The fortress-like building at 6885 Elm Street in McLean has no sign indicating it's the headquarters of a multinational corporation. As you approach the building, the only clue suggesting the presence of Mars Inc. is the warning: "Private Property."
One of the best-kept business secrets in Washington is the presence of this family-owned corporation in the Virginia suburbs. Few Washingtonians realize that the country's fifth-largest private business is headquartered here. The Mars company and the family that owns the candy giant have turned secrecy into a way of life.
Mars Inc. is the largest privately owned business in the Washington area, although only a few hundred of its employees work here. It produces four of the country's top ten confections: Snickers (number one), M&M's Plain and Peanut (numbers three and four), and Milky Way (number seven). The company also manufactures snack foods and ice-cream novelties, including Dove bars. Leading subsidiaries of the Mars company include Uncle Ben's, maker of the country's most popular processed rice, and Kal Kan Foods, a top pet-food business. Worldwide, the company owns 51 plants in 31 countries. Estimated revenues in 1994: $11 billion.
Mars Inc. is in its third generation of family leadership. Forrest Mars Jr., 64, is chairman of the company, CEO, and co- president with his brother John, 60. Their sister, Jacqueline Mars Vogel, 56, works in the business and also sits on the board of the company, which their 91-year-old father, Forrest Sr., gave them in 1973. Together, they are trying to identify fourth-generation family members who eventually may take the helm of Mars Inc.
The older members of the mars family seem uncomfortable with a place in the Washington business world. Their family wealth is conservatively estimated at $14 billion, but privacy is their religion. They reject any leadership role that would thrust them into the spotlight.
In the late 1980s, shortly after the Mars family was added to the Forbes list of America's 400 wealthiest individuals and families, Jacqueline--known as Jackie--found herself seated at a dinner party near Malcolm Forbes, the magazine's publisher. Incensed over what she perceived as the magazine's violation of her family's privacy, she threatened to leave the party if the hostess did not switch her to another table.
The Mars family did not inherit its love of anonymity from the company's founder. Frank Mars, who started the company in the early 1920s after failures in candy manufacturing and distribution, relished his role as a business leader. In 1923, the Milky Way bar became Mars's brightest star. By the early '30s, Frank had opened his Oak Park, Illinois, plant to tours.
Frank and his second wife, Ethel Healy Mars, enjoyed their wealth and easily adapted to the role of social luminaries. In the worst days of the Depression, Frank and Ethel enjoyed being chauffeured around Chicago in a $20,000 Deusenberg town car. They purchased two getaway homes, giving them names that left no ambiguity as to their owners' identity. One, dubbed Marlands, was in Wisconsin's lake region, a few hours from Mars headquarters, then in Chicago. The other was a 2,700-acre Tennessee showplace, Milky Way Farms Racing Stables. The Marses had more than 100 employees at Milky Way. Their tasks included hand-raking fields where the registered Hereford cattle grazed and polishing the stalls of polished oak that housed yearling thoroughbreds.
Frank and Ethel opened Milky Way to the public for fundraisers and public events. Ethel's station in mint-julep society was assured when her horse Gallahadion won the Kentucky Derby in 1940.
As a young man, frank's son, forrest Mars, was quite unlike his father and stepmother when it came to living the good life. While establishing a European division of the company in the '30s, Forrest was so parsimonious that his father-in-law sailed to England to insist that Forrest's wife, Audrey Meyer Mars, return to the United States with their young children.
Public relations was not one of Forrest's strengths. During World War II, Reader's Digest published a story that praised converted rice and highlighted in particular Forrest's Uncle Ben's brand. As a result, the US military approached Forrest and asked him to share the Uncle Ben's patents with other rice manufacturers to maximize the amount of processed rice available to American troops. Forrest resisted the appeal, and the war ended before he could be forced to share his secrets with competitors. The lesson Forrest Sr. took from this, and taught his three children, was that publicity, even good publicity, could have bad consequences.
Forrest Sr. eventually loosened up and learned to enjoy his wealth. In the late '40s, he bought a 740-acre farm in The Plains, in Virginia's hunt country, and dubbed it Marland, in homage to his father's vacation home. It was only an hour's drive from National Airport, giving Forrest easy access to the New Jersey M&M plant. Subsequently, he moved the company's headquarters from Chicago to 15th Street in downtown DC.
The farm was big, as were the 300 steers and the hogs there that were fed the imperfect M&M's that Forrest had shipped from the New Jersey plant.
Nothing was wasted, for Forrest was still frugal. He raised his three children--Forrest Jr., John, and Jackie--to be the same way. Despite their attendance at such exclusive boarding schools as Hotchkiss and Miss Hall's, on weekends at home they worked at farm chores to earn spending money. Daughter Jackie, the youngest, was never expected to work in the family business, but her two brothers knew they would have to earn the respect of their father if they wanted to have any chance of succeeding him.
Forrest Sr. acquiesced to an interview with Candy Industry & Confectioner's Journal in 1966, after years of requests by the publication. Though favorable, the profile enraged Forrest, who felt he had been misquoted and misunderstood. In the nearly three decades since then, he has kept his promise never to give another interview.
He avoids photographers, too. Although he and Audrey lived apart for much of their marriage--while he was in The Plains, she kept a penthouse apartment at the Watergate--he would come to town at her request to escort her to the National Symphony Ball. Audrey would be dropped at the front of the building and enter the party alone. Forrest would enter through a side entrance to avoid photographers and slip into the ballroom through the kitchen. One of the few pictures of Forrest taken there shows him holding a napkin over his face in an attempt to avoid being caught by a flashbulb.
The transfer of power at mars from Forrest Sr. to the next generation was not smooth. The patriarch would not hesitate to ream out John and Forrest Jr., sometimes calling them stupid in front of fellow executives.
There was the time Forrest Sr. arrived at John's plant opening in the Netherlands and, seeing a fence he deemed unnecessary, kicked it down while berating John in front of the assembled dignitaries.
The brothers still wince at the mention of their father's name, and Mars managers know better than to bring up the topic of Forrest Sr. While with their father a few years ago, John lost his temper and wheeled around to face the elderly man. "How long do I have to work for you, Dad?" shouted the son, who was close to 60 years old.
The intergenerational tension has not kept John and Forrest Jr. from emulating their father in one way: publicity-shyness. Neither will talk to the press or allow himself to be photographed for publication. A few years ago, Forrest Jr. was spotted in National Airport by a business acquaintance who called to gain his attention: "Forrest! Forrest Mars!" Forrest strode over and rebuked the man: "Don't ever call out my name in public!"
Even attorneys for the law firms here that represent the Marses can be frustrated by their inability to get information from the company. Mars executives are taught that loose lips not only sink ships but produce pink slips. Travel plans are to be kept confidential. If David Badger, Mars manager in charge of sales in Russia and Eastern Europe and the first husband of Jackie Mars Vogel, plans to fly to Stupino, Russia--where Mars is building three plants to produce Russian favorites Snickers and Mars bars, as well as rice and pet-food products--he knows not to mention the trip to his colleagues. The headquarters staff is aware that a casual question about an executive's travel location would be met with an admonition. That people disappear for periods of time to unknown locations is only one of the reasons the McLean headquarters office is nicknamed "The Kremlin."
Jackie mars vogel, now in the process of divorcing second husband Hank Vogel, is the only Mars sibling whose lifestyle even comes close to reflecting her billionaire status. She has put her estate in Bedminster, New Jersey, up for sale at $2 million and has bought a place in The Plains called Stonehall Farm, several miles from where she grew up at Marland. She also maintains her late mother's penthouse in the Watergate, where she is a next-door neighbor of Robert Strauss, the high-profile lawyer and former ambassador to Russia. Her father has sold Marland and now lives in Miami.
As philanthropists, the Marses set no records for generosity. In 1993, when its revenues were estimated at $12 billion, the company gave only $600,000 for distribution through the Mars Foundation. Checks from the foundation tend to be spread around and written for relatively small sums. Forrest Jr. and John are focused on business, so Mars charitable interests are usually administered by their wives or by Jackie.
The National Symphony Orchestra has received larger donations from board member Virginia Mars since she divorced Forrest Jr. in 1990. In the past, Virginia's gifts were constrained by her husband. Now that she has won $50 million as part of her divorce settlement, she is free to donate to the symphony as she wishes.
One cause the family foundation supports is cancer research. In September, Jackie chaired an American Cancer Society polo benefit in Virginia. It was held in memory of her mother, Audrey, who had established cancer societies in Asia, Australia, and Europe. Before the USA-Scotland polo match began, Jackie and Virginia were conveyed around the field by a team of four Cleveland Bay hunters in a circa-1900 carriage while guests applauded.
Mars answers allegations of cheapness by maintaining that it makes anonymous contributions. "That's a bit of a dodge," says a local philanthropist.
The company doesn't encourage its executives to be active in community affairs, and it's unlikely to hold any diversity training sessions. An English executive reported that when Forrest Sr. was scheduled to visit the plant in Slough, workers of color were asked to take the day off. Some Mars employees have said that the atmosphere in the company's US offices makes African-American employees uncomfortable.
Last year a Mars employee who was disabled by an accident in the McLean headquarters building, and who now must rely on a cane for support, was offended when John called her a "cripple" and referred to an employee with partial vision as a "one-eyed jack" in front of Mars associates. Several weeks later, John approached the woman. "I guess I shouldn't have said what I did," he said without further apology.
The contemporary Marses rarely spend a lot of money on themselves. Forrest Jr. lives in Rosslyn's Weslie condominium, where the price of a two-bedroom apartment is about $500,000. He lives there alone. He divorced Virginia, his wife of many years, to marry Deborah Adair Clarke, with whom he became involved while she was working at Mars headquarters. Deborah now lives in France and works for the Mars company there.
John and wife Adrienne recently put their five-bedroom house in Chain Bridge Forest on the market for $650,000. With their children grown, the house is too large for them. They're planning a move to smaller quarters in an area condominium. The Chain Bridge house was offered by listing agent Pat Derwinski of Weichert Realtors, who handles realty transactions for all area Mars employees.
Neither Forrest's nor John's dwelling is the sort where you would expect a billionaire to live. A recent tour of John's up-for-sale house, which was comfortably but not extravagantly appointed, required prospective buyers to make a quick two-step around an awkwardly placed refrigerator before entering the tiny kitchen.
The mania for keeping a low profile sometimes has economic consequences for the family business. Since the 1980s, the Marses have been nervous about losing market share to Hershey. The decade began with a blunder when Mars turned down the opportunity for an M&M's product placement in Steven Spielberg's blockbuster movie E.T.
Although the company has loosened up since then--it now promotes M&M's through licensing of stuffed animals, bed linens sold through Sears, and a children's picture book entitled The M&M's Brand Counting Book--real damage was felt when Spielberg substituted Hershey's Reese's Pieces for M&M's as the lovable extraterrestrial's favorite treat. Sales of Reese's Pieces jumped following the release of E.T.
Since that episode, the company's market share has fallen. Mars candy is in second place in the US market, with a market share of 23.2 percent compared with Hershey's 26.6 percent, according to Food Data Base. (Nestlé is a distant third, at 10 percent. Worldwide, however, Nestlé is king, with revenues of $42.8 billion in 1994.)
As recently as 1979, Mars enjoyed a full 14-percentage-point lead over Hershey. That a relatively small company like Hershey--whose sales are virtually limited to North America and whose 1994 revenues were $3.6 billion, compared with estimated revenues for Mars of $11 billion--could ascend over the larger Mars company was a bitter morsel for Mars to swallow.
Mars is also losing customers in the dog-eat-dog pet-food market. Of the Mars subsidiaries, only the Uncle Ben's brand is holding steady.
A measure of the Mars company's own view of its financial condition is the increases over base salary it pays to employees. Historically, when goals have been met, Mars workers and managers have earned as much as 16 percent over their base salary. For the last several years, sales-based increases for managers have hovered at around 10 percent. In fact, Washington Business Journal has estimated that Mars revenues fell by $1 billion between 1993 and 1994, from $12 billion to $11 billion.
Although the corporation shies away from public disclosure, it does not hesitate to try to influence lawmakers. Mars is considered one of the most effective American companies at having its positions articulated on the Hill. This fall, the Florida Sugar Cane League was feeling bruised and battered from its battles with Mars and others that were pushing the Republican Congress to permit the import of unlimited amounts of foreign sugar.
The next generation of family members may want to avoid controversies over sugar imports and other headaches associated with running a multinational company in a highly competitive food market--especially given that all ten children of the fourth generation have trust funds. Seven of them--Forrest's four daughters and John's daughter and two sons--have worked for Mars. Jackie's three children have not shown any interest in the family business.
Although the kind of criticism that the brothers took from their father has not been revisited upon their own children, the competition between the two brothers, which has caused fissures in the ranks over the years, is also being played out in the following generation.
The Marses seem certain to keep the company in family hands. They would rather sell out to a larger company--such as Nestlé--than consider taking the company public, even if they could retain a share of the business. Public disclosure, required of a company listed on any stock exchange, would be torture for this family.
Mars managers assume that John wants the company to stay in family hands so it can be passed on to sons Frank--who has worked at the company's "Ethel M'' plant in Nevada--and Mike, who is running a packaging company that sells styrofoam and other materials to the Mars company. John's only daughter, Linda, who is reserved like her father, is living in Arizona and raising horses.
Forrest's daughters--Victoria, Valeria, Pamela, and Marijke ("Markie")--are considered more seasoned than their male cousins. Pamela is stationed in the Mars office in Australia that exports to Asia. Forrest, for his part, would like to see the company end up being run by one or more of his daughters.
In terms of privacy, the fourth generation of Marses may not differ from their parents. When a local photographer recently snapped four attractive young women standing together at a Middleburg party, he asked them their names.
"We're the Mars sisters," replied Forrest's daughters.
"Well, what are your first names?" asked the photographer.
The young women became coy. "If you know that we're the Mars sisters, then you should know that we won't tell you our first names."
Then they laughed and, turning as one, walked away.