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Solving the Billion Dollar Problem in the Cocoa Industry

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The chocolate industry is poised to change the future of the sector by working cooperatively to ensure that cocoa is sustainable. It has become clear to all of the major stakeholders that it will take billions of dollars in investment in cocoa, the vital ingredient to make chocolate, to make it sustainable for the future. More importantly, though, is the realization that the industry as a whole can save chocolate by investing in cocoa farmers and putting them first.

It may seem unlikely but in a few years there might not be enough cocoa to make chocolate unless a large-scale, coordinated commitment is made to support sustainability efforts that will ensure a stable supply of chocolate for the long-term. In fact, we estimate that demand for cocoa will outstrip supply by one million metric tons by 2020. The good news is that the major players in the industry are doing a lot of good work individually. Now, we're challenging everyone to come together to establish sustainable cocoa most effectively.

In our view, putting farmers first -- and investing in them -- is key. We must invest in cocoa research and in direct interventions, like our Vision for Change program in Cote d'Ivoire, which allows us to train farmers on modern agricultural methods that will help them triple their yields. Equally as important is implementing certification programs that can influence hundreds of thousands and even millions of farmers at scale.

Many industry stakeholders are pursuing similar, effective efforts to make cocoa sustainable. For instance, we are pleased that many of the major global chocolate manufacturers are engaging in the necessary pre-competitive programs that will make at-scale sustainability feasible. So we know the sector is taking this challenge very seriously. But while initiatives by individual companies and organizations are important, what's really required is a collective force for good; a cooperative, large-scale effort and investments that directly meet the challenges associated with cocoa sustainability.

Perhaps it's worth pondering for a moment what cocoa sustainability actually means. There are between five and six million cocoa farmers operating globally, many supporting a family through cocoa production and many struggling to make a living against issues such as aging trees, declining soil fertility and untreated pests and diseases that destroy their harvests. Unlike staple crops, cocoa hasn't always received the same intensity of research and technological development. In effect, it has not been professionalized, which has kept incomes flat for cocoa farmers around the world.

This week, Mars published its second annual Principles in Action Summary outlining our approach to business and where we are seeking the best way forward in making a difference to people and the planet through our performance and with it, an announcement that marks a shift in prospects for these farmers. We issued a call asking the industry to come together and scale-up the positive impacts we can make for farmers globally.

To that end, we also announced how much we are investing in putting farmers first and making a sustainable cocoa industry. In 2011, Mars invested $30 million in our Sustainable Cocoa Initiative and we are set to match that figure every year over the next decade. In the previous two years, we spent $20 million annually on this effort that is so critical to the future of the sector.

And this investment will chiefly be used for the benefit of the farmers who are crucial to the long-term success of cocoa sustainability. The Sustainable Cocoa Initiative is focused on three critical elements, which we feel can and will secure the livelihood of cocoa farmers: research, certification and direct intervention programs to boost productivity. It's our intention to achieve higher yields, which will in turn mean better family incomes and strengthen farming communities, all without compromising limited natural resources.

There's a lot still to do. Revitalizing the cocoa sector will require a large financial investment, matched with industry cooperation and an innovative approach. This is a serious challenge but we feel confident that the sector will rise to this challenge. The net result will undoubtedly for the common good for all.

For more information on Mars' approach to business and cocoa sustainability, as outlined in our second annual Principles in Action Summary, please go to www.mars.com/principlesinaction.

More information on the Sustainable Cocoa Initiative can be found at http://www.mars.com/global/brands/cocoa-sustainability-home.aspx and at cocoasustainability.com.

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