Mars’ outgoing CEO on succession, family businesses and eating his own dog food
At some businesses, “eating your own dog food” is a metaphor. One company takes the saying more literally: Mars, which owns the world’s largest pet food business alongside chocolate brands from M&Ms to Milky Way, expects its managers to test the Iams, Pedigree and Royal Canin products before they leave its factories.
After 34 years with the group, and at the end of an eight-year run as chief executive, Grant Reid has eaten his fair share. One of Mars’ five guiding principles is quality, he explains: “You know, if it’s not good enough for me, then why would it be good enough for your pet?” Cesar, he reports, is his favourite brand.
That commitment to the company culture earned Reid, 63, rare public praise from the family that still controls Mars, 111 years after Frank Mars started selling butter cream candy from his kitchen in Washington state.
John’s rarely-quoted sister Jacqueline, whose wealth (like his) Bloomberg estimates at more than $50bn, lauded Reid as “a wonderful ambassador for Mars [who] handled his interactions with the public exceedingly well”.
Interactions with the public were once almost unheard of at Mars, inviting inevitable comparisons with another privacy-loving chocolate baron, Willy Wonka. But Reid has played a critical role both in building the fortune of America’s third richest family and in making a 140,000-person company now owned by “G4s”, “G5s” and “G6s” a little less opaque.
The announcement of his planned handover to Poul Weihrauch, head of Mars’ petcare division, extended that trend, revealing that the group’s annual revenues had grown by more than half in Reid’s time as CEO, to almost $45bn.
The outside world still knows little about Mars’ profits, other than the fact that the family takes a 10 per cent dividend and reinvests the rest, but it now knows that Mars’ sales outstrip those of Coca-Cola and that its growth has left most comparable consumer goods companies in the dust.
It also knows that Reid has turned Mars’ focus on thriving for generations into an argument that it should lead its industry’s efforts to behave more sustainably, encourage healthier snacking habits, reverse deforestation and purge forced labour from global supply chains. Mars once let its brands speak for the company, he explains, but in the social media age “we’ve tried to find our voice”.
Asked what advice he has given Weihrauch, he says he wishes he had moved faster. His successor should trust his judgment, he says: “Go, and don’t give up progress in pursuit of perfection.”
About half of the growth Mars achieved under Reid was organic, he says, driven by brand-building and investment in its digital capabilities. But the other half came through acquisitions, including investments in healthier snacks such as Kind bars and 2017’s $9.1bn purchase of a veterinary services business called VCA.
The diversification that has taken petcare to almost 60 per cent of group sales was not a response to the world turning against sugar, Reid insists.
Pressed on how Mars can keep selling more chocolate without worsening the obesity crisis, he parries that confectionery accounts for under 2 per cent of the calories people consume. If its customers understand that chocolate should be an infrequent treat, he argues, then Mars has behaved responsibly.
Asked what makes cats and dogs such an attractive growth business, meanwhile, he replies: “It’s about the relationship people have with their animals.”
Part of a leader’s job is “importing stress and exporting calm”, he explains. And while the judo black belt and mixed martial arts fan has found exercise one way to handle stress, he has also relied on Ollie, a shelter dog, which at 15 is now at an age to need Royal Canin’s “advanced mobility support” food.
“They say the CEO job is a lonely job,” he says: “Not when you have Ollie; he always listens.”
This story originally appeared on: Financial Times - Author:Andrew Edgecliffe-Johnson
