E.T. : M&M’s vs.Reese’s Pieces

Reading Time: 3 minutes, 5 seconds

E.T. the Extra-Terrestrial was a colossal movie blockbuster success in 1982. It surpassed Star Wars as the highest grossing film of all time. The movie still sits 7 on the inflation-adjusted all-time highest grossing film list. According to a Rotten Tomatoes survey, it ranks as the greatest science fiction film ever made. E.T. was selected for preservation in the National Film Registry, for being “culturally, historically or aesthetically significant.” In other words, the movie was a huge deal. One of the side folklore stories to come out of E.T. was the use of Reese’s Pieces over M&M’s in the film. This side story is the topic of discussion for this post.

During Production of E.T., Amblin Productions (the makers of the film) approached Mars Inc. (the makers of M&M’s) about a possible tie in between the movie and the candy. Inexplicitly Mar’s turned down the offer! Now there was never any formal statement that Mar’s gave to explain the rejection of the offer. Rumor is that Mar’s didn’t want M&M’s associated with a movie about an alien, didn’t like the script, thought the film would bomb or a combination of all three things. Either way, it was a hard pass by Mar’s Inc, for reasons we will never know.

Amblin then pivoted to its second option Reese’s Pieces made by Hershey. Hershey accepted the deal before Amblin could fully pitch the offer to them. The parameters of the agreement were, Hershey did not have to pay for Reese’s Pieces to be featured in the film, in return, Hershey agreed to promote E.T. with $1 million worth of advertising and Hershey could use E.T. in its ad’s. A win, win for all involved.

For those of you who don’t remember the plot of E.T., Reese’s Pieces were used by the Character Eliot to lure E.T. out of hiding. Within two weeks of the movie’s premiere, Reese’s Pieces sales blew up! There’s a dispute about the actual numbers, but its estimated sales went up 65% to 85%. This was a massive win for Hershey because, before the movie, Reese’s was an afterthought in the candy market and only kind of known in the U.S. market. After E.T., though? Reese’s was a globally recognized brand. The power of marketing and branding, right?

M&M’s has recovered nicely and is one of the most recognizable candy brands in the world. Ironically their name brand is still higher than Reese’s Pieces. M&M also has some of the catchiest and chic candy commercials today. Yet Mar’s made a huge mistake passing on putting M&M’s in E.T.

Mistakes Were Made:

Product placement in movies was nowhere near as prominent as it is now. Today even the crappiest of films will have all type’s of product placement, but in 1982, the idea of product placement was still in its infancy. A lot of older companies are slower to embrace or try innovation. Especially the companies who are on top in their field. I’ve told this tale in my stories of Blockbuster and Kodak, same theme. New marketing idea, older company passing on it and wham huge mistake made.

One thing that’s even truer in modern corporate society is that you always have to be up to date and ready to use new innovations. If you stay pat and try to ignore it, some young upstart will embrace it and eat you alive. It’s survival of the fittest in the corporate world, and you have to adapt or die.

Not only did Mar’s mistake cost it money, but it also enabled and strengthened a rival product. M&M’s wouldn’t have even considered Reese’s a rival before E.T. The error was like a double loss because not only did it miss out on a gift opportunity but also inadvertently enabling a competitor to pounce on the chance and see its status grow and change because of that opportunity. It’s the equivalent of a front running politician debating against some also-ran who’s barely known by the public. All the act does is raise the also-ran’s profile, but he can also peel off voters from the front runner to him. It’s a lose, lose situation for the front runner. In hindsight, if Mar’s were more Machiavellian, it would have just taken the offer to block others from getting it and prospering from it, I mean its what Bill Billichek would have done.

Though Mars survived the blunder and is still thriving, the number one lesson from this story is to embrace innovation and get out in front of it. Otherwise, you will be sitting on the sideline watching a rival take off or worse yet become obsolete.