Hershey vs. Mars: How the US chocolate giants helped each other succeed despite cut-throat rivalry

Hershey vs. Mars: How the US chocolate giants helped each other succeed despite cut-throat rivalry

It's a bittersweet tale, literally. One of the most iconic brand wars highlighted in History Channel’s docu-series, 'The Food That Built America', was that of Hershey and Mars – two chocolate companies that continue to battle each other for the top spot in the U.S. market even to this day.

However, the fact that most people might be unaware of is that Mars was once codependent on Hershey to procure the key raw material for their product and Hershey enjoyed enormous revenue from supplying chocolate to its number one rival, Mars.

It all started when Frank Clarence Mars, the founder of Mars Inc., approached William Murie, the then President of the Hershey Company, looking for a modest credit on a steady supply of milk chocolate for his newly developed candy bar, Milky Way. Since Mars was a relatively regional company at the time, operating out of Minneapolis, Minnesota, founder Milton Hershey did not think twice about supplying one of the key ingredients for the former's candy bar.

As the Milky Way took off, becoming an instant hit, Mars Inc. expanded exponentially, soon becoming a national brand. With its success grew Hershey's revenue from supplying its top rival with milk chocolate - a fact which made Milton realize that the candy bar could be a threat to sales of his finished products. 

A product shot of three different Mars Inc candy bars: Snickers, Milky Way, and 3 Musketeers. (Source: Getty Images)

"Mars was Hershey's biggest customer," Joël Glenn Brenner, author of 'The Emperors of Chocolate: Inside the Secret World of Hershey and Mars' said in the second episode of the docu-series. "Mars candy company represented a huge part of Hershey's sales. Few people understand that two companies that we see today as enormous competitors, that if you look back in history, cooperation started it all."

To compete with the booming success of the Milky Way, Milton Hershey came up with a candy bar of his own, called Mr. Goodbar, which was filled with roasted peanuts. To counter Hershey's newly launched candy bar, Mars introduced a variant of the Milky Way, filling it with peanuts and calling it the Snickers bar. It also came up with another nougat-filled concoction known as the 3 Musketeers, both of which went on to become iconic candy bars. 

West Palm Beach, USA - April 7, 2011: A product shot of two snack sized Hershey's candy bars, Mr Goodbar and Krackel. Mr Goodbar is made with chocolate and peanuts, and Krackel is made with chocolate and crisped rice. (Source: Getty Images)

The Second World War deepened the rift between the two companies as both of them worked toward establishing their relationship with the government by supplying the products to the military men who were deployed overseas.

Being the pioneer of the milk chocolate in the country at the time, the president of the Hershey Company was approached by the United States Army captain Paul Logan in April 1937 to develop a heat-resistant, high-energy chocolate bar that tastes “just a little” better than a boiled potato for the troops.

“Hershey played a critical role in supporting the military by supplying rations,” Brenner said.  “They were working with the war department to actually invent something that would help the soldiers remain alert and active and well-fed for maybe an entire day on a single ration.”

1942: A NAAFI (Navy, Army and Air Force Institute) canteen brings welcome chocolate, tea, cigarettes and newspapers to 'D Company' of the 4th Battalion of the Green Howards (an infantry regiment of the British Army), in the Western Desert south of Tobruk, Libya, World War II. The unit was later captured at the Battle of Gazala on June 1 , 1942. (Photo by Fox Photos/Getty Images)

The result was a protein-rich supplementary ration D bar containing 600 calories. Although the final product was a bitter, paste-like concoction that turned to dust on eating, it had the ability to withstand 50 degrees Celsius (122 degrees Fahrenheit) heat, making it an ideal food for the World War II soldiers. Hershey was given the contract to produce 24 million of them a week.

“It was so important to winning the war that the Hershey Company received one of the highest awards ever given out by the military for civilian contribution, and that was huge,” Brenner added.

At the same time, Mars supplied American troops with M&M's, a product which had a higher melting point compared to regular chocolate – which typically melted at 34 degrees Celsius – due to its hard exterior candy shell. When the soldiers returned back to their land, the popularity of M&M’s exploded, and it ended up beating the sales of the Hershey bar.

People visit the M&M store in Times Square on July 24, 2014 in New York City. (Source: Getty Images)

During the Persian Gulf War, which took place from 1990 to 1991, Hershey introduced egg whites in its new Desert Bar. As a result, the chocolate achieved a fudge-like texture, enabling it to withstand the Arabian heat. Over 100,000 one-ounce bars were shipped to the troops at the time. However, on popular demand of the soldiers on the ground, the familiar-tasting Mars chocolate was also shipped overseas to the military camps, according to the Walrus.

After the war ended, Mars was contracted by the Pentagon to produce non-melting chocolate, which needless to say, did not sit well with Hershey. The latter accused Mars of violating FDA laws regarding sugar allowance.

In the months that followed, both the companies hurled bitter accusations and lawsuits at each other. The then general-counsel of Mars, Edward J. Stegemann, called Hershey “lying SOBs” and threatened to sue the company for defamation.

Hershey threatened to sue its rival right back for product misrepresentation. “The way Hershey was complaining, you’d have thought Mars was breaching national security by selling military secrets,” Paul Lieberman, the attorney who settled the government contract, said.

The silent business rivalry erupted in an all-open chocolate war – which continues to this day.

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