Why Mars is dropping 1,450 suppliers

Mars claims to have achieved a deforestation-free supply chain as a result of efforts to “radically simplify” its supply chain.

Mars said it had made “sweeping transformations” to its palm oil supply chain by reducing the number of mills it sources from and awarding longer-term contracts to suppliers who can commit to its environmental, social and ethical expectations.

Under the supply chain simplification plan, Mars is partnering with a "smaller cohort of suppliers" and reducing the number of mills it works with from 1,500 to fewer than 100 by 2021, and the count is set to be reduced to 50 mills by 2022.

The manufacturer has been using satellite mapping and third-party validation to simplify and select the suppliers and mills it sources from.

The achievement comes as a result of its Palm Positive Plan, which aimed to create “shorter, more transparent supply-chains”.

UniFuji, one of Mars’ suppliers in the Asia-Pacific region, was able to reduce its operations from 780 mills to just one mill. This was achieved through a “1:1:1 model”, which means palm is grown on one plantation, processed through one mill and one refinery, Mars said.

Barry Parkin, chief procurement and sustainability officer at Mars, said: “For years, businesses have grappled with complex and opaque palm supply chains. It is now clear that this has not been enough to guarantee no deforestation or human rights issues. 

“By radically simplifying our palm supply chain, partnering with a smaller cohort of suppliers and rigorously applying the three M’s of mapping, management and monitoring, we can eliminate deforestation and advance respect for human rights. 

Parkin added: “In order to extend this impact beyond our own supply, we are asking our suppliers to apply these principles to all the palm oil that they source, not just the material they supply to us. Through this action, and if adopted by others, we can reach a tipping point to drive systemic change across the entire palm industry.” 

Palm oil is found in 50% of supermarket items but its supply chains have a history of being opaque. Production of the commodity has been linked to forced labour and deforestation. 

Last week, the US announced it would block imports of palm oil from a Malaysian producer after an investigation indicated signs of forced labour in the supply chain. 

Meanwhile the UK is proposing legislation which could see firms fined for failing to do due diligence to ensure commodities are free from illegal deforestation.

Diana Ruiz, senior forests campaigner at Greenpeace USA, said: “It is no surprise that companies like Mars are looking to reduce their exposure to forest destruction. But simplifying supply chains for global customers is not going to clean up the commodities trade. It’s like trying to fix a leaky faucet in a burning building.

“Companies must demand complete transparency from their suppliers as a condition of trade by only sourcing commodities from suppliers that can prove they are clean, which will inevitably mean reducing the volumes they bought.”

 Want to stay up to date with the news? Sign up to our daily bulletin.

LATEST
JOBS
Zurich, Canton of Zürich (CH)
-
Barry Callebaut
London, York
£38,171 - £42,745 (National) £39,747 - £44,854 + £3,150 RRA (London)
CPS
SEARCH JOBS
CIPS Knowledge
Find out more with CIPS Knowledge:
  • best practice insights
  • guidance
  • tools and templates
GO TO CIPS KNOWLEDGE