Rabobank – one of the world’s leading sustainable financial institutions, based in the Netherlands – recently published a research report (see a summary at The Wall Street Journal’s Market Watch), which identified the flaws in the food and agriculture supply chains, and some recommendations to make the supply chain more effective and sustainable. Currently, companies operate with a linear supply chain, which makes it difficult to adjust to changes in supply and demand, and therefore creates unnecessary environmental dilapidation. The reasoning behind this structure follows a traditional supply chain order, in which suppliers and distributors form short-term relationships with other members of the chain to keep all parts independent of each other. This new study, however, suggests that forming cooperative relationships and long-term supply agreements with supply chain partners will provide advantages such as reduced risk, improved productivity, access to new markets, and improved access to capital. A dedicated supply chain would also support longer-term growth of F&A companies.
Rabobank uses Mars Chocolate’s Sustainable Cocoa Initiative as a successful example of close cooperation between upstream partners and the creation of a new supply chain. As the report notes, we made the unprecedented decision to release the cocoa genome into the public domain and to teach cocoa farmers about sustainable growth techniques in order to make sustainably sourced cocoa in order to help us achieve our goal of purchasing 100% of our cocoa supply from certified sustainable sources by 2020. This example has shown that by setting and reaching sustainability goals, companies such as Mars are able to increase yield while also benefiting growers and suppliers economically, socially, and environmentally. Barry Parkin, Mars Global Chocolate Procurement and Sustainability Head, is quoted in Rabobank’s release on the report, saying, “Mars believes that closer cooperation, both up the supply chain with suppliers, origin governments and NGO’s, and across the supply chain with other manufacturers, is critical to achieving the cocoa industry’s growth and sustainability goals.”
We’d like to thank Rabobank for their acknowledgement of our Sustainable Cocoa Initiative.