Elon Musk isn’t sweet on candy makers2 min read . Updated: 09 Dec 2020, 10:05 AM IST
- Tesla CEO says lack of hits shows hazards of consolidation; Mars offers to send him some new candies
Elon Musk has some sour thoughts about Big Candy.
Candy makers have gotten too big and lost touch with what consumers want, the Tesla Inc. chief executive said during an interview Tuesday for The Wall Street Journal’s CEO Council.
“When was the last time there was some good candy?" Mr. Musk asked during the interview. “What’s the forcing function for a new candy bar? I haven’t seen one in ages."
The candy industry disputed Mr. Musk’s statement about its lack of innovation. Mars Wrigley U.S. Chief Marketing Officer Sarah Long said the company has introduced more than 20 new candies this year. She offered to send some, such as new sugar-cookie-flavored M&M’s, to Mr. Musk.
“We would be delighted to deliver more smiles and some of our new innovations to Elon and the Tesla team," Ms. Long said.
Mr. Musk said consolidation among big food makers has led to most candy being made by just a few companies, some of which also make loads of other foods and products such as pet food and baby food. He didn’t name any specific companies.
“We’ve got to watch this consolidation that ends up resulting in lower responsiveness to the customer," he said.
The world’s top candy makers—Mars Inc., Hershey Co., Mondelez International Inc., Nestlé SA, Meiji Holdings Co. and Ferrero Group—generate about three-quarters of global candy sales, according to market-research firm Euromonitor.
Mars, which makes M&M’s and Snickers bars, also makes Royal Canin and Pedigree pet food and operates a nutrition research center. The company hasn’t created a new candy brand in decades but has added flavors, such as Snickers Creamy Almond Butter, and mash-ups such as an M&M’s chocolate bar introduced in 2018.
Hershey in 2017 introduced its first new flavored chocolate bar in 22 years: the Hershey’s Gold bar, a caramel-creme treat with peanut and pretzel bits. Mondelez and Nestlé didn’t immediately respond to a request for comment. Hershey and Ferrero directed requests for comment to the National Confectioners Association.
“Innovation drives the thousands of companies that make up the confectionery industry," the association said in a written statement.
Mr. Musk said the lack of new ideas he sees at Big Candy companies is a problem that also occurs elsewhere, including in the tech industry in Silicon Valley. He said competition leads to innovation. “A monopoly is going to have the weakest response to the customer," he said.
Some investors have criticized century-old food makers for years for losing ground to newer, niche brands that have introduced products in line with health and wellness trends. Some of the biggest companies have ended up buying some of those smaller challengers.
Mars in November purchased Kind Inc.’s North America business, which makes nut-and-fruit bars that have eaten into candy sales in recent years. Hershey has purchased popcorn brands and a protein-bar company in recent years.
Nestlé sold its U.S. candy business a few years ago to focus on faster-growing segments such as baby food and coffee. Ferrero bought Nestlé’s U.S. candy business for $2.8 billion in 2018, betting it could revive growth for classic brands such as Butterfinger and Crunch bars. Last year, it added Keebler cookies to its business, which it bought from Kellogg Co. for $1.3 billion.
This story has been published from a wire agency feed without modifications to the text.
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