Candymaking giant Mars plans to spend $1 billion over the next three years in its pet care division to hire 300 more tech workers and enhance its digital chops, including adding more artificial intelligence.
The company says that 70% of the financial commitment will go to hiring, upskilling, and bringing in third-party vendors, including consultants, to make its dog and cat food unit more digitally oriented. The spending commitment is a "significant acceleration" to what the division had previously budgeted for all things digital, according to Mars, which declined to provide any further details.
The remaining 30% of the funds are earmarked for spending on generative AI, data management, e-commerce, and other emerging technologies. Mars is also using some to expand the fleet of electric vehicles it uses from Swedish startup Einride, with plans to put 300 trucks on the road in Europe by 2025.
With around 100,000 associates already working for Mars's pet care division globally, the hiring figure is relatively small. But Mars says that adding more data engineers, data architects, and digitally focused product developers and managers is key to support the company’s goal of doubling digital sales by 2030 from today’s level.
Ikdeep Singh, global president of Mars Pet Nutrition, says one big change the company made was to the C-suite reporting structure for IT leaders. Until recently, chief information officers in the pet nutrition arm had reported to chief financial officers. They now report to division presidents, a nod to the greater focus on adopting new technologies, rather than the more traditional focus on running IT operations in a manner that prioritized cost savings.
“The upskilling starts at the top,” Singh says.
Pet food brands owned by Mars include Pedigree and Iams. Industry data shows that Mars's pet business and rival Nestle's Purina PetCare rank atop the world's largest pet food companies, each generating annual sales of around $20 billion. The next-closest rivals, including Hill's, General Mills, and Diamond Pet Foods, all report sales under $4 billion.
While American shoppers are projected to spend $150.6 billion on pet food, pet medicine, vet care, and other pet-related services in 2024, Mars and other so-called “Big Kibble” brands are facing pressure from upstarts like The Farmer’s Dog and BarkBox. Many of the newer brands were built online first, often focusing on monthly subscription services, which have been more popular with younger pet owners. COVID-19 led consumers to do more online shopping, and those habits have stuck even after the pandemic has subsided. To better compete in e-commerce, Mars in 2022 acquired direct-to-consumer pet food brand Nom Nom.
“We have seen all these digital habits stick,” Singh says. “It’s become even more critical” to invest more in AI, e-commerce, and other digital tools to follow consumers.
An estimated 48% of pet owners are Gen Z or millennials, according to data by the trade group American Pet Products Association. Singh says Mars should focus more efforts on using AI for product development, marketing campaigns, and in the supply chain to address younger customers who are gravitating to social channels like TikTok and Instagram to learn more about pet ownership, nutrition, and vet care.
“Pet parenthood is expanding,” Singh says. “More young consumers are coming in.”
So far, Mars’s AI initiatives have focused on relatively standard applications for a large consumer products business. The company is beginning to test the integration of generative AI tools that can glean insights from nutrition research journals, social media, and Mars's own data to recommend future innovation in pet food. Mars is also using AI image recognition tools to make more accurate veterinary care diagnosis.
During our conversation, Singh declined to name any AI vendors that Mars is working with. In the past, the company has talked about a close partnership with Microsoft, and earlier this year, Mars opened an AI lab at the candy maker's office in New Jersey to encourage more exploration of the technology. No concepts from the AI lab have been made public.
John Kell
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