Snickers, the iconic confectionery brand, has global sales well in excess of $3b. Well that is until last year’s voluntary recall that saw the candy bar vanish from shelves.
Here in Japan, Snickers was rare in being one of only three global confectionery brands that had almost universal distribution. Besides Kit Kat and Haribo, the market is dominated entirely by local stalwarts like Meiji and Lotte.
I do not know exactly Snickers’ sales in Japan but would estimate they were well north of US$100m. The brand was also unusual in that there was no adaptation made for the Japanese market, besides a Japanese label. The product was produced in Australia; the bar’s shape, size and taste were unchanged.
Snickers is a highly profitable franchise. There are a small number of SKUs produced in large, highly efficient plants. The major cost drivers are chocolate (cocoa powder) and nuts. If you told me that Mars Japan were making over 35% gross margin on Snickers I would not be surprised…
…That is until shards of glass were found in the product and some consumers complained their teeth fell out.
Mars followed the standard recall playbook, acted swiftly and initiated the recall themselves before being ordered to do so by the authorities.
It is almost a year before Snickers is being released again.
A week is a long time in politics, says the adage. A year is a very long time in a highly competitive market with thousands of SKUs, and retailers who track daily sales closely.
Can Mars’ sales team fight back?
No other heavy hitting brands from the Mars portfolio are here in any scale. Besides a smattering of Milky Way and M&Ms, there is no Mars bar, nor Twix, not even Galaxy. Knowing Mars it will not be without trying.
Product recalls are unusual in Japan, but not unheard. Snow Brand suffered a food poisoning issue around 20 years ago that affected over 14,000 people. Management mishandled the outbreak and there was catastrophic damage to the company’s reputation that resulted in an expensive corporate name change. Snow died and Mega Milk was born.
I am wondering why it has taken Mars almost a year to recover. Is it because their Australian (Ballarat) plant has been refurbished? Was there a lack of spare capacity elsewhere, for example in New Jersey or even Slough, England? Or were the shards of glass symptomatic of a more serious issue?
Mars has a Snickers plant in China and perhaps felt the ‘made in China’ claim would not work for product sold in Japan. I do not know.
I am looking forward to seeing Snickers (once known as Marathon in some markets) again in Japan. I hope it can survive!