Mars doubles down on premiumisation to drive growth

Mars premiumisation strategy: overview

• Mars is shifting towards premium chocolate through innovation and acquisitions
• Hotel Chocolat acquisition gives Mars credibility in high-end confectionery segment
• Consumers increasingly favour higher-quality products, prioritising experience over quantity
• Premium confectionery demand rising globally, driven by income and Western influence
• Big confectionery players are moving upmarket, intensifying competition in premium segment

Mars, Inc. is doubling down on one of the most powerful food and beverage trends of the decade – premiumisation.

The world’s biggest confectionery company is elevating its core brands through better-quality ingredients, unique formats and luxe packaging.

And this is most obvious in chocolate, with brands like Galaxy (known as Dove in the US and Canada) growing beyond chocolate bars to include more high-end options such as seasonal gift sets and limited editions.

The confectionery giant is also focusing on flavour innovation to lift consumer favourites like Snickers and Twix, with dark, white and regionally-inspired variants hitting the shelves.

But it’s not just about revamping its existing portfolio. In 2024, Mars bought luxury chocolate brand Hotel Chocolat.

Mars and Hotel Chocolat

Mars’ decision to snap up British chocolate maker Hotel Chocolat signals the multinational’s commitment to premium confectionery.

This isn’t a short-term strategy that can be abandoned if the premiumisation trend slips into decline – it’s a deliberate move to reach a greater share of the market and change the way shoppers see Mars.

Hotel Chocolat’s vertically integrated model, with direct sourcing, in-house manufacturing and a strong direct-to-consumer presence, contrasts sharply with Mars’ traditional scale-driven approach.

The acquisition also gives Mars access to a different kind of consumer relationship. Hotel Chocolat has built its brand on experience-led retail, personalisation and storytelling around provenance and ethics – areas in which mainstream confectionery brands have often fallen short.

“For Hotel Chocolat, premium is built on a clear philosophy,” says Teresa Peck, head of global category strategy at Hotel Chocolat. “We want to provide our customers with an experience when they enjoy our premium products – a sense of escapism.”

Leveraging this expertise could allow Mars to inject greater authenticity into its wider premium push.

Having said that, Mars will need to take care when growing the London-based business. Scaling a luxury brand without diluting its exclusivity is notoriously difficult, particularly within a CPG giant known for mass-market efficiency. The risk is that over-integration could undermine what makes Hotel Chocolat distinctive in the first place.

Mars is yet to reveal how far it will scale the brand internationally or how closely it will align operations, leaving questions unanswered over whether Hotel Chocolat will remain largely independent or become a platform for broader premium expansion.

Though the boutique chocolatier would likely push back on any attempts to dilute its standards, as Peck says, the quality of ingredients has always been “paramount”.

And the tie-up offers huge potential for Hotel Chocolat, with Mars’ ability to finance innovation on a much greater scale.

The premiumisation trend

Mars’ move towards premiumisation comes as little surprise, as the premium market is booming.

Rather than buying more, many shoppers are buying better, as quality trumps quantity. This shift reflects a broader change in consumer attitudes towards indulgence, where factors such as ingredient provenance, ethical sourcing and overall experience are becoming just as important as price.

Premium confectionery has shown “significant growth” in recent years, says a spokesperson for industry analysts Fortune Business Insights. What’s more, that growth is happening right across the globe, with demand in developing regions showing “rapid growth” due to increasing Western influence, rising disposable income, increased international trade and geographical expansion by major players like Mars. Meanwhile, in mature markets, consumers are trading up for higher cocoa content, cleaner labels and more sophisticated flavour profiles.

And this is great news for manufacturers, who continue to deal with mounting cost pressures. Rising cocoa prices and input costs are squeezing margins across the industry, making premiumisation an increasingly attractive way to protect profitability. By encouraging consumers to trade up, brands can offset inflation while maintaining value growth.

The race to trade up

Mars’ recent moves show that premiumisation is a key part of its strategy.

And it’s not alone. The Big Five have all invested in higher-quality ingredients, more sophisticated flavour profiles and stronger brand storytelling to justify higher price points.

From Mondelēz International expanding its premium chocolate portfolio to Ferrero Group’s continued focus on gifting, the competitive landscape is moving up.

This collective push reflects a shared recognition that growth in confectionery is increasingly coming from trading up, not trading out.