Mars, the global candy and pet care giant, has announced a $1 billion investment over the next three years aimed at enhancing the technology within its pet food division. This move will see the hiring of 300 additional tech workers and the integration of more advanced digital capabilities, including artificial intelligence (AI).
Focus on Digital Transformation
Mars plans to allocate 70% of this investment towards hiring and upskilling tech talent, as well as engaging third-party vendors and consultants. This significant financial commitment underscores Mars' intention to accelerate the digital transformation of its dog and cat food unit, with the ultimate goal of doubling digital sales by 2030.
AI and Emerging Technologies
The remaining 30% of the investment will be directed towards implementing generative AI, improving data management, expanding e-commerce capabilities, and exploring other emerging technologies. Mars is also investing in expanding its fleet of electric vehicles in Europe, utilizing trucks from Swedish startup Einride.
Shifting IT Focus
Mars is reorganizing its internal structure to emphasize technology adoption over cost-saving measures. IT leaders now report directly to division presidents rather than chief financial officers, indicating a shift in focus towards innovation and digital initiatives. Ikdeep Singh, Global President of Mars Pet Nutrition, emphasizes the importance of top-level upskilling to drive these changes.
Competitive Landscape and Market Trends
Mars' move comes as the pet food industry, which is dominated by Mars and Nestlé's Purina PetCare, faces increasing competition from digital-first upstarts like The Farmer’s Dog and BarkBox. With an estimated 48% of pet owners being Gen Z or millennials, Mars aims to leverage AI and digital tools to engage with younger consumers who are increasingly turning to online platforms for pet-related information and purchases.
AI Applications and Future Innovations
Mars is beginning to integrate AI into various aspects of its business, including product development, marketing, and supply chain management. The company is testing generative AI tools to analyze nutrition research, social media trends, and internal data to inform future product innovation. Additionally, AI image recognition is being used to enhance veterinary care diagnostics.
The Broader Context
This strategic investment by Mars reflects a growing trend among companies to leverage AI and digital technologies to stay competitive in a rapidly evolving market. As the digital transformation accelerates across industries, companies like Mars are taking proactive steps to adapt and thrive in the new digital landscape.