If Only We Could Move to Mars: How One Candy Company May Be Saving Chocolate… And the Planet
Chocolate prices are rising… How is one company saving our most beloved treat AND combating climate change?
With Halloween behind us, the only thing many of us may remember is those extra few pieces of chocolate we guiltily snuck from the candy jar. But what about the cost of that chocolate? Did the jump in Halloween candy prices take you by surprise this year? It certainly surprised me.
The Problem
It turns out the surge in prices was not only your local retailer trying to squeeze every penny out of you this holiday, but in fact the effects of climate change.1 Nearly 70% of the world’s cocoa – a key ingredient in chocolate – is supplied from West Africa’s cocoa belt. Climate change has led to an increasingly hotter, drier climate that could dramatically reduce the world’s supply of chocolate if cocoa can no longer be produced in West African countries like Ghana and Ivory Coast.2 According to a new study from the International Center for Tropical Agriculture, researchers posit that higher temperatures and increased periods of drought may cause parts of the cocoa belt to become savanna by 2050 – and as researcher Christina Bunn says, “2050 is a generous estimate… most of the expected impact will happen by 2030.”3 Unless something changes, the majority of the West African belt may be unusable for cocoa farming.
So About Those Prices…
The climate in West Africa may seem worlds away, but as the cost of Halloween candy proved to us, prices are rising. The increase in retail price has varied among chocolate-makers, with some reducing the piece size and others substituting more milk chocolate for dark chocolate products.4 Still, with cocoa prices rising 40% from 2012-2014 alone, companies like Mars, Inc. have had to pass on some of this cost to us chocolate maniacs.5
Mars to the Rescue!
With $33 billion in sales in 2015, Mars is a company that has the heft to make a difference.6 One of the largest chocolate companies, Mars is feeling the effects of climate change on cocoa farming in West Africa. And better yet, Mars is doing something about it.
Cocoa farmers are at the center of the Mars supply chain. With climate change threatening the manufacturer’s ability to produce the chocolate products we know and love, Mars has committed to key initiatives in an effort to combat the grim Snickers-free future. Over five years ago, Mars enacted its “Sustainable Cocoa Initiative,” pledging to buy 100% certified cocoa by 2020 – as it stands now, it is currently the largest purchaser of certified cocoa and well on its way to the 2020 goal.7 Additionally, the initiative has led to Mars working directly with Ministers of Agriculture in Western African countries, collaborating with organizations like the World Cocoa Foundation and the United Nations to develop and enact real solutions to the cocoa problem, and investing heavily in breakthrough science like mapping the cocoa genome.8
Mars’ continued investments has led to great strides in combating the cocoa crisis. The cocoa genome project was created to decode the genome with the aim of developing trees that resist disease and drought, as well as produce more cocoa. In 2013, the project successfully sequenced the genome of the world’s most common cocoa plant and made the code publicly available.9 Since then, researchers have been hard at work to develop a more productive tree, and Mars has been working directly with West African cocoa farmers to improve farming techniques that have led to higher cocoa production on less land – reducing pressure on forests.10
Additionally, Mars hired meteorologists this fall to analyze the impacts of weather on the chocolate business. Katie Johnson, senior manager of the commercial applied research team, describes, “our meteorologists conduct analysis of weather patterns around the world to help Mars make decisions when it comes to the supply chain and sourcing of some of the ingredients for the world’s most beloved chocolates.”11 Mars’ meteorologists examine current weather patterns, and then collaborate with other departments to estimate how suppliers could be impacted by everything from a storm that could delay shipping or climate change as a whole.12
And Mars is not stopping there. Beyond its work with the cocoa industry, it set a “sustainable in a generation” goal. The company has set a zero emissions goal for its factories and offices among other targets.13 Ultimately Mars’ motivations are not selfless and by no means finished – its work is in service of preserving the cocoa supply chain and creating a more operationally efficient and sustainable business overall. Mars should, however, diversify their product offering by using carob to produce a chocolate alternative as their cocoa farming efforts may not be successful. The company is, however, leading in sustainability among its candy competitors. So next time you grab a Milky Way bar, feel a little less guilt.
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Sources:
- May, Ashley. “Halloween Candy Prices Might Scare You This Year.” USA Today. Gannett, 19 Oct. 2016. Web. 04 Nov. 2016. <http://www.usatoday.com/story/money/nation-now/2016/10/19/halloween-candy-prices-might-scare-you-year/92414946/>.
- Smith, Georgina. “Chocolate Meltdown: Feeling the Heat – CIAT.” CIAT. International Center for Tropical Agriculture, 08 Apr. 2016. Web. 04 Nov. 2016. <https://ciat.cgiar.org/climate-change/chocolate-meltdown-feeling-heat>.
- Smith, Georgina, “Chocolate Meltdown: Feeling the Heat – CIAT.”
- Schoen, John W. “Here’s Why Chocolate Prices Are up.” CNBC. Getty Images, 13 Feb. 2015. Web. 04 Nov. 2016. <http://www.cnbc.com/2015/02/13/why-are-chocolate-prices-jumping.html>.
- Schoen, John W. “Here’s Why Chocolate Prices Are up.”
- Forbes. Forbes Magazine, n.d. Web. 04 Nov. 2016. <http://www.forbes.com/companies/mars/>.
- “Cocoa Policy – Mars, Incorporated.” Mars, Incorporated. N.p., n.d. Web. 04 Nov. 2016. <http://marsgcc.com/global/about-us/policies-and-practices/cocoa-policy>.
- “Cocoa Policy – Mars, Incorporated.”
- Nieburg, Oliver. “Cocoa Genetics: Mars Unlocks Sequence to Higher Yields and Tastier Chocolate.” ConfectioneryNews.com. N.p., 03 June 2013. Web. 04 Nov. 2016. <http://www.confectionerynews.com/Commodities/Cocoa-genetics-Mars-unlocks-sequence-to-higher-yields-and-tastier-chocolate>.
- Gunther, Marc. “Why Mars is a Sustainability Leader.” MarcGunther.com. N.p., 30 May 2012. Web. 04 Nov. 2016. <http://www.marcgunther.com/why-mars-is-a-sustainability-leader/>.
- 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. <http://www.businessinsider.com/mars-chocolate-hires-meteorologists-to-deal-with-climate-change-2016-9>.
- Taylor, Kate. “The Smart Reason the World’s Largest Candy Maker Is Hiring Meteorologists.”
- Gunther, Marc. “Why Mars is a Sustainability Leader.”
You bring up some very interesting initiatives that Mars is putting in place in order to combat the effects of climate change. I think the genome project has a good chance of being effective. I recently read about a similar project undertaken for wheat which has had some early successes. The genes/polygenes that help with drought resistance have been identified for the most part–although the factors which control this are very complicated (https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3844267/). Companies have begun to develop new promising strains of wheat which have performed well in tests, such as the Bentley wheat variety developed by OSU (http://www.agweb.com/article/hungry-cattle-help-osu-researchers-discover-drought-resistant-wheat-naa-sonja-begemann/).
I think that investing even more into the genome research is the best short-term risk solution for Mars to pursue, as it will be increasingly difficult to curb the effects of climate change despite Mars’ best intentions.
I hope that the work that Mars is putting into place also can trickle down to other chocolate makers like Mondelez (Cadbury), Nestlé, and Hershey’s to save chocolate for all of us!
As a self-proclaimed chocoholic, this potential chocolate shortage is concerning! I agree with your conclusion that Mars is in fact lading the sustainability charge among other candy competitors. I just read another blog post on Hershey’s. While it is great to know they a re aware of the issue and thinking about ways to combat it, the actions they are taking seem more on the periphery than what Mars is doing.
I also really think your point on exploring carob as an alternative ingredient is a huge area of opportunity. I’m surprised that neither company is looking into that as an option, and I wonder if carob has some of its own sustainability issues as well.
Before I read the last paragraph I couldn’t help but saying to myself – what if this ruins its reputation if people misinterpret its actions as initiatives to protect its bottom line? But the fact that Mars is targeting zero emission goal for its factories is a good counter-argument.
On another note shouldn’t Mars be also concerned about the risk of having a key factory completely destroyed by a natural disaster that are becoming more and more frequent and less conventional (in terms of location)?
Really interesting post on the chocolate supply chain! I had no idea so much research was going into research on meteorology, GMOs, and other levers to mitigate risk to cocoa sourcing. One question I take away from this is whether Mars’ products are sustainable, even if they are produced in a sustainable way. Sugar-laced treats are key culprit in the increasing burden of cardiovascular disease and diabetes, which has led to skyrocketing healthcare costs. Although its obviously not possible to link Mars directly to these health concerns and their ultimate costs, I do question the premise of producing chocolate more sustainable if its used to make candy that leads to far greater downstream costs for consumer health…
Great read! I am honestly surprised by how proactive Mars has been to be a key leader in combating the cocoa crisis…likely because the cynic in me wonders if change could have happened earlier. When Mars enacted its “Sustainable Cocoa Initiative”, do you think they had prior knowledge about the potential risks to cocoa production? How long do you think they waited to develop a strategy and publicize the strategy?
Another question I had was on the use of alternative ingredients. Without having much knowledge, what are the risks (if any) associated with procuring carob? Are there other substitutes that could be tested as well?
thanks for the post – as an avid chocolate fan its good to hear someone is making an effort to make sure this great treat stays around for some time. As a leader in the sustainable production of chocolate and carbon free manufacturing plants what do you think Mars can do to help other manufacturers do the same? In a truly aligned world one would hope that every chocolate manufacturer becomes more like Mars, but part of me thinks Mars would hate to see this as they probably think of this as being a marketing advantage
Mars’s efforts to only purchase certified cocoa reminds me of IKEA’s initiative to create a more sustainable supply chain for wood. In the IKEA case, there was significant debate regarding the effectiveness of increasing the usage of recycled wood. I’d like to pose a similar question for Mars: what is the company doing to make its downstream operations more sustainable? Many types of candy wrappers are made from polypropylene, an oil or gas derivative [1]. What is Mars doing to decrease its dependence on fossil fuels in its candy wrappers? Also, since candy wrappers are usually made from a mixture of synthetic compounds, recycling them to extract useful materials is difficult and energy intensive [2]. Most waste management companies choose not to recycle wrappers. What is Mars doing to promote the recycling of candy wrappers?
[1] https://www.leaf.tv/articles/how-are-candy-wrappers-made/
[2] http://earth911.com/food/recycling-mysteries-candy-wrappers/
Awesome post laying out the challenge facing Mars, cocoa and chocolate industry. The one line that struck me was “meteorologists this fall to analyze the impacts of weather on the chocolate business,” because I never thought even a chocolate manufacturer would require that level of expertise in science and astrology. I’m curious what are the specific research results, and whether they give Mars a competitive advantage over competitors. Also, from a consumer’s perspective it doesn’t seem like the chocolates have tasted different over time, I’m curious how much innovation or change happens to the actual product and taste.
Thanks for the post!
An avid consumer of chocolate, I am intrigued by the way Mars is investing in long term initiatives to combat the risks of climate change to the cocoa industry. I’m curious to know if there were any initial health concerns in using the artificially created coca genome for mass production of chocolate? Also, have Mars and other companies begun using the genome to produce cocoa?
Additionally, since the company is dependent on West Africa for most of their cocoa supplies, perhaps they can invest in an exploration project to determine if other regions in the world can be developed for cocoa production, using the cocoa genome. This, in combination with their initiative to improve crop yield, can perhaps further reduce the risks of climate change. Would be interesting to hear your views on this!
Great post! As I read more and more posts about companies buying from “certified” sources (certified cotton, for example), I find myself growing more cynical given that many of these companies fund the certification organizations themselves, thus introducing a conflict of interest. Would love to learn more about the certification angle, as I believe if it’s done right by a non-partisan organization, it can cause lasting change in the cocoa supply chain – as it can provide market forces necessary to influence farmers to grow sustainable crops.
Thanks for your post. It’s fascinating to read about all that Mars is doing to insulate its business model from climate change and the resultant reduction in crops. I particularly appreciated your comment regarding carob and Mars’ attempt to use it as an alternative to cocoa. While we’re seeing alternative ingredients become more commonplace (almond milk, coconut oil, etc.), it will be interesting to see how companies and consumers respond as goods become less available / expensive to produce as a result of the changing climate. Hopefully we behave in a responsible, sustainable way.
Thank you for the post, I enjoyed learning about the challenges in the chocolate industry and the direct efforts that Mars in putting into solving the problem. This is a clear example of alignment of business goals and positive social impact, which I believe is the most effective and sustainable way to address social/environmental issues.
To your article, I would be interested in knowing the results that the program has generated so far and what the return has been for both Mars and its supplier. I am concerned that Mars might be too optimistic and in lack of a plan B the suppliers might soon find themselves in a non-recoverable situation and therefore unavoidably without Mars’ support. You proposed Mars alternative plan to produce an alternative to cocoa. Should Mars also help its supplier through its research to find alternative plantation that can survive the climate changes, and what would be in it for Mars?