M&M’s Caramel Wins New Product Pacesetter Award, a CPG Success Story Years in the Making

In 2016, Mars M&M’s brand bet big on caramel, with a $100M investment in new manufacturing technology that allowed it to fill M&M’s with an ooey-gooey center. Mars Chocolate Vice President of Research and Development Hank Izzo explained to CNN Money:

“It was a big technological challenge for us. We never before had a M&M lentil [center] with a true soft center, so we had to figure out how to not make the chocolate too sticky or too soft that it could collapse.”

Thus was born M&M’s Caramel, which became a 2019 IRi’s New Product Pacesetter. The candy ranked #2 in Food and Beverage and #5 in C-Store, with a combined $169M in annual sales.

M&M’s Caramel was introduced to the world at the 2016 NACS Show (National Association of Convenience Stores). At the time,Food Business News described the launch:

“Considered the biggest launch in brand history, M&M’s Caramel chocolate candies are slated to hit shelves next spring. The candies feature a creamy caramel center covered in milk chocolate and a candy shell…. Traditional yet trendy caramel is the fastest growing flavor segment in food, rising 15% last year, according to Nielsen. Moreover, Mars Chocolate North America found in consumer research that M&M’s Caramel had the highest purchase intent of any M&M’s brand variant ever. Among chocolate brands in the United States, M&M’s has the highest household penetration and the highest rate of loyalty, according to Nielsen data.”

After the product launch, M&M’s embarked on a marketing campaign called #UnsquareCaramel, which included this video:

To Combat Busy, Stressed Lives, Consumers Seek Out Indulgent Treats… In Moderation

Each year, CPG big data firm IRi reveals its New Product Pacesetters Report. The latest report names M&M’s Caramel, along with other indulgent treats. IRi research reveals that consumers feel indulgence in moderation is a way to cope with life and reward themselves:

“Perhaps overrepresented — accounting for nearly $800 million in sales — in New Product Pacesetters are indulgent items (top food Pacesetter Kinder Joy, M&M’s Caramel, Duncan Hines Perfect Size for 1, Hershey’s Gold, Ben & Jerry’s Pint Slices, Blue Bunny Frozen Bunny Snacks, Hostess Bakery Petites, among many others), which consumers turn to as a reward for keeping up with their own fast-paced lives and continuing a trend of the last couple of years — consumers allow for indulgence as part of their overall eating mindset.”

M&M’s Smart Product Innovation Combines Consumer Insights with R&D for $169M Annual Sales and Pathway to Future Growth

A scan of M&M’s Caramel reviewers on Target’s website show that consumers do in fact consider the new M&M’s variant to be indulgent, and a good size for snacking:

M&M’s are hard to beat…a long time favorite. The caramel drop hidden in the center is a nice surprise. I enjoy having a few for a quick treat, so I keep a bag handy at home and in my desk at the office.

My family and I love caramel M&M’s. This bag didn’t last long in my family of five. The caramel is so good and satisfying. We will definitely being getting more of these for family treats.

These M&M’s taste good. They have just the right amount of milk chocolate and caramel. They are a good snack when you want just a little chocolate as a treat. They are bigger than a regular M&M. More like the size of a peanut M&M.

Mars M&M’s Capitalizes on Technology Investment to Introduce Another Enticing Flavor

Three years after the successful launch of M&M’s Caramel, the brand announced another new flavor to great fanfare on Instagram and Facebook—M&M’s Fudge Brownie.

M&M’s Smart Product Innovation Combines Consumer Insights with R&D for $169M Annual Sales and Pathway to Future Growth

This candy is similarly-sized to its caramel cousin, and also includes a soft center. M&M’s was able to capitalize on its technology investment to bring new, enticing flavors to fans.

Izzo confirms that the M&M’s brand:

“Regularly plays around with the size, shape, color and texture of M&M’s.”

For M&M’s Caramel, this success story was many years in the making. The brand identified a promising flavor for a soft and chewy center, completed extensive R&D and enjoyed high sales of the caramel flavor in the years since the product became available. Building on the new capability, M&M’s is set to release a new soft and chewy center, and it’s easy to imagine other squishy, soft flavors in the future. It’s great to see a case of smart product innovation that understands consumer motivations and delivers a pipeline for future growth.