Mars

Mars, Incorporated is a giant in the global food industry, a privately owned American powerhouse famous for its confectionery delights (think M&M's, Snickers, Skittles), pet care products (Pedigree, Whiskas), and food brands (Ben's Original). As a private company, Mars is owned by the descendants of its founder, Franklin C. Mars. This is the crucial point for ordinary investors: you cannot buy its shares on a public stock exchange. Unlike a public company such as The Hershey Company or Nestlé, whose stock is available to anyone with a brokerage account, Mars's ownership is kept within the family and a small group of insiders. So, while you can enjoy a Mars bar, you can't own a piece of the company that makes it. This makes Mars a fascinating case study for investors, a “ghost” of the stock market that embodies many qualities that value investing practitioners seek, even if it remains tantalizingly out of reach.

The simple answer is that the Mars family has chosen to keep the company private. This decision has profound implications. Public companies sell shares to the public through an Initial Public Offering (IPO) to raise capital and create liquidity for their owners. In return, they must comply with strict regulations, including disclosing their financial results every quarter and answering to a diverse group of shareholders who often prioritize short-term gains. By remaining private, Mars sidesteps this entire circus. The company is not beholden to Wall Street's quarterly earnings expectations and can focus on a long-term strategy that spans generations, not just financial quarters. This freedom allows them to make bold, long-term investments in their brands and operations without worrying about a temporary dip in the stock price.

Even though you can't invest in Mars directly, it offers invaluable lessons for building a successful portfolio. Think of it as the perfect specimen to study in a lab.

Warren Buffett loves companies with a wide economic moat—a durable competitive advantage that protects a business from competitors, much like a moat protects a castle. Mars is a textbook example of a company with a formidable moat built on two key pillars:

• Iconic Brands: Brands like M&M's, Snickers, and Pedigree are deeply embedded in our culture. This brand loyalty gives Mars significant pricing power (the ability to raise prices without losing customers) and ensures a steady stream of revenue.
• Scale and Distribution: As a global behemoth, Mars has an unparalleled distribution network. Getting its products onto millions of shelves in over 180 countries is a logistical masterpiece and a massive barrier for any up-and-coming competitor to replicate.

The Mars family's multi-generational approach to business is the embodiment of long-term thinking. This is the holy grail for value investors. Public markets can be notoriously short-sighted, punishing companies that invest heavily for future growth if it means sacrificing today's profits. Mars, on the other hand, can reinvest its earnings patiently, nurturing its brands and acquiring new ones (like the purchase of Wrigley) with a view to dominate for the next 50 years, not just the next fiscal year. This strategic patience is a powerful engine for creating sustainable value.

So, how do you find the next best thing? You look for publicly traded companies that share Mars's winning characteristics. Your quest is to find businesses in the consumer staples or consumer defensive stocks sectors that exhibit:

• A portfolio of dominant, timeless brands.
• A wide and defensible economic moat.
• A history of consistent profitability and prudent capital allocation.
• Management that thinks and acts like long-term owners.

Companies like The Coca-Cola Company, Procter & Gamble, or Nestlé S.A. often fit this description. By studying the blueprint of a private champion like Mars, you can become much better at identifying public champions you can actually own.