Marketing wizards will face intriguing challenge with luxury brand move

“A MARS a day helps you work, rest and play”, the famous advert said.

But what will the marketing boffins have in store now the confectionery giant looks set to add Hotel Chocolat, the luxury retailer and chocolatier, to its stable?

Future advertising slogans are just one of the many intriguing prospects thrown up with today’s news of Mars Incorporated’s proposed £534 million cash acquisition of Hotel Chocolat.

Mars, to the lay person at least, is best known for its eponymous chocolate bar, first manufactured in 1932, as well as popular brands such as Twix, M&MS, and Galaxy.

Such products are unashamedly mainstream and dominant players in the global confectionery category, so it is only natural to wonder how a more premium, seemingly artisanal brand will fit into its portfolio.

Addressing this point in the takeover document, Mars asserts that it has no shortage of experience in this regard, highlighting its “strong track record of nurturing entrepreneurial brands, including KIND, Nature’s Bakery and Tru Fru”.

Moreover, it declared its belief that the two companies are “culturally aligned, with shared values of quality, sustainability and purpose among their guiding principles”.

Putting such fuzzy, philosophical concepts to one side, there is no doubt Mars sees big potential in Hotel Chocolat.

The upmarket chocolatier has been through the mill in the recent past – it reported a small loss in its most recent annual financial year, as online and international sales fell and moves were made to restructure its cost base but its current year has started brightly, helped by the opening of new stores in the UK.

But while bosses at Hotel Chocolat remain convinced of its growth potential at home and abroad, they came to the view that this potential will only be realised with the resources that a company as big as Mars can provide.

The offer tabled by Mars is a sizeable premium, 168.9% to be precise, to Hotel Chocolat’s closing price of 139p per share on Wednesday, which Russ Mould of AJ Bell said demonstrated the confectionery giant’s determination to get the deal over the line, as well as the long-term prospects it sees in the company.

Susannah Streeter of Hargreaves Lansdown also acknowledged the “hefty” premium, while noting that the weakness of the pound would have “helped fuel hunger for the acquisition”.