Mars Wrigley to invest $25.5m in Ballarat chocolate factory

Mars Wrigley will invest $25.5m to expand its chocolate factory in Victoria as the confectionery giant responds to rising demand.

Mars Wrigley Australia general manager Andrew Leakey sees huge opportunities in the Australian market for chocolate and confectionary sales despite the challenges of rising interest rates and soaring inflation squeezing household budgets.

Mars Wrigley will invest $25.5m to expand its chocolate factory in Victoria as the confectionery giant responds to rising demand.

And the chocolate maker – whose portfolio of sweets includes Mars, M&M’s, Snickers and Maltesers – say it is not concerned that rising interest rates and soaring inflation will squeeze consumer spending and cause a pullback on household chocolate budgets.

Mars Wrigley Australia will underpin its capacity to feed consumers with an expansion of its Ballarat factory to ramp up its local manufacturing capabilities across its portfolio of brands.

The investment to ratchet up its Pods production is particularly fitting given the product was invented in the Ballarat factory in 2004. Currently it is the only factory in the world to produce them – about 1 billion Pods pieces a year.

The new funding builds on $67m invested by Mars Wrigley over the past two years.

Owned by the Mars family – ­estimated to be worth more than $100bn and ranked the third-richest in the US – the food company has been manufacturing in Ballarat for more than 40 years.

Mars Wrigley Australia general manager Andrew Leakey said he had confidence in the economy as well as the consumer, despite a number of economic challenges emerging this year.

Despite higher interest rates and soaring inflation, chocolate such as Maltesers made by US giant Mars Wrigley is still being seen as an affordable treat.

“One of the pleasures of working for a family-owned business is we have the ability to think longer term, and obviously make sure that our investments match our plans,” Mr Leakey said.

“We are super excited about our future. There’s challenges, we know what they are, but from a human perspective we spend a lot of time talking to consumers to understand what they’re looking for in our categories. That drives our business and helps us with what innovation we’re bringing and what consumers like about our core products.”

Increasingly, what consumers are after are the company’s bite-sized snacks, as well as the traditional single bars such as Mars and Snickers, and served in value packs to share with family and friends in front of the television.

For now this demand hasn’t been dented by successive interest rate rises since May and rising inflation, especially for food.

“We are not seeing that at all,” Mr Leakey said. “People are looking for that little treat, that little piece of indulgence, something that brings a smile. We are seeing more and more families connecting at home, doing movie nights, and that’s where our products sit in their value for money when it comes to bringing smiles to families and it’s really important that we get to do that.

“I think a lot of people have always looked for these little moments of happiness and these little treat opportunities. We certainly have seen a lot more of that obviously with technologies, streaming services, etc, so people are now really enjoying their time.

“From our perspective, we are actually seeing consumption increasing. We are seeing consumers looking for those more occasion-based foods and that’s where we’re investing. We are investing in our bite-sized foods and in our (chocolate) bar lines.”

The bite-sized category is one of Mars Wrigley’s fastest-growing segments and Mr Leakey said the chocolate manufacturer saw substantial opportunities in this space, with a number of exciting projects under way.

Mr Leakey said Mars Wrigley had increased some of its prices in the wake of inflationary pressures across its business, but had kept a tight rein on its own costs to keep those price rises to a minimum.

He also noted that severe worker shortages were creating bottlenecks. Mars Wrigley currently had some gaps in its workforce, although this had not interrupted its manufacturing output.

“We are as challenged as others in the industry,” he said.

“We’ve always had a very good reputation in the marketplace, getting … employees to join us is a challenge but we obviously get them coming through.

“Getting people with the right skills, in STEM, engineering … coming through those, those are the gaps at the moment.”