{"id":11182,"date":"2016-11-04T13:21:31","date_gmt":"2016-11-04T17:21:31","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/chocapocalypse-is-chocolate-endangered\/"},"modified":"2016-11-04T13:21:31","modified_gmt":"2016-11-04T17:21:31","slug":"chocapocalypse-is-chocolate-endangered","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/chocapocalypse-is-chocolate-endangered\/","title":{"rendered":"Chocapocalypse: Is Chocolate Endangered?"},"content":{"rendered":"

The future of your favorite candy may be in danger. Snickers and M&Ms are household brands that we naturally associate with chocolate. Although most consumers may not connect climate change with the chocolate industry, Mars Company and others are increasingly focused on the sustainability of the ingredients that go into their iconic products.\u00a0 \u201cWeather has a much larger, longer-term impact on business that isn\u2019t getting the attention it deserves,\u201d says Greg Harnish, Mars Chocolate North America\u2019s commercial vice president [1]<\/sup>. In fact, Mars has its own dedicated team of meteorologists to help executives make critical supply chain and sourcing decisions. The Mars meteorologists examine current weather patterns and coordinate with other departments to work around potential supplier disruptions [1]<\/sup>. These events range from thunderstorms to more dramatic shifts in weather, which call into question the sustainability of chocolate manufacturing and procurement practices.<\/p>\n

Demand for cocoa is rising at a rate of 2% each year and the world could face a shortage in supply by 2020 as shown in Figure 1[2]<\/sup>. Expected temperature increases, a result of climate change, are projected to have a significant impact on farmers. Cocoa trees are sensitive to shifts in weather patterns such as droughts, rain, wind, and fluctuating temperatures, which can negatively impact crop yields [3]<\/sup>. As a result, areas that are currently ideal for cocoa cultivation may become unusable in the not so distant future. The Cacao tree thrives in humid and rainy climates with nitrogen-rich soil such as C\u00f4te d\u2019Ivoire, Ghana, and Indonesia and these countries will likely undergo a 3.8\u02daF increase by 2050[4]<\/sup>. This shift will result in atmospheric moisture loss and decrease the amount of usable land for cocoa farming. In fact, 10.5% of locations examined show increased suitability for cocoa production, while the remaining 89.5% will become less suitable by 2050 as shown in Figure 2[4]<\/sup>.<\/p>\n

Figure 1:<\/p>\n

\"consumption\"<\/a><\/p>\n

The World Bank<\/p>\n

Figure 2: Suitability of Cocoa Cultivation<\/p>\n

\"sustainability\"<\/a><\/p>\n

Climate.gov<\/p>\n

Although meteorologists at the Mars Company are able to accurately predict current weather patterns to accurately inform short-term strategy, the Company is seeking proactive ways to address long-term climate change concerns and finding ways to minimize the gap between future chocolate supply and demand. In 2008, Mars launched the Cacao Genome Project with IBM and the US Department of Agriculture to \u201csequence, assemble, and annotate the genome of the cacao tree\u201d [5]<\/sup>. The Company has shared this genome research to allow breeders to find ways to make the tree less susceptible to climate change and hopefully enhance yields for farmers.<\/p>\n

\"coffee\"<\/a>\u00a0<\/em><\/p>\n

Mars Website<\/p>\n

On a more comprehensive level, Mars created the Sustainable in a Generation Program to reduce emissions and fossil fuel energy use to zero by 2040. The Company plans to achieve this goal with a four-pronged approach[6]<\/sup>:<\/p>\n

    \n
  1. Operational Efficiency<\/u><\/strong>: Cut down energy and water usage and waste through organization changes to processes<\/li>\n
  2. Capital Efficiency<\/u><\/strong>: Invest in efficient equipment and processes<\/li>\n
  3. New Technology<\/u><\/strong>: Innovate and deploy new innovations<\/li>\n
  4. Renewable Energy<\/u><\/strong>: Partner with others to generate cleaner power<\/li>\n<\/ol>\n

    As of 2015, the Company has successfully reduced total energy usage by 5% and fossil fuel usage by 18% vs 2007 levels [7]<\/sup>.<\/p>\n

    In addition to the various climate change initiatives that Mars has put in place, the Company should take additional steps to ensure predictable and high-quality procurement. Mars can invest in its cocoa farmers, affording the Company a predicable supply by reducing the risk of price fluctuations and shortages. Mars can also benefit from process synergies by sharing best practices with its partner farmers. According to chocolate producers, farmers could grow 1,500 kilograms per hectare if they have access to the right resources and best practices whereas the current output is 500 kilograms per hectare [8]<\/sup>. By partnering with or acquiring these suppliers, Mars can work with farmers to increase yields and work towards more sustainable methods to produce cocoa.<\/p>\n

    Word Count: 641<\/p>\n

    [1] Kate Taylor, \u201cThe Smart Reason the World’s Largest Candy Maker is Hiring Meteorologists, Business Insider, September 28, 2016, http:\/\/www.businessinsider.com\/mars-chocolate-hires-meteorologists-to-deal-with-climate-change-2016-9, accessed November 2016.<\/p>\n

    [2] \u201cSimeon Ehui Global Agriculture Practice Manager for Africa The World Bank Group\u201d, in WCF\u2019s Partnership Meeting & Cocoa Sustainability Trade Fair 2015 Conference, Washington, DC. June 30-July 1 2015, pp 25, 39.<\/p>\n

    [3] \u201cCocoa Market Update\u201d, worldcocoafoundation.com, April 1, 2014, http:\/\/www.worldcocoafoundation.org\/wp-content\/uploads\/Cocoa-Market-Update-as-of-4-1-2014.pdf, accessed November 2016.<\/p>\n

    [4] Michon Scott, \u201cClimate and Chocolate\u201d, Climate.gov, February 10, 2016, https:\/\/www.climate.gov\/news-features\/climate-and\/climate-chocolate, accessed November 16, 2016.<\/p>\n

    [5] Mars Company, \u201cEnvironment\u201d, http:\/\/www.mars.com\/global\/science-and-innovation\/science\/environment, accessed November 2016.<\/p>\n

    [6] Mars Company, \u201cOperations\u201d, http:\/\/www.marsgcc.com\/global\/sustainability\/operations, accessed November 2016.<\/p>\n

    [7] Mars Company, \u201cEnergy-Climate\u201d, http:\/\/www.marsgcc.com\/global\/sustainability\/operations\/energy-climate, accessed November 2016.<\/p>\n

    [8] Alexandra Wexler, \u201cChocolate Makers Fight a Melting Supply of Cocoa\u201d, The Wall Street Journal, January 13, 2016, http:\/\/www.wsj.com\/articles\/chocolate-makers-fight-a-melting-supply-of-cocoa-1452738616, accessed November 2016.<\/p>\n","protected":false},"excerpt":{"rendered":"

    The future of your favorite candy may be in danger. Snickers and M&Ms are household brands that we naturally associate with chocolate. 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