Mars Inc.

Achieves Profitability with Sustainability

This case accompanies Chapter 3: Ethics and Social Responsibility and Chapter 7: Operations
and Supply Chain Management Basics. Click on the graphic below to see a short video.

Mars Inc., manufacturer of internationally known food products such as M & M’S®, Snickers®,
Uncle Ben’s®, Pedigree® and 25 other brands (Mars Brands, n.d.), is a global leader in
combining the sustainability of its operations with corporate social responsibility. In 2017 it
launched its Sustainable in a Generation Plan.
With thousands of raw materials in the Mars Inc. supply chain, the company chooses its
suppliers using socially responsible criteria, captured in its “supplier code of conduct.” Mars Inc.
suppliers must show that they respect their workers and their communities and that they are
making measurable progress toward reducing negative impacts on the local environment. Mars
Inc. seeks out suppliers that are owned by members of groups underrepresented in business, for
example, women. Read the Mars Inc. Supplier Code of Conduct here.
The use of “certified” sources of raw materials is a key element in Mars Inc.’s sustainability
initiative. Certification means that a supplier is meeting standards for sustainability, that is, using
good agricultural practices, modern farm management, and respecting the environment. By
helping cocoa farmers be more productive, the company seeks to improve their quality of life
while securing the future supply of cocoa. Rainforest Alliance, UTZ (utz kapeh means cocoa in
the Mayan language), and Fairtrade International are three organizations that certify Mars Inc.’s
cocoa suppliers. The company is proud to claim that it is the world’s largest purchaser of
certified cocoa. Its goal is to obtain 100% of its cocoa from certified suppliers by 2020.
Another way in which the candy-maker hopes to achieve the sustainability of its entire supply
chain is by reducing its carbon footprint, the amount of carbon dioxide produced as a result of
producing raw materials and in the manufacturing of Mars Inc. products. In early 2018 the
company reported that its footprint is roughly the size of the country of Panama and announced
plans to reduce greenhouse gas emissions by 27% by 2025 and by 67% by 2050 (Hermes, 2018).
A third way in which Mars Inc. is achieving the sustainability of its supply chain is through its
policy of “zero waste.” By 2040 the company aims to ensure that all water used at any plant is
returned in the same state that it was received, and that no waste is sent to landfills (ITP Media
Group, 2018).
Given that Mars Inc. runs over 100 plants around the world, their sustainability goals are
challenging, but they are goals that company executives like Richard Ware, global Vice
President of supply, R & D and procurement, believe are achievable, necessary, and makes good
business sense. In April 2018 Ware told Jennifer Hermes of the Environmental Leader:
By capitalizing on the falling prices of renewable energy and the long-term cost savings
of clean technology, Mars has been able to reduce the carbon emissions of our 150
factories around the world by 25%. We also now purchase enough renewable energy to
fuel our entire operations in five countries and plan to make that 11 countries this year.
And all of this is delivered at the same cost, or lower, as fossil fuel (para. 9).
Mars Inc. is not alone in its vision. Unilever, Anglo-Dutch manufacturer of global food,
beverage, and cleaning product brands, has “The Unilever Sustainable Living Plan,” which
pledges to preserve the environment and increase its social impact in line with United
Nations Sustainable Development Goals (Sustainable Living, n.d.). Nestlé has an initiative
called “Creating Shared Value” (Creating Shared Value, n.d.) which explicitly acknowledges
society as a partner in its success. A growing number of businesses, large and small, across
wide variety of industries have started to recognize that what is good for society and our
planet is good for business. The Environmental Protection Agency (EPA) has set up a federal
technical assistance program called E3: Economy, Energy, and Environment to help supply
chains adapt to the “green” economy (E3: Economy – Energy – Environment, n.d.).

References

Creating Shared Value. (n.d.) Retrieved from https://www.nestle.com/csv/what-is-csv .

E3: Economy – Energy – Environment. (n.d.) Retrieved from https://www.epa.gov/e3 .
Hermes, J. (2018, April 10). How Mars Inc. Aligns Sustainability with Biz Strategy: Q&A with
Supply Chain Exec. Retrieved from
https://www.environmentalleader.com/2018/04/mars-inc-talks-turkey-aligning-
environmental-responsibility-with-biz-strategy-qa/ .
ITP Media Group. (2018, June 5). Case study: Mars chocolates’ sustainability achievement.
Retrieved from https://www.logisticsmiddleeast.com/supply-chain/30861-case-study-
mars-chocolates-sustainability-achievement .
Mars Brands. (n.d.) Retrieved from https://www.mars.com/global/brands-old .
“Mars Inc. Supplier Code of Conduct.” (2014). Retrieved from
https://www.mars.com/docs/default-source/Policies-and-Practices/supplier-code-of-
conduct/supplier-code-of-conduct-english.pdf?sfvrsn=4 .
Sustainable Living. (n.d.) Retrieved from https://www.unilever.com/sustainable-living/ .
Sustainable Manufacturing. (n.d.) Retrieved from
https://www.epa.gov/sustainability/sustainable-manufacturing .

Case questions. (The listed References may be helpful in responding to the case questions.
If you use any of them, be sure to use the proper in-text citation.)

1. a) Identify at least 5 separate elements in the Mars Inc. supply or value chain for M & M’S®.
Consider all elements involved in the transformation process in Fig. 7.1 of the textbook.
(Hint: Refer to “How M&Ms are made” at http://www.madehow.com/Volume-
3/M-M-Candy.html as well as Chapter 7).

b) Choose one of the supply chain elements that you identified in part a). What factors should
Mars Inc. consider in the decision to select this type of supplier? Explain your reasoning.
(The more factors you explain, the better the answer.)

2. Which of the 4 approaches to corporate social responsibility described at the end of Chapter 3
best explains Mars Inc.’s stance? Explain your answer with examples from the case and/or
your own research.

3. a) What are three business reasons why companies are pursuing sustainability in their
operations? b) Which of these reasons does Mars Inc. appear to be focused on? Explain your
answer.