Chocolate\u2019s key ingredient, cocoa, is predominantly grown within 20 degrees north and south of the equator.\u00a0 Cocoa production is largely concentrated in a few West African countries (see figure 1), namely Cote d\u2019Ivoire and Ghana, which together account for nearly 70% of global cocoa production [2].\u00a0 For Mars \u2013 maker of favorite candy confections such as Milky Way, Mars, M&M\u2019s, Snickers, and Twix \u2013 this dynamic presents a challenge to the Company\u2019s supply chain in the face of climate change.<\/p>\n Cultivatable land in Cote d\u2019Ivoire and Ghana is likely to decline, as these countries are expected to experience a temperature increase of 3.8 degrees Fahrenheit by 2050 [3].\u00a0 This increase will result in higher levels of evaporation and plant transpiration to the atmosphere without a commensurate increase in rainfall.\u00a0 Consequently, land suitable for growing cocoa will be constricted over time, as illustrated in Figures 2 and 3 [4].<\/p>\n <\/p>\n Given these challenges, Mars has outlined and begun to implement meaningful changes to secure the lifeblood of its delicious treats for years to come.<\/p>\n Chipping Away at a Chocolate Problem<\/strong><\/p>\n In September 2017, Mars CEO Grant Reid emphasized the importance of addressing the sustainability of Mars\u2019 global supply chain, saying, \u201cThe engine of global business \u2013 its supply chain \u2013 is broken, and requires transformational, cross-industry collaboration to fix it. [5]\u201d\u00a0 Mars has made meaningful commitments in the short, medium, and long term to reduce its operations\u2019 impact on climate change.\u00a0 The Company has pledged $1 billion over the next three years to its \u201cSustainable in a Generation Plan\u201d aimed at, among other things, reducing its greenhouse gas (GHG) emissions and helping its cocoa producers prepare for the realities of climate change.<\/p>\n Wind energy is a key component of Mars\u2019 GHG reductions.\u00a0 In recent years, Mars opened wind farms in Texas and Scotland, which generate the equivalent of 100% of the energy required to power Mars\u2019 U.S. and U.K. operations, respectively.\u00a0 Similar plans for wind production in Mexico are underway.\u00a0 Additionally, Mars expects to power 100% of its operations in the Czech Republic, France, Spain, and Poland with renewable energy by 2018. \u00a0This is all part of Mars\u2019 goal to reduce its GHG by 27% by 2025 from its 2015 levels and by 67% by 2050.<\/p>\n Mars is also focused on helping cocoa farmers deal with climate change.\u00a0 In July 2017, Mars launched \u201cThe Farmer Income Lab\u201d to improve \u201cbreeding, farming methods and protection against pests and disease for cocoa. [6]\u201d\u00a0 To this end, Mars\u2019 goal is to obtain 100% of its cocoa from certified sources by 2020.\u00a0 Additionally, Mars has committed to investing $280 million in Cote d\u2019Ivoire alongside the government through 2025 to advance farmers\u2019 livelihoods [7].\u00a0 By providing resources and expertise to its cocoa farmers, Mars is working to mitigate the impact of climate change on its supply chain.<\/p>\n More Work to Do<\/strong><\/p>\n To secure its long term supply chain, the Company must accelerate its involvement with local cocoa farmers.\u00a0 Today, Mars does not typically purchase raw materials from small farms, and while it has launched its Farmer Income Lab, its peers have moved more quickly.\u00a0 For instance, The Hershey Company began its \u201cLearn to Grow\u201d farmer training program in 2012, which impacted over 30,000 farmers across over 450 cocoa communities in 2015 [8].\u00a0 Similarly, Mondelez launched its \u201cCocoa Life\u201d program in 2012, which reached over 75,000 farmers in nearly 800 communities in 2015 [9].<\/p>\n In addition to enhancing its outreach to farmers, Mars needs to work directly with local governments and regulators to enhance their relationships with the small farmer communities.\u00a0 Local governments in these areas can play a meaningful role in increasing the level of engagement with small farmers, thereby accelerating the pace of potential technological change and socio-economic improvement [10].<\/p>\n Food for Thought<\/strong><\/p>\n To date, Mars has made good progress in securing its supply chain vis-\u00e0-vis climate change.\u00a0 However, questions remain regarding additional steps the Company can take.\u00a0 Namely, how can Mars reduce its overall energy footprint rather than merely offset it with alternate energy sources?\u00a0 How should Mars define success with respect to enhancing the sustainability of its small farmers and suppliers?\u00a0 And finally, how can Mars create a competitive advantage through its sustainability efforts?<\/p>\n (794 words)<\/p>\n <\/p>\n Works Cited<\/strong><\/p>\n [1] ICCO. n.d. Retail consumption of chocolate confectionery worldwide from 2012\/13 to 2018\/19 (in 1,000 metric tons). Statista. Accessed 10 November, 2017. Available from https:\/\/www-statista-com.ezp-prod1.hul.harvard.edu\/statistics\/238849\/global-chocolate-consumption\/<\/a>.<\/p>\n [2] ICCO. “World Cocoa Production by Country from 2012\/2013 to 2016\/2017 (in 1,000 Metric Tons).” Statista – The Statistics Portal, Statista, www.statista.com\/statistics\/263855\/cocoa-bean-production-worldwide-by-region\/, Accessed 10 Nov 2017<\/p>\n [3] Scott, Michon. 2016. “Climate & Chocolate | NOAA Climate.Gov”. Climate.Gov. https:\/\/www.climate.gov\/news-features\/climate-and\/climate-chocolate<\/a>.<\/p>\n [4] L\u00e4derach, P., A. Martinez-Valle, G. Schroth, and N. Castro. 2013. “Predicting The Future Climatic Suitability For Cocoa Farming Of The World\u2019S Leading Producer Countries, Ghana And C\u00f4te D\u2019Ivoire”. Climatic Change 119 (3-4): 841-854. doi:10.1007\/s10584-013-0774-8.<\/p>\n [5] 2017. “MARS CEO: INDUSTRY MUST FIX \u2018BROKEN\u2019 ENGINE OF GLOBAL BUSINESS TO TACKLE URGENT CLIMATE & SOCIAL THREATS”. http:\/\/www.mars.com\/docs\/default-source\/Press-Releases\/sig-press-release-final.pdf?sfvrsn=4<\/a>.<\/p>\n [6] “Farmers Income Lab \u2013 Helping Smallholder Farmers \u2013 Mars, Incorporated”. 2017. Mars, Incorporated. http:\/\/www.mars.com\/global\/press-center\/newsroom\/smallholder-farms-research<\/a>.<\/p>\n [7] “MARS LAUNCHES FARMER INCOME LAB TO TACKLE ISSUE OF SMALLHOLDER FARMER INCOME”. 2017. http:\/\/www.mars.com\/docs\/default-source\/default-document-library\/farmer-income-lab_press-release_0710201734e2a95e0e2967c1ba01ff19007138ba.pdf?sfvrsn=0.<\/p>\n [8] “Learn To Grow Cocoa”. 2017. Corporate. https:\/\/www.thehersheycompany.com\/en_us\/responsibility\/good-business\/creating-goodness\/learn-to-grow.html<\/a>.<\/p>\n![\"\"](\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2017\/11\/Cocoa-Production.png\")
<\/a><\/a><\/a>