Confectionery and food giant Mars Inc has said the chocolate industry will be “under pressure” by 2020 if the issue of depleting cocoa supplies is not addressed.
Speaking at an industry conference in Dublin last week, Daniel Vennard, global sustainability director for brands at Mars, told attendees cocoa farmers in countries such as Vietnam, the Philippines and the Cote D’Ivoire were starting to move away from the sector.
Go deeper with GlobalData
“The farmers that grow [cocoa] work very hard to earn a living. However, their incomes and yields have really stagnated and declined in some places over the years and farms often need severe rehabilitation, they have ageing trees, they have depleted soil and crop pests that are often on the rise. They also have undependable rainfall.”
Vennard suggested farmers are turning elsewhere to make a viable living, either to a different crop or leaving farming altogether and moving into urban industries.
“We are finding that a number of farmers are looking at their plantations and asking themselves, is this a viable crop for me to be in, is this something that is going to sustain my livelihood, sustain my love and also sustain my children and the next generation?”
Vennard said it has created “a real problem” for Mars, given the increased demand for chocolate globally.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalData“By 2020 we predict that the chocolate industry is going to be under real pressure,” he told attendees. “We think that demand will outstrip supply by 1m tonnes per year, which, putting it into perspective, is the amount produced by the biggest single origin in the world, the Cote D’Ivoire. So it’s a significant problem for us and for farmers around the world.”
Mars, however, believes it can help resolve the issue through “mutuality in productivity”, based around a series of “key pillars”. The most important of which, Vennard says, is scientific research and certification.
“We think if we can help farmers become more productive, then in turn they will produce higher yields, and they will be able to produce enough supply needed for the industry.”
In 1980, Mars built a development centre in Brazil, which is used for scientific research into crops and better variants for farmers. The confectioner has also partnered with the US Department of Agriculture and IBM to “help map the cocoa journey”, working with scientists globally to develop better production practices.
As at the end of 2012, 17 Cocoa Development Centers (CDCs), aimed at providing farmers with the tools, techniques and training to cultivate high-quality yields, had been opened by Mars and its key collaborators in the Ivory Coast.
Certification, Vennard says, is also key. In 2009, Mars committed to sourcing 100% certified cocoa by 2020. Mars is among a number of global confectioners that have made similar commitments.
“We see this as an important scalable model that we can apply across the industry that has social, environmental and also productivity practices that we think are critical for the industry,” Vennard told attendees. “We currently source about 90,000 tonnes [of cocoa] which makes us the largest buyer of sustainable cocoa in the world: about 20% of our supply. We are also working with some of our competitors who are making a similar global commitment to overhauling the whole industry.”
Vennard was speaking at a conference held by Ireland’s Bord Bia in Dublin where executives from companies including Tesco and Kerry Group, as well as the Irish government, gathered to discuss the development of sustainable food practices.
Vennard said in order for the Mars business to be successful, it needs to “ensure the success of all the stakeholders across our supply chain”.
“The world in which we operate today is facing some particular issues, what we call at Mars, the grand challenges. In summary, how do we preserve the environment for future generations, how do we spread prosperity and growth more universally and how do we feed more than 7bn people whilst also addressing issues such as obesity?”
He added: “Driven by our purpose and our values, we really feel that we have a responsibility to work in this area, to apply our concept of mutuality, not only to our direct employees and our direct sourcing partners but also to the wider society and the plant. To use the scale that we have generated over the years and the freedom that our private ownership offers us to make a real difference to people and the planet.”
Mars published its third Principles in Action Summary in July, providing an update on its sustainability efforts in its own operations and supply chains, along with progress against targets set in 2011, including its commitment to eliminate all greenhouse gas emissions by 2040.
just-food recently interviewed Mars’ chief sustainability officer Barry Parkin to discuss the US food giant’s work on issues including cocoa sourcing. Click here to read more.
