Mars and Nestle Interest in Gu is Justified

The apparent interest of both Mars and Nestle in acquiring the London based chocolatier Gu signifies that the chocolate and confectionery industry is still thriving amidst the recession.

 

Both Mars and Nestle would be well advantaged in buying the successful company, as a means to enter a captured market already established by Gu.  Gu manufactures chocolate pudding deserts for sale in supermarkets and though only established in 2003, has already nurtured quite a loyal consumer base, as the company has posted an average of 66% increase in sales per year since its' establishment.  

 

An acquisition by Nestle would add to its' growing line of products that are pervading several industries, including milk, iced cream, chocolate, confectionery, health and wellness products, and beverages.  Mars on the other hand, sticks to a more focused line of products that do not stray away from chocolate and confectioneries.

 

It must be noted in context Mars successfully acquired the Wrigley brand (makers of chewing gum) in recent years with assistance from Warren Buffet.  This is perceived as a wise move by a company that does not stray far from its' line of expertise.  In the same manner, the Gu brand would be better off being acquired by Mars, as it will be able to devote more of its' focused resources to improving the brand in terms of production and quality. 

 

However, the strength of Nestle in Supply Chain and Brand Management, coupled with its' huge appetite for entry into new markets, could also bode well for the brand if acquired.

 

Whatever the outcome, this is living proof that both companies see an advantage in buying Gu.