years of [201:41] your life and then all of a sudden you [201:43] started eating what are we doing we [201:44] should be feeding them table scraps so [201:46] they get a well rounded diet just like [201:47] the 30s exactly [201:50] exactly I mean it happens dogs switch [201:53] food all the time but it's not like [201:55] humans choosing to eat something else [201:56] it's a process right but then pet [201:59] hospitals like vets like huge huge [202:02] switching cost so I actually think this [202:05] is like the primary power in the [202:06] business on the pet side yeah I think [202:08] that's right okay that's power should we [202:11] do Playbook yes the first one that I [202:14] have is that you actually can build a [202:18] durable sustainable business through [202:21] great marketing not just great product [202:24] and this makes me uncomfortable as [202:26] someone who kind of doesn't want to [202:28] believe that who always believes the [202:29] best product wins I mean on the meta [202:31] episode The takeaway was their growth [202:34] came from product and not from marketing [202:36] on this episode I kind of feel like it's [202:37] the opposite the whole thing is the [202:39] story of marketing campaigns and how [202:42] whoever had the better message for [202:45] America at that moment I mean at least [202:48] post [202:49] 1960 was able to lean on that after the [202:53] Advent of Television yeah and of course [202:56] paired with distribution paired with [202:58] grocery stores paired with actually [203:01] let's talk about the ET [203:02] thing yes let's talk about the ET thing [203:05] this is really fun so in the late 1970s [203:11] early 1980s when Spielberg is making ET [203:15] the movie ET he's written into the [203:18] script that ET is going to be lured into [203:22] the house by a trail of M&M's and [203:24] anybody who remembers the details of the [203:26] movie remembers that it is not M&M's and [203:30] M&M's passed on the opportunity because [203:32] it had to come with a guaranteed million [203:34] dollars of co-marketing consumer [203:37] promotion trade promotions displays [203:39] featuring ET Mars was not down to do [203:43] that with the M&M's characters and [203:45] passed on the opportunity if you saw the [203:47] movie there's a pretty memorable moment [203:50] where it's Reese's Pieces Yep this was [203:54] relatively early in the brother's tenure [203:57] so I wonder a if Forest would have made [204:01] a different decision and also B if the [204:03] brothers would have made a different [204:04] decision had they had a little more [204:06] confidence in their own Security in [204:09] their own place as CEOs so I think there [204:12] was a timing element to this Hershey [204:15] almost passed too someone had to [204:16] basically go bang down the door and say [204:18] I'll actually pledge a million dollars [204:20] from my budget that I was going to use [204:21] for other stuff to use for this instead [204:24] so Hershey leadership was also going to [204:25] pass on it yeah I mean this was one of [204:28] if not the biggest deal up until this [204:31] point for product placement yeah it was [204:33] a paradigm setting deal and it worked in [204:36] a huge way multiple sources cite that it [204:39] 3x the sales of Reese's Pieces when this [204:42] came out and Reese's Pieces they [204:44] launched it a year before had done well [204:46] initially it kind of fell off and then [204:48] they were trying to use this to hey [204:50] maybe we can Galvanize sales and I think [204:51] it tripled Reese's piece of sales for a [204:53] while and then It ultimately everyone [204:56] knows Reese's Pieces are not M&M's [204:58] they're good but they're never going to [204:59] be competitive with M&Ms but at least in [205:02] my experience I haven't been to a movie [205:03] theater much lately but I believe there [205:06] is a lasting Legacy of this which is [205:08] Reese's Pieces are a main stay at movie [205:11] theater concession stand and it's all [205:13] because of this totally so so maybe the [205:17] takeaway is actually M&M's are a better [205:20] product and Reese's Pieces are sort of [205:22] this specialty Niche product and that's [205:24] why they don't have the market share and [205:25] maybe that this whole postulate is wrong [205:27] that marketing can create durable Brands [205:30] and the reason why all these Snickers [205:32] and Milky Way and M&M's are victorious [205:36] is because they're just better products [205:38] well I think they're good products but I [205:39] think it's like the Nostalgia element is [205:41] just so huge right they're somewhat [205:43] commodity products or it could have been [205:45] either product and then it was about who [205:47] could create a better lifetime story [205:49] over the story of your life about the [205:51] associations you have with that product [205:52] yep I think the candy industry is much [205:55] like the luxury industry in that once [205:58] you have an established product and [206:00] product brand it is impossible to kill [206:03] it you just can't I mean all the fumbles [206:07] that Hershey had for decades and decades [206:10] still today what is a chocolate bar in [206:12] America it's a Hershey bar you just [206:14] can't kill it that's so true true and [206:17] let's flip back to the Mars side of the [206:19] world the associations that they have [206:21] leaned into with the brands that people [206:24] love it's a very Disney like Playbook [206:27] that M&M's has run in fact they operate [206:30] a M&M store in Disney World or in [206:33] Disneyland I can't remember which one [206:35] but they associate with the holidays [206:37] they've got that commercial where the [206:39] two M&M's characters come in the house [206:41] Santa's just come down the chimney run [206:43] into them at the Christmas tree they do [206:45] exist so great I mean it's a classic [206:47] they've run it every year for 20 years [206:50] or something I think it started in the [206:52] 9s yeah the Rolling Stones they've [206:55] associated with for Snickers they had [206:57] the I Can't Get No Satisfaction ad [207:00] obviously the Olympics I mean I'm [207:01] looking at my Snickers bar right now the [207:03] only other logo on it that is not [207:05] Snickers is the NFL I mean they find [207:09] ways to associate with national or [207:11] Global Premier brands that everyone [207:13] loves that you have Nostalgia for in [207:15] fact NASA they went up on I think it was [207:19] the Space Shuttle NASA can't obviously [207:22] endorse because it's a government agency [207:23] but it's on the menu and it's a part of [207:26] all the astronaut videos you watch where [207:27] they're popping M&M's up and having fun [207:30] trying to chase them around the cabin [207:32] and zero gravity it's been a strategy [207:35] for Mars to chase known loved Universal [207:40] brands well sounds like we've learned a [207:43] lot here at acquired from the Mars [207:45] Playbook yep another one just like the [207:48] Innovation on commercials think about [207:50] how long they've had those computer [207:52] generated M&M's characters I looked it [207:54] up the first one I could find was in [207:57] 1994 Jurassic Park was in '93 and that [208:01] was effectively the first use of [208:03] computer generated 3D modeling in cinema [208:06] that's right within one year they were [208:08] running commercials with those [208:10] characters yeah wow they know how to [208:14] create these durable marketing [208:17] franchises and moments in some ways it's [208:19] actually shocking that they missed ET [208:21] given how good they've been in all these [208:24] other facets and ultimately the ET [208:26] thing's a fun story but did missing it [208:29] really hurt them not really not in the [208:30] long run no my last one around this is [208:35] in this sort of marketing world do you [208:37] remember in 1995 when they said they [208:39] were going to do away with the tan M&M's [208:41] yes do you remember anything about that [208:44] is that when they were replacing when [208:46] there was a vote right of which color to [208:48] replace it with and blue won [208:51] absolutely genius total genius they [208:55] needed to spice it up because basically [208:57] it was boring and does it cost them [208:59] anything or does it have any impact on [209:01] their business if they change the color [209:02] of one to something else no do they [209:03] actually care what it is no but they got [209:06] millions and millions of Americans to [209:09] call 1 1800 fun color which by the way I [209:12] called yesterday oh amazing is no longer [209:15] in service [209:16] you call 1 1800 fun color to vote so [209:20] they're giving everyone this like vested [209:21] interest in what the new color is blue [209:24] wins blue replaces tan they lit up the [209:28] Empire State Building after announcing [209:30] it was blue with blue genius so great [209:33] this is like the Facebook [209:35] internationalization where they have [209:38] local people in each market translate [209:40] and then they feel ownership over the [209:42] product yeah yes totally all right [209:44] that's all I got on their cons super [209:46] marketing I'm sure you read too mars is [209:49] constantly rebalancing the ratios of [209:51] colors in &m bags to suit current tastes [209:55] yes it's amazing yeah it's not even I [209:58] was shocked I was like looking at the [209:59] bag trying to I'm not going to go count [210:01] but apparently it's a secret what the [210:03] ratios are but I think they're adjusting [210:05] it constantly interesting I believe that [210:10] okay next one I've got is be a Recession [210:13] Proof business I thought candy was the [210:16] one I was talking about and the deeper I [210:17] got into the research I realized nope [210:19] pet pet food is one too people don't [210:21] stop buying candy when times are bad and [210:23] they certainly don't stop feeding their [210:24] pets especially now in this era where we [210:26] consider pets part of our families and I [210:29] think the data shows it if you look back [210:30] at 2008 neither of their businesses took [210:33] a hit from being in that recession and [210:35] that's an awesome business to be in if [210:37] you can get it yep a coraly to being [210:40] Recession Proof is being Universal a [210:43] survey done by the food Institute says [210:45] that 98 % of households buy candy every [210:48] year and of those [210:50] 97% are reoccurring purchases at an [210:54] average of 35 times a year wo wow again [210:58] good good business if you can get it [210:59] it's just like our Starbucks episode 2 [211:01] sugar is an addictive habit so all the [211:03] research I don't know it seems like [211:05] sugar is way worse for our bodies than [211:07] coffee I'm not at all worried that I'm [211:09] addicted to coffee I'm pretty worried [211:11] that I am addicted to sugar in fact I [211:13] feel pretty crappy after eating all [211:15] these M&M and Snickers I probably ate [211:17] more than a recommended amount cuz we've [211:18] been sitting here for 5 and a half hours [211:20] doing this but that's probably the most [211:22] concerning thing about the whole [211:23] business is they're extremely [211:25] participatory in the increase of sugar [211:27] consumption among Americans and around [211:29] the world and that it's very good for [211:31] their business at least their original [211:33] Core Business if we eat more sugar so I [211:37] can see why they're diversifying away [211:39] from those core franchises into kind and [211:42] Kenova etc etc yep more kind bars are uh [211:45] my future maybe some detox tomorrow all [211:48] that said no matter what happens I don't [211:51] think M&M's and Snickers they're not [211:54] going anywhere even if everyone starts [211:56] taking OIC I don't actually think [211:58] chocolate sales are going to fall in [212:00] fact all the numbers show to this point [212:02] everybody who's been saying oh people [212:04] are trying to eat healthier and they're [212:06] doing their very best and they're [212:07] changing their habits chocolate revenues [212:09] are still at an all-time high yep I [212:11] think this is a good place here in [212:12] Playbook there are a couple things about [212:14] chocolate that I want to talk about that [212:16] are more General than specific to Mars [212:19] one is just that chocolate I'm sort of [212:21] biased here because I love chocolate me [212:23] too same I loved doing this episode [212:25] because I love learning about chocolate [212:27] it really is a food part of that is [212:29] marketing and part of that is a hundred [212:30] years of Mars marketing and Hershey's [212:32] marketing and all that but really really [212:34] when you were describing the production [212:37] process of chocolate earlier in the [212:40] episode like it is one of the most [212:42] complex rich foods on the planet when [212:45] Milton her shut down and got out of the [212:47] caramels business he thought caramels is [212:49] a fat but chocolate is a complete food [212:52] chocolate is a food exactly and like he [212:54] was totally right I don't think [212:56] chocolate is going anywhere and the OIC [212:59] risk for chocolate is way lower far [213:02] lower than like gummy candies the other [213:05] aspect about chocolate though and I [213:06] think here is the right place to talk [213:08] about it is the industry and what [213:11] chocolate is is changing hugely I think [213:14] most people have no idea about this but [213:17] both the first and second order effects [213:19] of climate change are like massively [213:22] massively changing the chocolate [213:24] industry the cacao tree is a very very [213:29] sensitive tree it's this bizarre plant I [213:32] don't think we talked about this earlier [213:34] but the pods the fruit that have the [213:37] seeds and beans in them it grows [213:39] directly on the trunk of the tree [213:41] there's no like branches it's the [213:43] weirdest thing to look at it's like [213:44] these football siiz pods that just go [213:46] right off the trunk of the tree yeah and [213:48] that's something like only 25 years of [213:51] their full 10 and something year life [213:54] they actually can produce the fruit in a [213:57] way where you can use it to make [213:58] chocolate yeah so it's this super super [214:00] long lead time to get a tree to the [214:03] point where it's productive and it's a [214:05] really narrow temperature and climate [214:08] band that they can be growing in so as [214:12] both World consumption and thus [214:15] production of chocolate has increased [214:17] hugely over the past decades and climate [214:20] change is happening these trees are so [214:22] sensitive to it like it's really [214:24] impacted production that's the first [214:27] order effect on the industry the [214:29] arguably as bigger bigger is the second [214:31] order effect of how the industry has [214:33] responded so there's been huge efforts [214:37] over the last couple decades in genetic [214:40] engineering and hybridization and [214:42] breeding of cacao trees to optimize for [214:46] resiliency and output and production all [214:50] of which is good you know ensuring [214:52] continued production of chocolate as [214:53] long as it doesn't come at the expense [214:55] of taste right so that's the downside it [214:58] has not been optimizing for Taste either [215:01] preservation of the current taste or [215:03] just good taste in general so like [215:05] actually the taste of chocolate has [215:08] changed a lot in the last few years as [215:11] the plants themselves have been [215:13] engineered and changed a lot to more [215:16] resilient and productive yep exactly so [215:19] a lot of the real real richness and [215:23] complexity that has for thousands of [215:25] years made chocolate like a super [215:27] attractive food for humans is sort of in [215:30] danger of being lost or being watered [215:32] down I will say the industry is very [215:35] focused on this this is like a [215:39] existential super super important focus [215:42] of Mars in the entire chocolate industry [215:45] yeah that is the correct takeaway [215:46] whenever you talk to people in the [215:47] industry this is what they're talking [215:48] about yep all right I have got a couple [215:52] more the first one is conglomeration and [215:56] doing it well they very early on learned [215:59] how to acquire and conglomerate how to [216:01] do Acquisitions which parts to [216:03] centralize spoiler alert very few which [216:06] parts to decentralize actually most of [216:09] them when you are running two completely [216:11] different businesses and running two [216:13] completely different geographies from [216:15] the first five years of your company's [216:17] existence you end up actually developing [216:19] the muscle to do this well and so I [216:21] think it's very different than these [216:22] companies that later in life are like [216:23] we're going to get into XYZ Mars always [216:27] has been a diversified conglomerate and [216:29] they actually look a lot like lvmh in [216:32] that they aren't a private Equity Firm [216:34] they're a Buy and Hold I think they've [216:36] made 30 Acquisitions since the 9s and [216:40] they've only sold two things since 2015 [216:44] it's very Bernard are no style they also [216:47] don't Rebrand things they keep the [216:49] original Brands even in the Pet Hospital [216:52] business yeah that's super interesting [216:54] you think of anywhere where you would [216:56] want to centralize the brand it's like [216:58] no VCA Banfield they're separate yeah [217:00] it's super true and then my last one is [217:02] duration if you look at them over the [217:04] last 100 years they have grown Revenue [217:07] at a compound annual growth rate of 14% [217:10] for a century pretty good the question [217:14] sort of comes back to to what conditions [217:17] enable a business to grow like that for [217:21] that long it's Global applicability it's [217:24] the margin structure you're talking [217:26] about where you can take in Commodities [217:27] and spit out Brands it's the operational [217:30] efficiency of doing it it's the [217:32] reoccurring purchase that has a habitual [217:36] if not addictive component to it it's [217:39] the scale economies of being able to [217:42] achieve and maintain number one dominant [217:44] market share over many decade long [217:47] periods yep it's pretty amazing that [217:50] those things come together in a way that [217:51] make it possible to grow at 14% for a [217:54] century if executed well wild all right [217:57] David we are into the quintessence [218:00] quintessence listeners this is a new [218:02] thing that we added as we tried to [218:03] figure out how do we land the plane what [218:05] is the big takeaway that we can't stop [218:08] thinking about after talking through the [218:11] whole story of the episode great I'll go [218:13] first couple things about this company [218:16] one man Forest senior was such a [218:20] freaking G and because the company is so [218:23] private like nobody knows about him you [218:25] know like but he should be right up [218:26] there with Sam Walton Henry Ford with [218:31] the very very greatest American [218:33] entrepreneurs of all time he was truly a [218:35] genius I think probably had a lot of [218:38] complications and faults in his personal [218:40] life which is the same thing as [218:42] basically everyone we cover on this show [218:44] Rockefeller all of them yeah yes but [218:46] when it comes to business and [218:49] entrepreneurial leaders he's one of the [218:51] greatest yep for sure okay so that's one [218:54] that's not necessarily the quintessence [218:56] of the company but I feel like we need [218:58] to say that just because it's not like a [219:00] widely accepted fact totally two though [219:03] you know we have not yet studied [219:05] Coca-Cola we haven't studied Proctor and [219:07] Gamble so with the caveat that those [219:11] companies and ones like them probably [219:13] also fit this bill I think is one of the [219:16] first modern companies H that's [219:19] interesting you know everything that [219:21] forest was doing back in the 30s when he [219:24] was starting were like radical and now [219:27] are just completely widely accepted yeah [219:31] everything from open Office structures [219:34] to diversification to getting into pet [219:37] food to seeing that dogs and cats were [219:38] going to become part of families [219:40] maximizing yield on equipment for [219:42] efficiency maximizing yield operating [219:45] managing companies in a scientific way [219:48] getting into television advertising you [219:51] know all of it he was like really really [219:53] Visionary on this stuff in an era where [219:57] none of his competitors were doing this [219:59] I mean God the market research and the [220:01] positioning that they did with M&M'S [220:03] taking what essentially was a failed [220:04] product and then doing the research to [220:07] understand who the target consumers were [220:10] and who the target buyers were and how [220:12] that was different and then tailoring [220:13] marketing messages appropriately for [220:16] that way way way ahead of its time yep [220:20] you're so right it's funny that leads me [220:22] all to my quintessence of this episode [220:27] is how path dependent the outcome [220:31] was and what I mean by that is could you [220:35] do all of the things that Forest Mars [220:39] did to create a company like this today [220:41] no you could not it required being in [220:45] that place in that time with that [220:47] technology and that competitive set and [220:49] this is probably true across all [220:50] episodes but it just strikes me in the [220:52] face right now that he needed to have [220:55] the chip on his shoulder from the [220:57] relationship with his Dad he needed the [221:00] assets that he got from his dad when he [221:02] went to Europe yeah oh even before that [221:04] I mean he wouldn't have gone to Yale if [221:06] it weren't for his dad finally becoming [221:09] somewhat wealthy and if he hadn't gone [221:11] to Yale he wouldn't have gotten exposed [221:13] to the DuPont yeah so many dependencies [221:16] here right he happened to be a American [221:21] capitalist competing against British [221:24] Quaker and British Quaker inspired [221:27] competitors industrialization and [221:29] mechanization the timing of television [221:31] and commercials and grocery stores when [221:33] it did all these were brilliant [221:35] decisions executed within the context of [221:37] his time but you needed to be in that [221:40] time in that place in that specific [221:41] situation in order to pull any of this [221:43] off so the question is how do you do [221:44] this today with a completely different [221:46] Playbook yep you don't you build your [221:48] own company because all of the great [221:50] companies that we study are their own [221:52] companies yep it's exactly right love it [221:56] all right before we get to carv outs I [221:57] have one piece of trivia for you oh I [222:00] love trivia so you mentioned that the [222:03] Hershey trust is responsible for [222:07] maintaining the Milton Hershey School [222:09] which started as a school for Orphans [222:11] and now is a school for students that [222:13] come from low-income families or need a [222:15] home or you know just need a benefit [222:17] from what the school provides David how [222:20] big is the endowment of the Milton [222:22] Hershey School I think it is by far the [222:25] largest endowment of a secondary school [222:28] in America and assuredly the world yes I [222:31] want to say it's like 10 or 15 billion [222:35] yep 17.4 billion doar yeah for a high [222:38] school well it's some younger than that [222:41] but the enrollment of the school is 22 [222:45] students and so the endowment dollars [222:48] per student I assume are the absolute [222:51] highest anywhere in the world it is [222:53] totally incredible I mean we debated [222:55] when we first set out to do this episode [222:58] whether it should be about Mars or [222:59] Hershey we ultimately decided Mars [223:01] because these days it's the bigger and [223:03] more important company but the Hershey [223:05] Story is freaking wild Milton Hershey [223:07] gave the whole company to the Hershey [223:08] trust yeah which operated a school for [223:11] Orphans like a high school for Orphans [223:14] that owns the company the primary [223:16] shareholder has a primary purpose that [223:18] is maintain the school right it is a [223:21] very specific mission to support this [223:24] school they have a hard time spending [223:25] all the money I mean they're never going [223:26] to get close to actually spending the [223:28] endowment dollars or have any risk of [223:30] spending the endowment dollars just [223:31] think about what 4% of 17 billion is a [223:34] year and think about what the required [223:35] budget is to run a 2200 person school [223:37] yeah totally wild love it okay carv outs [223:41] I got three one we've already talked [223:43] about dandelion chocolate these people [223:46] are the best the factory is so freaking [223:49] cool and the chocolate is absolutely [223:51] amazing they are a part of the beant to [223:54] Bar movement so they Source beans that [223:57] are not commodity beans they [223:59] specifically Source single origin beans [224:02] they go the extra mile to you know [224:04] remove any imperfections and then in a [224:06] very craft way they make some of the [224:09] best chocolate you've ever tasted it [224:10] really is like the wine industry yeah I [224:13] think I speak for you too we're both [224:15] very grateful to Todd Elaine and the [224:17] team there for just kind of taking us [224:19] through it all and explaining how [224:21] chocolate is made it was very cool so if [224:24] you're looking for any late holiday [224:25] gifts or just any good chocolate I can't [224:27] recommend dandelion enough ah well you [224:30] stole one of my car outs dandelion was [224:32] one of my car outs but specifically the [224:34] dandelion Advent calendar didn't you buy [224:36] that for Jenny which thanks to our [224:38] relationship with the company yes I got [224:40] the opportunity to buy I bought the [224:42] double so that Jenny and I can both [224:43] enjoy every night no o oh my God this is [224:48] the single greatest Advent calendar that [224:50] has ever been created in the history of [224:52] mankind the artwork the design the [224:54] presentation it's like this is if Hermes [224:58] made an advent calendar with all of the [225:00] presentation and the objectness like [225:02] every day is an ornament that can go on [225:04] the tree it's so great and then the [225:06] chocolate inside they partnered with [225:09] chocolateers all over the country I [225:10] think maybe even internationally all [225:12] over the world to just HDE at some of [225:15] the very best talent in the chocolate [225:18] Mak industry globally anyway amazing [225:21] Dand they're so great all right my [225:23] second one I think a while ago I [225:25] mentioned I got a Tesla Model Y which is [225:27] just an awesome car it's just great went [225:31] out the other day noticed that there was [225:33] a bolt sticking through the tire that we [225:36] had driven over and the tire was flat I [225:38] opened up the app and within 90 minutes [225:41] there was somebody at my house that was [225:45] taking off the wheel throwing it in a [225:47] truck putting on a temporary wheel so I [225:49] was good to go immediately you know [225:51] within 90 minutes and then two days [225:55] later it showed back up at my house they [225:57] had repaired the issue with the tire [225:59] pumped it back up gave me my wheel back [226:02] took the other wheel I didn't have to do [226:03] anything I'm just standing there and the [226:05] whole thing cost me like 120 bucks wow [226:08] it was like the best car service [226:10] experience I've ever had in my life [226:12] that's pretty awesome it is wild how [226:14] different Tesla is from other car [226:16] companies the model Y is the best family [226:21] vehicle ever created by mankind It's [226:24] Like the Model T of Our Generation yeah [226:26] it totally is so great okay that's [226:29] number two you got one more last one I [226:32] think last year I carved out Silo Silo [226:34] season 2 is here on Apple TV and it is [226:37] excellent uh yeah per usual part for the [226:40] course for me I have not watched any of [226:42] it but I did read the book and the book [226:44] is excellent you read wool I read wool y [226:47] it's great though I mean a lot of times [226:49] shows I think have a hard time [226:50] maintaining their season one into [226:51] momentum into two and two into three and [226:54] there's no problem with that here didn't [226:55] you get to meet the author a while back [226:58] Hugh yeah he's great he's really great [227:01] all right I had one other besides the [227:03] dandelion Advent calendar which is the [227:05] movie Home Alone this is sort of a [227:07] humorous one but since this is a [227:09] nostalgic episode about our childhood [227:11] and the holidays Home Alone was my very [227:15] very very favorite movie growing up as a [227:18] kid I saw it in theaters when it came [227:20] out I was the perfect age I think mcau [227:22] Cen and I are roughly the same age you [227:25] give or take a year loved it so much [227:28] after Thanksgiving holiday travel this [227:31] year I have a whole new appreciation for [227:34] that movie which is the perspective of [227:37] the parents did you leave one at home no [227:40] but I you come close I Now understand [227:44] exactly how it could [227:47] happen and I am excited to watch it [227:50] again at the holidays this year through [227:53] the lens of mom and dad nice yeah [227:57] Thanksgiving travel was pretty wild this [228:00] year we went back to Pennsylvania to [228:02] visit my parents and it was exciting on [228:07] the plane ride there I'll put it that [228:09] way and uh the most awesome moment [228:11] though I mean it was this was one of [228:12] those plane trips as a parent worried oh [228:15] man like the lowest of the lows shall we [228:17] say you're just sorry for everyone [228:19] around you sorry for everyone around you [228:21] but the most amazing thing happened we [228:23] landed after the 5 and 1 half hour [228:25] flight and uh very kind gentleman [228:29] sitting in the seat directly ahead of my [228:31] three-year-old daughter who was causing [228:34] Ruckus the whole time and kicking his [228:35] seat and Etc he turned around he said [228:38] are you David from [228:39] acquired I like yes I'm sorry like oh no [228:42] I've been no oh no he's like [228:45] I've been listening to you the whole [228:46] flight and then some other people in the [228:48] row started popping up being like oh [228:50] I've been list like it was um wait [228:52] multiple people were popping up and [228:53] saying yeah that they listened to a [228:55] choir that either had been listening on [228:57] the flight or these are their favorite [228:58] episodes or it turned what was like a [229:01] truly one of the lowest lows of my [229:03] parenting journey into a uh a wonderful [229:06] memory so thank you to you all on on [229:08] that flight from SFO to Philadelphia the [229:10] day before Thanksgiving after watching [229:13] your daughter kick someone's seat from [229:14] for 5 hours you have to be like I really [229:16] hope that guy doesn't never know who I [229:17] am yeah yeah [229:18] yeah yeah that was my first reaction too [229:21] of like oh no but but no it turned into [229:25] the most wonderful uh turnaround of the [229:27] day wow wow wow all right listeners well [229:32] with that a huge thank you to JP Morgan [229:34] payments to cruso and to stat Zig you [229:36] can click the links in the show notes to [229:38] learn more about some of our favorite [229:40] companies special shout outs also to [229:42] arvind navaratnam at worldly partners [229:45] for his awesome awesome write up on Mars [229:47] there's way more data in that than we [229:49] were able to describe on air so if you [229:51] want to see some great charts industry [229:53] stats on chocolate over the years on [229:55] sugar consumption on Hershey on Mars on [229:59] the whole competitive Set uh it's linked [230:00] in the show notes I can't recommend [230:02] reading through his whole PDF enough oh [230:05] Arvid is so great so great to Todd at [230:08] dandelion chocolate as we mentioned yes [230:10] and also Clara Shen who works at [230:12] dandelion as well and chatted with me [230:14] and had a lot of great insights also on [230:16] the industry and on Mars yeah to Gary [230:19] guitard who I'm sure many of you have [230:21] eaten guitard chocolate either directly [230:24] by knowing it or indirectly by not [230:26] knowing it as they are the chocolate [230:27] supplier to many excellent chocolate [230:29] companies around the world including the [230:31] world famous Seas candies yes which I [230:36] didn't know how much I enjoyed guitar [230:38] chocolate until well I realized how much [230:41] of it I'd eaten through Seas yes [230:43] speaking of trivia I've got one for you [230:46] related to guitard before Milton Hershey [230:49] started making chocolate in 1900 there [230:53] were three chocolate producers in [230:56] America who predated him and I believe [230:59] all of which are still operating making [231:02] dark chocolate not milk chocolate [231:03] obviously at the time one of which was [231:06] guitard here in San Francisco do you [231:09] know who the two others were I don't [231:11] think you will get the one on the east [231:12] coast but the third was also located [231:16] here in San Francisco giradelli [231:17] giradelli yep yes and then the uh East [231:20] Coast I don't know the one on the east [231:22] coast was Walter Bakers in Massachusetts [231:24] I think oh shoot I did know that yeah [231:27] yeah Baker is sort of like the Godfather [231:29] of chocolate in the US right I think [231:31] that's right I think that's right but [231:33] it's super interesting how two [231:35] manufacturers popped up here in San [231:36] Francisco in the 1800s nice climate for [231:39] it before air conditioning at least and [231:41] then one more big thank you to say on [231:44] multiple fronts to Joelle Glenn brener [231:47] the author of Emperors of chocolate and [231:50] the only journalist ever to get access [231:51] to Mars one for just writing the book we [231:54] read a lot of business books business [231:56] histories here on Acquired and emperess [231:59] of chocolate is one of the greats it's a [232:01] total page Turner and then also thank [232:03] you to her for chatting with me as we [232:05] were preparing she was very very helpful [232:08] in uh clarifying A few points and [232:10] getting the story behind the stories [232:12] can't recommend the book enough go check [232:14] it out great well if you like this [232:16] episode go check out our other episodes [232:18] on lvmh Sony or Brookshire Hathaway if [232:21] conglomerates are your thing or for more [232:23] complex manufacturing Nova Nordisk the [232:26] makers of OIC or if you want something [232:28] more recent check out acq 2 we just had [232:31] that awesome conversation with the CEO [232:33] of arm Holdings Renee H if you're [232:35] looking for more semiconductors in your [232:37] life and if you want to discuss it [232:39] please come join us at acquired. fm/ [232:43] slack with the other smart respectful [232:45] kind folks there with that listeners [232:49] happy holidays and we will see you next [232:50] time we'll see you next time who got the [232:54] truth is it you is it you is it you who [232:58] got the truth now huh [233:02] [Music]