Could Sugar Be the Reason Why Americans are so Attached to Chocolate?

Introduction: America’s Top Five Chocolate Candies

On May 19, 2015, Fox News published an article ranking America’s five favorite chocolate candies by total revenue generated. M&Ms led the pack with a total of $406.7 million in sales, followed by Reese’s Peanut Butter Cups at $398.9 million. Snickers came in third with $386.2 million while Hershey’s Milk Chocolate Bar fell to fourth at $249 million. Kit Kat was fifth, generating a total revenue amount of $201.8.

An interesting observation about these five chocolate candies is that they are all manufactured by one of two chocolate companies: Hershey’s (Reese’s, Hershey’s Milk Chocolate, and Kit Kat) and Mars (M&Ms and Snickers). The two companies’ dominance in the space is well-documented – this graph below from December 2013 provides us with an opportunity to see how big they really are compared to the rest of the chocolate confectioners.

hsy-us-chocolate-market-share_1_large
Hershey and Mars have a dominating presence in chocolate, accounting for nearly 3/4 of the entire market.

Hershey’s owns 44% of the US chocolate market and Mars owns 30%. What is it that made these chocolate companies so successful, and why was it these brands in particular? There is much to learn from a close inspection of their histories, similarities, and differences. In particular, we realize that there isn’t much differentiating the candies themselves when it comes to ingredients and production method, leading us to differences in sugar content specifically. In order to analyze these similarities and differences, we must first understand the history of each company.

 Hershey’s History

Hershey’s website provides us with an excellent overview of the company’s history, as well as information on Milton S. Hershey, who they tout as the “founder of a chocolate empire”. Milton Hershey started out as what many would call a failure, with little education and two bankruptcies with his previous business ideas under his belt. Finally, on his third business venture, he got it right, building a company called Lancaster Caramel Company. He eventually sold it to work full-time on his own unique chocolate recipe, creating the first Hershey’s Milk Chocolate Bar in 1900.

milton_s-_hershey_c1905
Milton S. Hershey, founder of The Hershey Chocolate Company and numerous non-profits.

The company rapidly grew after the Milk Chocolate Bar became a huge success, as Hershey’s Kisses were introduced in 1907 and Reese’s Peanut Butter Cups were acquired in 1963. Hershey’s website also demonstrates his activities beyond chocolate – in particular, he established a town for his workers, replete with schools, houses, and churches, because he believed in treating his workers well in order to maximize productivity. He proceeded to found the Milton Hershey School, the Hershey Trust Company, the M.S. Hershey Foundation, and the Penn State Milton S. Hershey Medical Center.

Despite all of the good deeds that Milton S. Hershey performed over the course of his life, his company has faced criticism in recent years. For example, the company has been criticized as recently as 2010 for fair trade issues, as the manufacturing giant had been unclear about where it was getting its cocoa from and was resistant to adopting new fair trade policies unlike a lot of its competitors. The Global Exchange report accuses Hershey of having a high percentage of workers in Ghana and Cote d’Ivoire that are victims of human trafficking, abuse, and child labor.

It doesn’t end there – in 2012, a group of foreign exchange students from Britain accused Hershey of overworking, underpaying and taking advantage of the students. Federal officials decided to collect back wages for the exploited students.

 Mars’ History

Born in 1884, the young Frank C. Mars suffered from polio and as an infant and lost his ability to walk. He started a candy business when he was only 19 years old; however, both his first business and marriage failed.  He proceeded to remarry in 1910 and founded Mars Candy Factory in Washington in 1911. He began to see great success upon the introduction of the Milky Way Bar in 1923. The company introduced multiple products over the years that became huge successes, such as Snickers and M&Ms. As the company has grown larger over the years, it has remained incredibly private, as it “rarely interacts with the media because it wants to be known for its products rather than its executives”. In fact, there are few executive spaces in the office, as low ranking and high ranking employees sit together in the same rooms to “improve functionality and communication”.

franklin_clarence_mars
Frank C. Mars, founder of Mars, Inc.

Similarly to Hershey, Mars has received its fair share of criticism in recent years. In 2007, People for the Ethical Treatment of Animals (PETA) called for a boycott of all Mars products after accusing the company of funding experiments that kill animals such as “mice, rats, guinea pigs, and rabbits”. This gained national attention after it became known that Mars’ website claimed that the company did not allow animal research that involved the suffering of animals.

Similarly to Hershey, Mars has come under criticism before for purchasing cocoa from places that use worker exploitation techniques such as human trafficking and child labor. However, the company took significant steps towards addressing this issue. The company has attempted to comply with fair trade regulations by purchasing cocoa from suppliers who comply with their standards and by trying to provide more work opportunities to women in Indonesia. Furthermore, Mars rebranded its biggest product in Britain, the Malteser, as “Fairtrade”, encouraging its suppliers to comply with the company’s standards.

Comparing and Contrasting the Five Most Popular Chocolate Candies

In comparing the different chocolate candy brands, we see that there are key differences and similarities that contribute to their dominance of the market and differences in popularity. In fact, it is possible that sugar content is a decent predictor of chocolate popularity. Looking at Hershey’s top products – Reese’s Peanut Butter Cups, Hershey’s Milk Chocolate Bar, and Kit Kat – there are small differences in size and nutrient breakdown. Reese’s Peanut Butter Cups, at 51 grams, has 26 total grams of sugar; Hershey’s Milk Chocolate Bar, at 43 grams, has 24 total grams of sugar; and Kit Kat, at 42g, has 21 total grams of sugar. This also happens to be their order of popularity, if we recall the Fox News article.

Continuing, we see a similar trend in the Mars products: M&Ms and Snickers. M&Ms, at 48 grams, have 30 total grams of sugar whereas Snickers, at 52 grams, has 27 total grams of sugar. M&Ms are the more popular Mars product of the two according to Fox News. Thus, by synthesizing the sugar content of both the Hershey’s and Mars products, we have, in descending order:

im-mms
M&Ms, the most popular chocolate candy in America – as well as one of the sweetest.
  1. M&Ms (30 grams of sugar)
  2. Snickers (27 grams of sugar)
  3. Reese’s Peanut Butter Cups (26 grams of sugar)
  4. Hershey’s Milk Chocolate Bar (24 grams of sugar)
  5. Kit Kat (21 grams of sugar)

 

This is nearly identical to the order of popularity, with the only difference being that Snickers and Reese’s have switched spots. Unfortunately, these are too few data points to draw any significant conclusions from, and there could be a separate factor in play that is influencing both sugar content and popularity. However, there is at least some basis for this relationship.

We may take a different approach here and say that advertising has an effect on popularity. Huang and Yang examine the effectiveness of the Children’s Food and Beverage Advertising Initiative (CFBAI), a regulatory program put into place by the food industry itself, on household purchasing habits. The article finds that regulation of advertising limited children’s exposure to a wide variety of chocolate and candy brands, it did not do so for Hershey’s and Mars specifically. The results led the authors to believe that the problem wasn’t child-directed advertising but all advertising in general – although it couldn’t be proven if this would apply to the two companies.

Thus, there isn’t much evidence in support of a relationship between advertising and chocolate popularity. Still, one could ask if there are clues within the companies’ histories – unfortunately, little seems to be revealed there. The original Hershey’s bar was the oldest candy listed here, but comes in fourth. Kit Kat, the newest candy, came in at fifth. A relationship between age and popularity doesn’t seem to exist, and relationship between company and popularity also seems unfounded.

Therefore, it seems that sugar content is one of the most likely drivers behind chocolate popularity.

 Conclusion

In looking at both Milton S. Hershey and Frank C. Mars, we see two men who began seeking to build candy companies, specializing in chocolate. Perhaps that is what took their companies, Hershey and Mars, to the top of the chocolate manufacturing world – viewing their products as candy led them to sweeten their chocolates beyond what their competitors were likely to be doing. It is possible that such high sugar content contributed to their massive popularity today, as the sweetest chocolate treats seem to generate the most revenue. While the battle to preserve children’s health in the face of wildly popular sweets has most revolved around advertising, it may be useful to visit sugar content as the potential culprit.

References

http://www.foxnews.com/leisure/2015/05/19/america-favorite-chocolate-candies/

http://g.foolcdn.com/editorial/images/87976/hsy-us-chocolate-market-share_1_large.png

http://www.fool.com/investing/general/2013/12/03/heres-why-hershey-is-a-wonderful-business.aspx

https://www.thehersheycompany.com/en_us/this-is-hershey/milton-hershey.html

https://en.wikipedia.org/wiki/The_Hershey_Company#History

http://www.fastcompany.com/1693089/hershey-gets-not-so-sweet-kiss-fair-trade-month

http://www.pennlive.com/midstate/index.ssf/2012/11/hershey_fines_international_st.html

http://www.englishteastore.com/mars-history.html

http://uk.reuters.com/article/science-mars-peta-boycott-dc-idUKN0731748320071208?rpc=92

http://www.washingtonpost.com/wp-dyn/content/article/2009/04/09/AR2009040903943.html

https://en.wikipedia.org/wiki/Mars,_Incorporated

http://www.telegraph.co.uk/foodanddrink/foodanddrinknews/8789954/Maltesers-go-Fairtrade.html

http://www.mms.com/us/nutrition

http://www.snickers.com/nutritional-info

https://www.hersheys.com/fundraising/products/graph.htm

http://journals.ama.org/doi/abs/10.1509/jppm.11.114

 

 

 

 

 

 

 

 

 

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