Confectionary giant Mars is making strides to ensure its vast operations are on a sustainable footing

Mars, the confectionary giant, might seem as though it is from another planet with its lofty Five Principles, which include “mutuality” and “freedom”. How does the company stack up in practice on the corporate social responsibility front?

From a huge wind farm in Texas to a non-deforestation policy, and certification and traceability goals for raw materials, it is clear that Mars’s efforts go far beyond window dressing. Yet the company admits that the nature of many of its products means it also has a role to play in trying to limit the global obesity epidemic.

Based in McLean, Virginia, Mars, which is ranked by Forbes as the third biggest privately owned company in the US, has net sales of more than $33bn a year. These stem from six sectors: chocolate, petcare, Wrigley’s, food, drinks and symbioscience – its health and life sciences sector. Mars has had a UK base since 1932, and today there are about 4,000 Mars employees in the UK. The company employs about 75,000 people worldwide, about one-third of them in the US.

As well as the flagship Mars bar, confectionery brands known across the company’s major markets include Twix, Galaxy (also known as Dove), Snickers and M&Ms. The pet food labels Whiskas and Pedigree, and food brands Uncle Ben’s and Seeds of Change, are among its other well-known products.

In July, Mars outlined progress on a range of sustainable business initiatives – and highlighted areas where major challenges remain – in its fourth annual Principles in Action Summary. Paul S Michaels, co-president of Mars, described it as a “clear-eyed view of both successes and gaps yet to be filled”.

Cocoa harvest

On the plus side, Mars is now the world’s biggest purchaser of cocoa from certified sources, with these comprising 30% of total volumes against a 2020 goal of 100%. The company is also taking various steps to counter the global shortage of the commodity, most of which is grown by about 5 million smallholder farmers in West Africa, south-east Asia and the Americas.

As the chocolate industry grows, farmers are struggling with unproductive, ageing cocoa trees that they often cannot afford to replace. The Mars Sustainable Cocoa Initiative not only encourages others in the industry to commit to certification but also runs breakthrough research to improve cocoa breeding, farming methods and protection against pests and diseases. The company claims that such methods can help triple yields within three to five years, directly boosting income and living conditions for farmers and their families, including improving access to health and education services.

Mars Chocolate has built 20 cocoa development centres (CDCs) in partnership with international donor agencies and governments, with 35 more planned for 2014. These provide farmers with the tools, techniques and training to cultivate high-quality yields. Farmers can use planting materials from CDCs to establish cocoa village clinics – local nurseries that facilitate the commercial distribution of cocoa plants, providing an additional source of income.

Coherent strategy

Barry Parkin, chief sustainability officer at Mars, says the company is increasingly using a combination of innovation and collaboration to keep the “mutuality of benefits to all stakeholders”, which was first described by Forrest Mars in 1947, at the heart of its operations. Parkin, who is also chairman of the World Cocoa Federation, highlights the sequencing of the cocoa genome by Mars, IBM and the US Department of Agriculture (USDA), a two-year project that was completed in 2010.

By analysing the DNA of hundreds of cocoa trees in South America, Mars scientists identified 10 distinct structure groups of the tree and their exact origins. To allow scientists to apply this knowledge for the benefit of cocoa growers, the genome findings have been shared through the Public Intellectual Property Resource for Agriculture (Pipra) and the Cacao Genome Database. The gene sequences will not be patented.

“The partnership blends our cocoa expertise with the USDA Agricultural Research Service’s experience with other crops and IBM’s technology, demonstrating the role business can play in addressing global issues. Our research has identified more than 35,000 unique genes within the cocoa genome,” Parkin says.

The research will lead to quicker, more accurate breeding and allow farmers to plant better-quality cocoa that is healthier, stronger, highly productive and more resistant to pests and other threats, he says. “In terms of mutuality and collaboration this is one of the finest examples, with partners from industry, government and academia being brought together and the findings being made publicly available.”

Energy efforts

Large scale renewable energy projects such as the wind farm in Texas – a partnership with Sumitomo Corporation and BNB Renewable Energy – will play an increasing role in the company’s energy strategy in years to come. The Mesquite Creek wind farm will reduce Mars’s greenhouse gas footprint from direct operations by 24%, Parkin says, by producing electricity equivalent to Mars’s needs across all 70 of its US facilities.

“We will continue to buy electrical energy locally but offset that with renewables. This is a much more efficient way to reduce carbon emissions than lots of small scale projects,” Parkin says. Further plants could be wind or solar, depending on local conditions in other parts of the world. At the same time, Mars is investing in new technology and efficiency practices to reduce energy consumption at its production facilities.

Deforestation pledge

The company’s deforestation policy is also a landmark, Parkin says, and sourcing policies on pulp and paper, soya and beef will be formulated by the end of this year alongside its new palm sourcing policy, which was introduced early in 2014. “Our palm oil is already 100% certified but the certification code doesn’t go far enough,” Parkin says. “You need to boost that with additional elements and complete traceability, and we are committed to traceability back to the mills by the end of this year.” The company has taken advice on its policy from NGOs including WWF, Greenpeace, the Rainforest Action Network and the Forest Trust.

“One of the things we sought to do was not just clean up our supply chain but try to drive change through our tier 1 suppliers,” Parkin says. “So we are insisting on them making similar commitments. We will move volume if they do not comply – we have to use our commercial power to drive change as we only want to work with suppliers that share the same values.” Significant progress with some suppliers is already visible, he says, “so we are pleased that our efforts are helping to drive change more broadly”.

As well-known brands, the likes of Mars can encourage commodity suppliers to raise their game and create a “race to the top”, with increasing standards spreading throughout the value chain, Parkin says. If economic growth can be decoupled from environmental impact, then GDP development can be a key factor in lifting people out of poverty, he says. “Ultimately you want a company that is delivering a positive impact to the planet and to the people in its value chain.”

Mutual benefits

The mutuality described by Forrest Mars in 1947 is still at the heart of what Mars is trying to do, Parkin says. “These are extremely hard challenges but we need to try to live up to that ambition.”

On water, the company is in the process of developing commitments and goals and is making decent progress on reducing usage. “Over the next two years we will be making a series of commitments on a broader range of raw materials and issues, with a more holistic approach towards sustainable sourcing,” Parkin says.

In terms of the content of some Mars food and confectionery products, Parkin says the company is “of course concerned” about global obesity and recognises that it has a role to play in striving to limit that. “We will continue to try to improve the nutritional content, but chocolate products, for instance, must retain their quality as a great tasting treat. The key is eating in moderation as part of a balanced diet,” he says. As for advertising chocolate and confectionery, Mars was a leader in its commitment not to target children. “Pretty much all other companies have followed our lead there,” Parkin says.

Many of these issues need to be tackled in partnership with other stakeholders, including other companies, Parkin says, and the company is determined to collaborate wherever possible. “We believe it’s best to treat these areas as pre-competitive space. I’m very encouraged by the willingness of different groups to come together on many of these issues and build trust.”

Seal of approval

Solidaridad, an international NGO that campaigns for sustainable supply chains around the world, praises Mars for its example on cocoa, particularly in Ghana and Ivory Coast. “We engage with about 125 companies globally and within those we have identified 10 first movers: these are structurally and strategically engaged with sustainability,” says Nico Roozen, Solidaridad’s executive director. “Mars is one of them and we have very close co-operation with them.”

Likewise, Bastien Sachet, director of the Forest Trust, has no doubts about the strength of Mars’s commitments on deforestation, traceability of raw materials and the social impacts of food production. “The great thing is that Mars and most of their suppliers are now aligned in their vision, whereas before, it was a fight to see who was responsible for paying the premium of RSPO [the Roundtable on Sustainable Palm Oil], for example,” says Sachet. “And now that some big traders like Cargill and Wilmar have committed to the same standards, it makes it easier for Mars and other companies to implement. But there’s still plenty to do in the coming months and years.”

Whiskas saving big cats

In July 2014 Mars Petcare (via cat food brand Whiskas) expanded Mars’s support for the WWF Tigers Alive scheme, a global conservation programme to help protect tigers from extinction and to double their numbers by 2022. A “zero poaching” drive will complement a “landscape” initiative to help identify safe spaces for tigers in the wild.

The partnership, which started in the UK last year, will be rolled out in Germany, Switzerland and Belgium before the end of 2014, with the ultimate goal to create a global programme.

In the first year $1.5m was raised for projects including supporting the Terai Arc Landscape (TAL) on the border of Nepal and India. This is one of 12 priority tiger landscapes where the species faces loss of habitat due to farming, unsustainable development and poaching.

Money raised by Whiskas last summer in the UK for TAL has gone towards the creation of 17 community-based anti-poaching units, totaling 94 members.

(Source: Mars)

Facts & Figures

In 2009 Mars committed to buying 100% certified cocoa by 2020. It is the only major food manufacturer now working with all three main certification organisations: UTZ, the Rainforest Alliance and Fairtrade International.

In 2010 Mars signed a Memorandum of Understanding (MoU) with the minister of agriculture of Ivory Coast, which allows it to work directly with the Ivorian government on productivity projects for farmers.

Mars collaborates with chocolate industry competitors that share its views. It has signed MoUs with cocoa suppliers Barry-Callebaut and Ecom to expand its programmes in Ivory Coast, and congratulated Ferrero and Hershey on becoming the second and third major manufacturers, respectively, to commit to 100% certified cocoa.

The popularity of Maltesers, the third biggest confectionery brand in the UK, has led to an increase in total UK sales of chocolate from Fairtrade-certified cocoa by 10%, Mars says. “We are seeking opportunities to scale up our use of Fairtrade certification in the longer term to help us accomplish our 2020 target.”

(Source: Mars)

cocoa  confectionary  food and drink  food companies  Mars  Responsible Business Strategy 

comments powered by Disqus