Mars Wrigley to invest $30m in its Ballarat factory

Mars Wrigley, the US family-owned confectionery giant, will invest $30m into its Ballarat factory in central Victoria to advance its manufacturing capabilities.

Mars Wrigley Australia general manager Andrew Leakey says there are growth opportunities in Australia. Picture: Scott Ehler Photography

Mars Wrigley, the family owned confectionery, gum and pet food giant, will invest $30m at its Ballarat factory in central Victoria to advance its local manufacturing capabilities, laying down the infrastructure for future growth including using the facility to ramp up its exports to key markets in Asia.

The investment comes on top of $37m in funding unveiled in 2020 as Mars Wrigley, the multibillion-dollar food business that is ranked among the biggest family owned companies in the US, directs more capital expenditure into its Australian operations.

It comes as the business is reacting to new trends running through the confectionery and snacking category triggered by Covid-19 and home lockdowns, including the growing popularity of families gathering around the TV for movie nights and binge watching shows on popular streaming services.

Mars Wrigley Australia general manager Andrew Leakey told The Australian there were significant opportunities for growth of its Australian business, which raked in sales of more than $1.66bn in calendar 2019 across key brands such as Mars, M&Ms, Maltesers, Milky Way, Hubba Bubba, Eclipse mints, Extra and its bulging petcare portfolio that includes Pedigree, Whiskas and Eukanuba.

“I came back to the business two years ago and we had significant opportunity in our business for growth and a number of those relied on investment and innovation and capability, so we certainly have sped that process up,” Mr Leakey said.

“We committed last year that we would spend $37m and we are just announcing that we will spend an additional $30m specific to our Ballarat site – and we are really pleased we can compete internally with our other markets and get that level of investment into our factories in Australia.”

Mr Leakey said the new $30m injection into the Ballarat factory will allow Mars Wrigley to ramp up its presence as a technical research and development hub for Australia and parts of Asia, allowing it to invest in local innovation, launch new products across key brands such as Mars and M&Ms.

“It also allows us to improve our processes and technologies to future proof what we will need to do in the future. So part of the $30m investment is in two areas: One is in packaging capabilities so it allows us to pack products differently, but also our chocolate making capability to build capacity for future growth.”

The $30m injection into the Ballarat factory will allow Mars Wrigley to ramp up its presence as a technical research and development hub for Australia and parts of Asia.

Those capabilities at the Mars Wrigley Ballarat factory include introducing more variants (flavours and colours) to the bar line, including the new Mars Raspberry Smash, and rolling out asset improvements and enhancements to both the M&M’s & Pods lines, with Mars Wrigley’s Ballarat factory the only one in the world that makes Pods.

It will also install a new packaging line for Maltesers to allow for increased volume of production, unlocking new export of the product to South Korea and increased export opportunities to growth markets across Asia during peak season demand.

Mr Leakey said the Mars family, who have a reputation for being reclusive and camera shy, are deeply involved in the Australian business – and in late 2019, when the company celebrated the 40th anniversary of the Ballarat factory, it was visited by John Franklyn Mars, the son of one of the Mars founders, Forrest Mars Senior.

Turning to current trading conditions, Mr Leakey said the confectionery and pet food company had witnessed changes to its business in the wake of the Covid-19 pandemic, including a change in the type of product people were buying and where they were buying it.

“So for example grocery channels, Woolworths, Coles, Metcash etc, IGA stores, are doing well because essentially the foot traffic follows what’s open.

“And that has helped us when it comes to people sharing, treating themselves at night and movie watching at home and all those sorts of things.

“We are all spending more time at home, we are all spending more time watching TV and streaming and I think that goes hand-in-hand with people wanting to bring a little smile and kind of relax and forget about everything else that is going on outside the home and have quality time with their families.

“That is working very well for our chocolate business and M&Ms, Maltesers, Pods, have all done very well in what we call ‘bite size’ and sharing.”

However, the convenience channel has suffered, Mr Leakey said, as well as any channel closed down by lockdowns.

“Because clearly the foot traffic is not there and that is the main part of their model.

“We have seen huge changes as you can expect with cinemas being shut down, that has impacted more on our convenience or out-of-home occasion channel.

“But when they started to open up – so NSW and then states that aren’t in lockdown, like WA, South Australia and Queensland – we are actually seeing regular and consistent purchases in those channels. So that’s returned very quickly, which is really encouraging to see.”

Pet ownership has rocketed as people locked down at home sought pet companionship and this has played strongly to the Mars Wrigley pet food and petcare portfolios which feature leading brands.

“Breeder rates are up significantly, so demand for our puppy and kitten foods have increased, we have certainly seen that increase,” he said.

Originally published as Mars Wrigley to invest $30m in its Ballarat factory