Mars rethinks procurement for post-commodities era

Signal of change / Mars rethinks procurement for post-commodities era

By Katrina Mataciunaite / 27 Jun 2018

Food giant Mars has set out a Sustainability in a Generation (SiG) plan, which aims to tackle the short-term, commodities-only approach to procurement of raw materials such as rice, cocoa, palm oil and others, which is detrimental to both people and the environment. The company has taken three years to map the origin of its key raw materials and has set out “transformational strategies” to make their supply chains more sustainable in the longer-term. The company’s procurement and sustainability officer Barry Parkin claims that it is no longer acceptable for companies to source materials without knowing their origin and the means by which they came to be produced, hailing for the end of “the commodities era”.

So what?

The fact that a food giant such as Mars is taking sustainable procurement seriously and setting it as an important business goal is highly promising. Large companies tend to have significant environmental and social impacts and thus, taking the initiative to tackle these through the improvement of supply chains is a positive step towards greater sustainability in business. Improving the company’s supply chains over the longer-term can result in a win-win-win situation for the company, its suppliers and the environment. However, it is yet to be seen whether the rest of the sector follows suit and seeks to implement similar strategies. Is the end of the commodities era really possible? Can global markets really operate differently? If so, what will it take for a big shift like that to take place?  The availability of short-term contracts for cheap commodities is likely to continue for some time and so, will challenge the motivation for companies to think for the longer term and try do business differently.

Sources

https://www.foodnavigator.com/Article/2018/06/06/Why-Mars-thinks-the-commodities-era-is-over#

What might the implications of this be? What related signals of change have you seen?

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