Mars's Snickers Gets Olympic Lift

Accord to Become
Official Chocolate
Aids Sales in China

By HIROKO TABUCHI
August 22, 2008; Page B6

BEIJING -- Among the meager edible offerings at Olympics venues -- lukewarm sausages on sticks and packets of dry noodles -- is an all-American snack that is hard to miss: Shilijia, or Snickers. Fifteen years after Mars Inc. introduced the Snickers brand to China, the world's biggest-selling candy bar is finally taking off in the most-populous country.

Geoffrey Fowler/The Wall Street Journal

Snickers' Olympics sponsorship is helping propel the chocolate bar in China.

Mars has been steadily increasing advertising on its flagship candy in China, building on the success of Dove, another Mars brand, which enjoys top share here. But it wasn't until the company sealed a deal to make Snickers the Beijing Games' official chocolate that it gained traction.

Earlier this year, Mars hosted a Snickers Street Olympics tournament in Beijing of "hybrid sports" events like Basoccer, a mix of basketball and soccer with trash cans for goals, and Streetminton, a combination of badminton and break dancing.

Also offered was Snickers Jump Satisfaction, an event in which participants jumped over as many Snickers bars as possible to win them. Mars offered tickets to the real Olympic Games as prizes.

Young Chinese "flocked to the event like seagulls," says Peter Grose, chief executive of the Sydney-based advertising company ABT, a unit of Photon Group, who helped plan Snickers's marketing strategy in China.

Mars marketers say they worked months in advance with its target age group -- teenage boys -- to create a buzz around the event. It offered online games linked to the Street Olympics on a special Web site in sets of four so that they'd invite each other. Mars's sponsorship and advertising spending in China have increased fivefold since 2004, according to a Bain & Co. report published earlier this year.

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"It's all about creating a buzz," said Paulette Velasco, vice president at Helios Partners' Helios Partners China, who spearheaded the marketing initiative. Mars also approached over a hundred magazines and news outlets geared toward younger age groups to invite them to cover the street event.

The blitz is paying off. In the first quarter of 2008, Snickers sales rose 75% over the same period last year. It's now the No. 2 brand in China's three-billion yuan ($438 million) chocolate market, beating out rivals such as Nestlé's Milk Chocolate, according to Bain.

Penetrating markets like India and China is one rationale behind Mars's proposed acquisition of Wm. Wrigley Jr. Co. for about $23 billion. When approaching Wrigley earlier this year, Mars executives argued that together, they could reach these markets more effectively.

Already, about 70% of Mars's $22 billion in annual revenue is generated outside the U.S. The company, which is 100% owned by the Mars family, also sells pet-food brands such as Whiskas and Pedigree in China.

But Snickers had been slow to take off in China. One early challenge: getting the Chinese to warm to the idea of grabbing a chocolate bar on-the-go when hunger pangs struck. "Right now, people would just go have some noodles if they got hungry during the day," Mr. Grose says. "But we want to suggest that Snickers is a little more convenient."

Mars's strategy has been to focus on the target audience, rather than trying to sell to everybody, says Ms. Velasco at Helios Partners. Realizing that older Chinese might find Snickers too sweet, the company decided to first target teenagers despite their small spending power.

It's a tough battle for their pennies: Research shows many Chinese teenagers in the city spend just 10 yuan ($1.46) a day, Ms. Velasco says. So at 4.5 yuan for a bar, Snickers are a substantial purchase. And keeping costs steady amid rising commodity prices is one challenge facing the company, according to Zhang Jiantao, a Mars spokesman in Beijing.

Supplying the Olympics has been a boost, amid complaints of scarce food at many of the venues. As the exclusive supplier of chocolate to the Games, Mars's Chinese subsidiary provides Snickers to kiosks at main events, where the Snickers logo is prominently displayed.

The Olympics deal has been "an excellent opportunity" to communicate with consumers in China, Mr. Zhang said in an email.

Snickers is still a tough sell among older Chinese. "It contains too many calories. I dare not eat it," says Liu Jinghui, 30, an IT company worker.

But some teenage fans are emerging. "Snickers are great. They're my only choice when I want to eat chocolate," says Li Ying, a 17-year-old high-school girl. "But I often do not eat it, as it is a bit expensive."

--Kersten Zhang contributed to this article.

Write to Hiroko Tabuchi at hiroko.tabuchi@wsj.com

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