Going Green? Eat a Snickers.
Mars, a $30 billion manufacturer of iconic foods, ranging from Snickers to Altoids to M&Ms, has emerged as a global leader in environmental stewardship.
Go ahead – reach for that Snickers. You’re helping mitigate the impact of climate change and promote more sustainable resource use. Over the past decade, Mars Inc. – a $30B+ confectionary manufacturer – has emerged as an industry leader in responding to the risks that climate change poses to its business and operating models.
Along each step of its supply chain, Mars faces direct and indirect challenges that stem from climate change:
Exhibit 1: Indirect and Direct Impacts of Climate Change on Supply Chain
Specifically, Mars faces the greatest risk from climate change to its raw materials. Let’s delve into cacao and palm oil:
Mars buys 10% of all cacao grown, so any changes in the quality and quantity of global cacao supply have a profound impact on the company. More than 5M farmers grow the world’s cacao supply, and the yield of the crop is increasingly threatened by climate change. Let’s take West Africa, where Mars sources the majority of its cacao. According to research, climate models show expected increases in maximum temperatures in the “cocoa belt” of West Africa that would near the maximum temperature bearable by the cocoa plant. This is expected to occur in tandem with desertification – the natural conversion of forested, agriculturally-viable areas into savanna. Delving deeper, Mars sources most heavily from a region in Cote d’Ivoire where scientists project to see an 800% increase in land classified as “very low climatic suitability” for cacao.
In response, Mars has invested in technologies and training to improve farmers’ cacao yields. According to Kevin Rabinovitch, Global Sustainability Director at Mars, “yields of cocoa in West Africa could be tripled what they are today… The problem is getting the knowledge out to cocoa farmers.” Mars has established 17 cocoa development centers in Cote d’Ivoire to educate 20% of the country’s farmers by 2020. Moreover, Mars has invested in decoding the cacao genome, in an effort to develop more productive and drought-resistant crops. The company has made this research openly available, hoping that an open-source approach could speed industry progress.
Palm oil is another raw material for which Mars has adopted more stringent requirements. Research has shown that the production of 1 kg of palm oil corresponds with a carbon emission of about 2.8-19.7 kg CO2 – the volume equivalent of 300 – 2,000 balloons. This is because the production of palm oil has historically been facilitated by deforestation of tropical forests that hold large stores of carbon. In Indonesia and Malaysia, which produce 90% of the world’s sustainable-certified palm oil, an estimated 7M acres of rainforest has been cleared to make way for palm oil production.
Thus, in 2015 Mars converted to sourcing 100% of its palm oil from suppliers that meet requirements laid out by multi-lateral organization, Roundtable for Sustainable Palm Oil (RSPO.) The company goes beyond RSPO criteria by also requiring that suppliers do not develop palm oil on peatlands or in high carbon-stock forest areas.
Beyond raw materials, Mars has made aggressive commitments to eliminate GHG emissions from all operations by 2040, to buy 100% of cocoa, coffee, tea, fish and palm oil from suppliers certified as sustainable, and to provide consumers with a recyclable solution for all Mars drinks by 2020. In 2015, the company achieved its goal of sending 0% of manufacturing waste to landfills, and it has reduced water use by 17% over 2007 levels, by investing in rainwater harvesting system, wastewater treatment systems, and more efficient belt-washing systems within factories.
Are there still opportunities for Mars to further reduce its impact on the environment? Absolutely. Here are a few ideas:
- Palm Oil Sourcing: Mars currently sources “mass balance” palm oil, where sustainable-certified and non-certified palm oil are mixed together to reduce costs. However, moving to segregated purchasing of sustainable-certified and non-certified palm oil would provide even greater transparency for consumers and would promote more rapid adoption of sustainable practices among suppliers.
- Adapting the Product: Other competitors have developed heat-resistant chocolate, which reduces the risk that a chocolate-based product will melt in transit or the customer’s hands. Mars may want to consider similar adaptations to its chocolate products.
- Increased Focus on Water Reduction and Packaging: Mars missed its targets for water reduction and sustainable packaging improvements in 2015, highlighting a key area for the company to improve upon.
Overall, Mars has done an exceptional job of both mitigating and adapting to climate change. As a privately-held, family-owned business, Mars has had the flexibility to make long-term investments, without the need to appeal to shareholders’ short-term expectations. From helping smallholder farmers cope with the impacts of climate change to reducing carbon emissions, Mars is a leader in environmental stewardship – surely sweet news for all the Snickers lovers out there.
793 Words.
Sources:
- Schroth, Gotz, Peter Laderach, Armando Isaac Martinez-Valle, Christian Bunn, and Laurence Jassogne. “Vulnerability to Climate Change of Cocoa in West Africa: Patterns, Opportunities and Limits to Adaptation.” Vulnerability to Climate Change of Cocoa in West Africa: Patterns, Opportunities and Limits to Adaptation. Science Direct, 15 June 2016. Web. 28 Oct.
- Reijnders, R., and M.A.J. Huijbregts. “Palm Oil and the Emission of Carbon-based Greenhouse Gases.” Palm Oil and the Emission of Carbon-based Greenhouse Gases. Science Direct, Mar. 1008. Web. 04 Nov. 2016.
- Taylor, Kate. “The Smart Reason the World’s Largest Candy Maker Is Hiring Meteorologists.”Business Insider. Business Insider, Inc, 28 Sept. 2016. Web. 04 Nov. 2016.
- “Palm Oil Policy – Mars, Incorporated.” Mars, Incorporated. Mars, Incorporated, 2015. Web. 02 Nov. 2016.
- “Water Impact – Mars, Incorporated.” Mars, Incorporated. Mars, Incorporated, 2015. Web. 02 Nov. 2016.
- “Cocoa – Mars, Incorporated.” Mars, Incorporated. Mars, Incorporated, 2015. Web. 02 Nov. 2016.
- Gunther, Marc. “Why Mars is a Sustainability Leader.” Marc Gunther. Marc Gunther, 30 May 2012. Web. 02 Nov. 2016.
- Gunther, Marc. “The Man Who Would Save Chocolate.” Marc Gunther. Marc Gunther, 15 Sept. 2010. Web. 02 Nov. 2016.
- REW Staff. “Mars Inc. Achieves Zero Waste to Landfill – Recycling Today.” Recycling Today. Recycling Today, 1 July 2016. Web. 04 Nov. 2016.
- “WWF Palm Oil Buyers Scorecard – Mars.” WWF Palm Oil Buyers Scorecard. World Wildlife Fund, 2016. Web. 02 Nov. 2016.
- Woodall, Candy. “Hershey to Sell Heat-resistant Chocolate Bars First Made for Soldiers and Astronauts.” PennLive.com. Penn Live, 28 Dec. 2015. Web. 02 Nov.
- “Calculating Our Carbon Footprint.” Leicester County Council (n.d.): n. pag. Calculating Our Carbon Footprint Convert KWh Electricity to Kg CO 2. UK Government. Web. 04 Nov. 2016.
Thanks for this interesting article. Although I see your point of Mars having a long-term strategy on its Cocoa sourcing by helping its farmers increase yields, I don’t see how that would prevent the underlying climate change trends that impact their business model.
Although Mars might be able to maintain raw materials sourcing as desertification and climate change advances, these same trends could have devastating effects on other industries, the economy, and ultimately Mars’ customers. Of what use is having fresh Cocoa beans if there are no consumers for our product?
Although I do appreciate Mars’ initiatives towards sustainability, and I agree that the world would be a better place if more companies would follow Mars, I wonder if these initiatives are really enough?
Ryan, I loved this post! I hadn’t really put much thought into how climate change would impact Mars, other than raw material supply. I really appreciated your chart showing how they were impacted all the way down the line.
Overall, I really like what Mars is doing with the farmers. I’ve seen this with a few other companies and really appreciate how they’re not only making the planet a greener place, but also educating farmers on sustainable practices in an almost altruistic sense. I’m also glad to hear that they’re no longer doing as much deforestation to harvest their palm oil – I think rainforest deforestation was a trendy topic to talk about in the 90s and early 2000s, but hasn’t really been addressed recently. It’s good to see that it hasn’t actually fallen off the map where it matters.
I also like your suggestions as to what Mars can do to further improve. The only thing I worry about is how product adaptation will go over with consumers. As long as they maintain flavor, I think it will be okay, but I worry that the chocolate will become less flavorful, causing them to lose market share.
Who knew there could one day be a guiltless way to consume chocolate? Thanks Ryan for a fascinating – and entertaining! – take on Mars Inc.’s sustainability practices and their corresponding impacts on climate change. I’m amazed by the danger global warming poses on cacao production in West Africa, whose exports undoubtedly also serve the local economies there. To see an 800% increase in land classified as low sustainability for this critical raw material is quite alarming. So it’s comforting to see that Mars has taken a proactive role in combating the detrimental effects of climate change, including its 2020 and 2040 goals to aggressively champion sustainability and reduce emissions. I also liked your recommendations to further their eco-forward practices. Your third bullet in particular resonated, as it focused on water reduction at large, which could help tackle the overarching H2O shortage we’re globally facing (in tandem with the environmental concerns you mentioned).
Ryan, I’m so glad you wrote on one of my all-time favorites things – chocolate! Any company that is in the commodity industry is deeply impacted by the changing ecosystem as a result of climate change. Mars is no exception. I was so interested to hear how Mars has taken a bottom’s up approach to the issue and targeted the problem at the source. I loved hearing how they were educating the farmers which emphasized their commitment to the long-term sustainability of this industry, not just a short term fix to the problem at hand. Furthermore, I was very interested to hear how they are investing in R&D to produce more productive, drought-resistant crops. You wouldn’t think of a candy company as a scientific research firm but as you noted, they aren’t mutually exclusive anymore in today’s world. Companies need to become more innovative in the face of an ever changing ecosystem and I was fascinated to read about Mars’ approach.
This post excellently identifies the methods by which Mars, Inc. is reducing their greenhouse gas emissions through several portions of their supply chain, including the raw material sourcing and manufacturing. However, these aspects miss out on a very key aspect of the supply chain, which may be a significant factor in the overall company’s greenhouse gas emissions contribution. This aspect of the supply chain is distribution. The transportation industry is one of the largest contributors to global emissions, and it is clear that in order for Mars to sell their products, they will use transportation services to complete their distributions to retailers. I would be interested to hear more about how they are making efforts in this realm. Competitors for example are looking to cut costs in distribution by, “improving the efficiency of our distribution networks – making better use of space in our vehicles, avoiding unnecessary miles and using more efficient modes of transport,” as was identified by Nestle, Inc. [1]
Is Mars taking a similar approach, or have they left their holistic approach to emissions reductions open in this respect?
[1] Nestle,Transport and Distribution.http://www.nestle.com/csv/environmental-sustainability/product-life-cycle/transport, accessed November 2016.
Ryan, I was reading your post and was reminded of another article I read and wanted to comment because I think beyond the primary level of environmental impact, I think we should also consider the secondary impact of Mars on the environment because of the ingredients they use.
One of the problems I think of Mars’ candy is their environmental cost of using dairy products. As I’m sure you know cows produce an enormous amount of methane which is a very damaging greenhouse gas. While beef cattle are the largest contributors of methane with 71% of all U.S. emissions, dairy cows are the next biggest source with 24% of the share!
Beyond the greenhouse gas, dairy cows actually cause even more environmental damage due to the energy that must be used to milk the cows. Research shows that it takes 4-7kWh of electricity each week to milk each dairy cow, which includes the heating and cooling of the milk that is required to pasteurize then cool the milk for storage[2].
Altogether – I loved your post! Thanks for bringing Mars’ efforts to light. Let’s hope they continue to do more to fight climate change.
1. http://extension.psu.edu/animals/dairy/nutrition/nutrition-and-feeding/diet-formulation-and-evaluation/carbon-methane-emissions-and-the-dairy-cow
2. https://www.theguardian.com/environment/2009/aug/07/milk-environmental-impact