Case Study: Mars chocolates' sustainability achievement
When Mars Chocolates announced plans back in 2007 to become more sustainable and achieve zero waste to landfill targets, among other ambitions, it was probably written off by many as a PR move, with little substance behind it.
Ten years on, Mars Chocolates has irrefutably proven that even an energy-intensive manufacturing supply chain such as its own can be made sustainable, and the initiatives its pursuing at its factory in Dubai have laid the groundwork for many of the sustainable goals set out by the Dubai Municipality.
Which is why, in September last year, when it announced its ‘Sustainable within a Generation’ plan, the world took note, because this is a manufacturer that has already achieved more sustainability within its supply chain in ten years than most companies would in 100.
Waste water plants return all water used on-site into irrigation-grade fresh water.
“The key point in the way that Mars has constructed its supply chain over the last decade or so is that it’s a family-run business,” says Vivian Maduray, factory director, Mars GCC. “It was founded in 1911 and is now being run by the fourth generation of the same family, and they want future generations to be around to continue to run it.” And of course the only way for future generations to inherent control of Mars Chocolates is for the global economy to become more efficient, and crucially, more sustainable. Being a family-run business also gives the company more control over how it reinvests its profits.
Mars GCC stores all raw ingredients and materials on-site.
“We are a private company, we don't have shareholders, so we have the freedom to define the destiny of our local markets,” explains Christine Greaves, external affairs manager, Gulf and Pakistan, Mars GCC. “So if we want to reinvest from our profits, we are able to do that at a local level. We are able to make that decision rather than going to shareholders, so that gives us a lot of freedom and efficiency in the way we run our business.” And Mars has put its profits to work globally, investing in environmentally-friendly policies, such as wind and solar farms, and in community initiatives at the source of its supply chain.
“Mars actually drove the African Orphan Crops Consortium, so we do a lot with cocoa, coffee and tea farming communities,” says Greaves. “We help them build and thrive in their community by training farmers in how to increase their yields. We teach them the science behind increasing the yield of crops and how to look after their crops.” It’s a mutually-beneficial investment, because the farmers are able to sell more cocoa per season, and Mars is able to purchase at a lower per-unit cost because of economies of scale.
According to Maduray, this is an example of the three-pronged approach that Mars has taken to making its supply chain more sustainable. “We have a policy on zero waste so we find solutions to either recycle or responsibly destroy all waste from our operations, we have a policy to reduce greenhouse gas emissions from our factories by 25% and we have certified sources for our products to ensure there is no deforestation, child labour and other forms of exploitation within our supply chain,” he explains. “We are on track by March 2020 to have that fully in place in all our cocoa sourcing for the chocolate products, and fish sourcing for our pet food products.”
It takes time to certify all of its suppliers because of the highly complex nature of Mars’ global supply chain. “We have more than US $33 billion in sales and we are manufacturing in 73 countries around the world, with 413 factories and offices in a total of 91 countries,” explains Greaves. “We do have global contracts in place for the main ingredients going in our chocolates, such as cocoa powder, cocoa butter and hazelnut, but as much as possible we try to source locally to invest in our local communities, but also to make our supply chain more efficient, because if we source from closer to the market there’s less transportation required.”
In the Middle East market, all sugar comes from local sugar suppliers, and the packaging is produced in the UAE, Saudi Arabia and Egypt. The cocoa power, cocoa butter, hazelnut and a range other ingredients are shipped in through Jebel Ali Port and then delivered to the factory in JAFZA, which doubles as a manufacturing and storage site. “We don’t store the finished products here in great quantities though,” explains Maduray. “Our 3PL partner is just across the road and they collect the chocolates and take it to their facility almost as soon as it’s produced.”
In the UAE market, Mars is working with GAC. The decision to work with a 3PL was taken largely as a result of Mars’ target of achieving a more sustainable supply chain, because storage space on site had to be given over to other facilities such as a waste incinerator and water treatment plant.
Boniface Kimonyi, environment and sustainability officer, Mars GCC (left), Christine Greaves, external affairs manager, Gulf and Pakistan, Mars GCC (centre) and Vivian Maduray, factory director, Mars GCC (right).
It’s these facilities that make Mars’ Dubai factory truly impressive, because they are part of a global effort by the chocolate manufacturing giant to take its ‘heavy industry’ operations, with energy-intensive processes and waste runoff, and make them green. When these effort were first tackled at the Dubai site in 2007, Boniface Kimonyi, environment and sustainability officer, Mars GCC, says it felt like ‘Mission Impossible’.
“In 2007, Mars globally sat down and looked at the impact we have on the environment and broke it down into three key areas, energy use, water use and waste,” he explains. “We set targets around the baseline in 2007 and our aim is to make sure that by 2040 all the energy we use is from a sustainable source, that all the water we use leaves the site in the same quality as when it arrived, and that no waste is sent to landfills. Back then it really felt impossible.”
To put the scope of Kimonyi’s challenge in perspective, he was responsible for a factory that produced 2% of Mars’ global chocolate volume, while accounting for 36% of all waste generation.
“So the waste was the biggest challenge,” he says. “We started recycling everything we could, segregation bins and transporting it to the recycling sites in Dubai and we produce compost and incinerate anything that can’t be recycled or repurposed as fertilizer. And the incinerator has the highest standard of scrubbers and filters to ensure that no harmful emissions are being produced.” The on-site incinerator is used as a ‘last resort’ when no other use can be made of waste, everything else is recycled. Even the plastic wrappers are used in the production of garden furniture.
“What we have also done is look at how our chocolate waste can be used as a source of energy,” Kimonyi adds. “We’ve put a lot of effort into turning chocolate waste into animal feed, into fertilizer and into fuel. We have pioneered here in Dubai the use of chocolate as fuel in one of the cement factories. This has been highlighted by the Dubai Municipality as an initiative that other food producers in the emirate should be pursuing.”
To eliminate water waste, Mars GCC has developed a water treatment plant on-site at its JAFZA factory, where water run-off is treated. “We wanted to do this because the amount of water we use is huge, we need it for cleaning our tanks and pipes, but it ends up highly polluted with chocolate waste and chemicals,” explains Kimonyi.
The water treatment plant is currently able to treat the water back to irrigation standard and Mars supplies it to a third party that uses it for their own agriculture needs. The knock-on effect is that if more manufacturing companies were doing this in Dubai, a lot less water would need to be produced through desalination, which would decrease the emirate’s energy consumption and in turn its carbon emissions.
“For this reason we’re sharing our findings with other companies in the free zone to help them make their operations more sustainable,” says Greaves. “There’s no point having a sustainable business without a sustainable planet, Mars can’t make that change on its own.”
Finally, the factory has a rooftop solar plant, where 400 solar panels supply 5% of its energy needs. This is where Mars is facing its greatest challenge, because the energy required to heat the chocolate during the production process, and cool it for packaging and transport, is huge. In Europe and North America, around 50% of its energy needs are met through renewable sources and by 2020 it will be energy-neutral in those markets.
A challenge that holds the Middle East market back is the local climate. “Refrigeration accounts for around 50% of our entire energy use,” says Kimonyi. In an effort to reduce that, Mars GCC has insulated all its pipes and is in the process of switching from Freon chillers to Ammonia, with 80% of the work done thus far. “Freon uses a lot of energy and is also more harmful to the environment,” says Kimonyi.
“These projects aren’t cost neutral, they increase efficiency, but the increase in efficiency doesn’t pay for itself,” explains Maduray. “But by looking at it purely from a bottom line perspective is the wrong approach. In Africa we saw cocoa yields decreasing, and without it we can’t make chocolate, so something had to be done, in the scientific community there is a consensus that global warming is happening, and it’s a threat. Without a sustainable supply chain the company can’t hope to be around for another 100 years.”
Mars then has looked at its entire supply chain and found ways of making it ecologically and socially viable for the future by breaking it into three parts. The first is at the source of the supply chain, with policies in place to eliminate deforestation and exploitation and a certification process that ensures all Mars suppliers are adhering to it.
The second is in the middle of the supply chain, with efforts underway to switch to renewable sources of energy, and the third is at the end of the supply chain, with a zero waste to landfill policy that has seen the chocolatier entirely rethink the design of its manufacturing facilities.
“We have a goal to be 100% sustainable within the next 40 years, but we recognise that we can’t change things on our own,” says Maduray. “We cannot singlehanded eliminate pollution and poverty, but we hope that Mars can be a catalyst for change, by setting an example for others to follow.” Mars then has proven that a sustainable supply chain can be both profitable and competitive, which was unheard of ten years ago.