A VC in Vacationland

Mars, which owns the Mars, Snickers and M&M candy brands, is to spend
tens of millions of dollars annually certifying that the cocoa used in the $10 billion
of chocolate products it sells every year is sustainably sourced by 2020.

The move by the world’s biggest confectionery company, which claims to be the
biggest end-user buyer of cocoa globally, comes as chocolate companies worry
over rising cocoa prices and falling supply.

Fiona Dawson, managing director of Mars UK, said; “Cocoa is a volatile
commodity. We want to secure our long-term sourcing.” She also said consumers
and employees expected Mars to “do the right thing” because “nobody has to buy
confectionery”.

Cocoa analysts forecast total global production at 3.5m tonnes in 2008-2009,
down 66,000 tonnes on last year and the fourth successive seasonal deficit, and
have warned of more increases in cocoa prices, which hit 24-year highs this
year.

Analysts at Fortis Bank said in a recent report: “We are becoming more
concerned that the scope for production growth is reaching some upper limits,
constrained by the paucity of geographic locations suitable for cocoa
production.”

Analysts are particularly worried about the politically un­stable Ivory
Coast, the world’s biggest cocoa producer.

Howard Shapiro of Mars said: “Yields have been flat for over 30 years in west
Africa … You’ve got to get frightened.”

Mars, a privately held company, spends more than $1 billion annually buying beans
direct from farmers and processors.

Cadbury pledged a month ago to spend $1.7 billion
getting all the Dairy Milk bars sold in the UK and Ireland certified by
Fairtrade.

Dave believes that Green Logistics is not just about moving products around the global in a "green" manner; but also be about ethically sourcing the ingredients from green producers. Unfortunately, many basic commodities, like oil, coffee and chocolate come from unstable parts of the world. One can understand the green aspects of reducing the energy and environmental costs associated with freight movements. But can ethically sourcing green products be a reality in a troubled world?  Should we refuse to buy oil from the Saudi's because they treat women badly? Is China off the list because of Tibet? And what about chocolate from the unstable Ivory Coast, with it's myriad of human rights problems? How can you be sure that your sourcing strategy is green as well?

First, as the article points out, buying products directly from individual producers who treat their people and the environment well is a critical first step.  Just because a country is "bad" in some way does not mean that all producers cannot be trusted. We cannot continue to be the world's only policeman and must respect the fact that every country will not behave as we desire.

Second, work with organizations who monitor countries and their industries on an ongoing basis for human rights/environmental violations. Companies interested in being green from a sourcing perspective work with NGO's and other monitoring organizations to make sure that producers live up to green pledges.

And finally, make sure you go and see for yourself.  It is one thing to have have consultants and organizations give you benchmark data on a producer's green performance; it is quite another to visit in person to see for yourself.