When was the last time you used, or even saw, a coupon for candy bars or chewing gum? Yet couponers would never pay full price for snacks like Pringles or Pop-Tarts. The latest big grocery brand buyout could determine whether deals on all of those products are more commonplace, or harder to find.
The candy company Mars announced yesterday its plans to purchase Kellanova for about $36 billion, nearly two years after Kellanova was created amid the breakup of the Kellogg company into two separate spinoffs focused on cereal and snacks, respectively.
Kellanova got the snacks. And now Mars is getting Kellanova. And shoppers are left wondering, what’s in it for them?
Mars is not particularly big into coupons. It does offer occasional coupons during candy-themed holidays like Easter and Halloween, but not very often otherwise. While Kellanova hasn’t offered a paper Sunday insert coupon since its creation, and its printable coupon site currently has but a single offer for Pringles or Cheez-It snack packs, it does offer frequent digital coupons and cash-back offers on rebate apps like Ibotta and Checkout 51, as well as in-store sales that don’t require a coupon at all.
“We’re returning to the type of price promotion activity more or less that we saw pre-pandemic,” Kellanova CEO Steve Cahillane told investors earlier this month. That, however, is after several rounds of price increases. “Consumers are getting more used to these prices,” Cahillane insisted. For those who haven’t, now would seem a good time to grab their attention with more promotions.
As for Kellanova’s soon-to-be new owner Mars, it hasn’t commented on its promotional plans for its new acquisition. But it has commented on prices. Speaking to Reuters, Mars CEO Poul Weihrauch pledged to hold prices steady and not pass on costs from the deal to consumers.
Some shoppers are skeptical, though. “How does Mars expect to make $36 billion back on this purchase except by passing higher prices on to consumers?” one Reddit commenter wondered. Another asserted that “corporations buying each other up reduces competition and leads to higher prices,” while yet another lamented that “Cheez-Its are going to cost $12 a box now.”
The potential upside of the deal is that a larger company can implement more cost-saving efficiencies. And its relationships with retailers can get more of its products onto more shelves, so it can make money from greater sales volume rather than by raising prices.
The companies are also promising their combination will result in “enhanced consumer-centric innovation” and “enhanced digital capabilities,” so there may be future benefits to consumers beyond prices and promotions.
The sale is expected to close in the first half of next year. So we’ll have to wait til then to see whether Mars is ready to embrace coupons, cash back and promotions to the extent that its new acquisition has. But when it comes to retaining loyal customers who like deals on their Eggo waffles and Cheez-Its, Mars has 36 million reasons not to disappoint them.
