{"id":12283,"date":"2016-11-04T17:15:25","date_gmt":"2016-11-04T21:15:25","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/chocolate-lovers-beware-how-mars-inc-is-fighting-the-threat-of-a-major-meltdown\/"},"modified":"2016-11-04T17:15:25","modified_gmt":"2016-11-04T21:15:25","slug":"chocolate-lovers-beware-how-mars-inc-is-fighting-the-threat-of-a-major-meltdown","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/chocolate-lovers-beware-how-mars-inc-is-fighting-the-threat-of-a-major-meltdown\/","title":{"rendered":"Chocolate Lovers, Beware. How Mars, Inc. is Fighting the Threat of a Major Meltdown"},"content":{"rendered":"

The chocolate industry has a rocky road ahead of it. According to recent studies, global cocoa production is at risk, as prime cocoa-growing regions are under the imminent threat of climate change. While simply a guilty pleasure for some, chocolate is a serious business for many around the world. News of future climatic problems only amplify existing, unfavorable supply\/demand dynamics that are placing upward pricing pressure on the $98.3 billion global chocolate market [1]. Mars, Incorporated (\u201cMars\u201d), the number one chocolate producer in the world, is trying to get ahead of the problem, but is the company doing enough? Is the end of the cheap, quick-fix-chocolate era upon us?<\/p>\n

The Heat is On: Climate Change & Cocoa Production<\/strong><\/p>\n

While cocoa is produced all over the world, over 70% of all of the world\u2019s cocoa is grown in the West African Cocoa Belt (the \u201cBelt\u201d), a region reaching from Sierra Leone to southern Cameroon [2]. In particular, in the West African countries of Cote d\u2019Ivoire and Ghana cocoa is king. With a total production of 1,448,992 tonnes in 2015, Cote d\u2019Ivoire is the number one producer in the world, supplying 30% of the world\u2019s total cocoa [1]. Ghana ranks number two, having produced 835,466 tonnes in 2015 [1].<\/p>\n

\"cocoa-beans-2\"<\/a><\/p>\n

The Belt\u2019s naturally hot, rainy, and humid climate serves as an ideal habitat for cocoa trees. In addition to light, ample shade, and high temperatures, high humidity and rainfall patterns are perhaps the most critical climatic factors in encouraging optimal growth [3].<\/p>\n

Unfortunately, erratic rainfall patterns and rising temperatures in the Belt are challenging future growth prospects. Over the last two years, inadequate rainfall during heat waves have caused draughts and heavy, unexpected rain has destroyed flowering trees.<\/p>\n

\"climate-change-and-cocoa-chocolate-firms-action-to-temperature-rise\"<\/p>\n

Looking ahead, climate change is expected to drive increased instances of rain irregularity. Additionally, global temperatures are expected to increase by 2.0 degrees Celsius by 2050 [4]. While the higher temperatures alone are not a problem for West African cocoa trees, the accompanying increase in evapotranspiration is. As higher temperatures drive increases in evaporation and seasonal draught, soil moisture and fertility will decrease.<\/p>\n

Given these weather patterns, the International Center for Tropical Agriculture (\u201cICTA\u201d) predicts a substantial decline in West African production by 2030 and by 2050, prime cocoa-plantations will be unusable [5].<\/p>\n

\"Source:<\/a>
Source: See reference 5<\/em><\/figcaption><\/figure>\n

The timing of these climatic issues is less than ideal, as farmers are facing unprecedented global demand. Since 2012, cocoa prices have increased approximately 40% but due, in part, to hazard rainfall patterns, West African production is down, especially in Ghana [6]. World cocoa demand is forecast to outpace supply by 1 million tonnes by 2020 \u2013 that\u2019s about 90,909,090,909 Lindt balls [7].<\/p>\n

Climate-smart Chocolate<\/strong><\/p>\n

A world without chocolate can probably best be described as unlivable. As such, many experts have already begun attempting to mitigate the impact of climate change by exploring sustainability measures. These measures include improvements in shade management, soil fertility, land preparation, and water filtration.<\/p>\n

Unfortunately, approximately 97% of West African farmers have not taken advantage of any of these adaptive strategies [3]. This is because, counter to most industrialized crops, 85% of cocoa comes from small family-run farms who lack the resources and training needed to adapt [8]. As a result, as their farms dry up, they face unemployment, diminished income, decreased standard of living, and reduced life expectancy [9].<\/p>\n

Mars Fights Back<\/strong><\/p>\n

With net sales of $18.4 billion as of 2015, Mars is the number one chocolate manufacturer in the world [10]. The 100-year old company features 29 chocolate brands, including five billion-dollar household favorites: M&M\u2019s, Snickers, Dove\/Galaxy, Mars\/Milky Way, and Twix [11].<\/p>\n

\"mars-choc\"<\/p>\n

The climatic threat could have a huge impact on Mars\u2019 core business, upsetting its global pricing and supply costs. According to Barry Parkin, the company\u2019s chief sustainability officer, \u201cClimate change is absolutely a threat. And that\u2019s why we\u2019re doing all that we\u2019re doing today.\u201d [12]<\/p>\n

What exactly are they doing?<\/p>\n

For starters, they are attempting to increase farmer productivity by creating educational programs that can help smallholder West African farms improve farming practices and boost supply [13]. The company is also teaming with the World Cocoa Foundation and local governments to establish development centers and programs to train farmers [14]. By 2020, Mars hopes to reach 150,000 farmers, tripling yields [13]. Mars is also ensuring it stays informed. In September, the company hired a team of meteorologists to conduct analyses of changing weather patterns to help make informed decisions around the supply chain and sourcing of ingredients [15].<\/p>\n

So, perhaps there is hope for your sweet tooth. Mars should continue to educate local farmers, and hopefully inspire other market leaders to follow suit.<\/p>\n

Word Count: 791<\/p>\n

\n

References<\/strong><\/p>\n

[1] World Atlas, \u201cTop 10 Cocoa Producing Countries,\u201d http:\/\/www.worldatlas.com\/articles\/top-10-cocoa-producing-countries.html, accessed November 2016<\/p>\n

[2] Schroth, G\u00c3\u00b6tz, Peter L\u00c3\u00a4derach, Armando Isaac Martinez-Valle, Christian Bunn, and Laurence Jassogne. “Vulnerability to Climate Change of Cocoa in West Africa: Patterns, Opportunities and Limits to Adaptation.” Science of The Total Environment 556 (2016): 231-41.<\/p>\n

[3] Codjoe, F, Ocansey, C., Boateng, D., and Ofori, J., \u201cClimate Change Awareness and Coping Strategies of Cocoa Farmers in Rural Ghana.\u201d Journal of Biology, Agriculture and Healthcare 3.11 (2013)<\/p>\n

[4] Intergovernmental Panel on Climate Change, “Near-term Climate Change: Projections and Predictability.” Climate Change 2013 – The Physical Science Basis (n.d.): 953-1028.<\/p>\n

[5] L\u00c3derach, P., A. Martinez-Valle, G. Schroth, and N. Castro. “Predicting the Future Climatic Suitability for Cocoa Farming of the World\u2019s Leading Producer Countries, Ghana and Cote d\u2019Ivoire.” Climatic Change 119.3-4 (2013): 841-54.<\/p>\n

[6] Wexler, Alexandra. “Chocolate Makers Fight a Melting Supply of Cocoa.” WSJ. Wsj.com, 13 Jan. 2016. Accessed Nov. 2016.<\/p>\n

[7] Mathiesen, Karl. “No More Beer, Chocolate or Coffee: How Climate Change Could Ruin Your Weekend.” The Guardian. Guardian News and Media, 09 June 2015. Accessed Nov. 2016.<\/p>\n

[8] World Cocoa Foundation, \u201cCocoa Market Update\u201d, www.worldcocoa.org. Accessed Nov. 2016.<\/p>\n

[9] Ghana Business News, “The Sad Story of Ghana’s Cocoa Industry and the Way Forward.” Ghana Business News. N.p., 13 Apr. 2016. Accessed Nov. 2016.<\/p>\n

[10] International Cocoa Organization, \u201cThe Chocolate Industry.\u201d http:\/\/www.icco.org\/about-cocoa\/chocolate-industry.html. 28 Jan 2016. Accessed Nov. 2016.<\/p>\n

[11] Mars, Inc. \u201cOur Brands\u201d http:\/\/www.mars.com\/global\/brands\/chocolate. Accessed Nov. 2016.<\/p>\n

[12] \u201cAs Big Food Feels Threat Of Climate Change, Companies Speak Up.” NPR. Accessed 04 Nov. 2016.<\/p>\n

[13] Shared Value Initiative, \u201cMars Creates West African Cocoa Clusters and Increases Production\u201d https:\/\/sharedvalue.org. Accessed Nov 2016.<\/p>\n

[14] Sustainable Brands, \u201cHershey, Lindt, Mars, Nestl\u00e9 Join New Program to Help Cocoa Farmers Adapt to Climate Change\u201d www.sustainablebrands.com. Jun 2016. Accessed Nov 2016.<\/p>\n

[15] Taylor, Kate. \u201cThe Smart Reason the World’s Largest Candy Maker is Hiring Meteorologists.\u201d Businessinsider.com. Sept. 2016. Accessed Nov 2016.<\/p>\n","protected":false},"excerpt":{"rendered":"

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