Mars predicts 'end of commodities era'

19 September 2018

Mars has announced it will adopt a new sourcing strategy as it works to “fix broken global supply chains”.

The manufacturer said in a statement it would move away from a “traditional sourcing approach” where materials were sourced from “largely-unknown” origins and bought “purely for price on a transactional basis”.

Instead, it will buy from “known origins and in many cases known farms”, aiming to nurture “longer term” partnerships with fewer suppliers, it said.

The strategy comes a year on from the company’s pledge to put $1bn into a sustainability plan, which included increasing the proportion of electricity it used that was sourced renewably, and trying to sell a higher proportion of healthy food products.

The company, which owns food brands ranging from pasta sauces to rice to confectionary, said the sourcing approach would initially focus on key ingredients “where the impact is greatest”, including cocoa, fish, rice and mint.

Chief procurement and sustainability officer Barry Parkin said: "The transformation of supply chains is necessary across most of the materials we used to call commodities. In fact, I believe we're seeing the end of the commodities era, where materials used to be sourced from largely-unknown origins and bought purely for price on a transactional basis.

“The future will require sourcing from known origins and in many cases known farms, with price and sustainability impacts evaluated side by side and generally from longer term partnership arrangements with fewer suppliers. We have started to make this shift.

“The next few years will see a significant scaling up of our activity and impact on the ground.”

Chief executive Grant F. Reid said the strategy was part of Mars’ plan to “change the trajectory around how we do business”.

He said: “Collaboration is critical if we are to accelerate how we address the challenges facing us today.”

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