Mars exec emphasizes sugar sustainability at ASA meeting
August 22, 2018
TRAVERSE CITY, Mich. — For years, the American Sugar Alliance's International Sweetener Symposium, a gathering of the nation's cane and beet growers, has been marked by a debate about sugar policy between a representative of the Sweetener Users Association, the lobbying group for industrial sugar users, and Jack Roney, chief economist for the growers.
But this year, after an amendment to change the sugar program was defeated on the House floor by a vote of 137 to 278 and no proposal was presented in the Senate, there was no speaker representing the users. Instead, Paul Steed, the senior global price risk lead for sugar at Mars Wrigley Confectionery, in an Aug. 6 presentation emphasized consumers' interest in sustainability, Mars' commitment to it and the common interests of users and growers.
Steed's presentation did contain a slide that said the current sugar program, which sets floor prices, may discourage domestic expansion, that tariff quota restrictions may cause a mismatch between market needs and cane refining capacity, and estimated that sugar-containing products now amount to 1 million tons of foreign sugar.
But in his speech Steed said, "It's time to embrace a sense of urgency in sustainability."
Consumers, he noted, "don't trust big business so much anymore" and want to buy food that is produced in ways they regard as sustainable.
That's why, he said, Mars has joined with Danone North America, Nestlé USA and Unilever United States to form the Sustainable Food Policy Alliance and to develop its own "Sustainable in a Generation" program to reduce water use and carbon emissions and hold flat the total land area used by its suppliers.
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Mars also has a goal of increasing incomes, respecting human rights and creating opportunities for women — issues that apply most of all to its developing country suppliers of cocoa and other commodities.
"With everything we are expecting from our suppliers, we are not really buying commodities anymore," he said.
"We have to go all the way to the farm" with sustainability, Steed said.
For other food companies and other commodities, that has meant putting pressure on farmers to change some of their practices. But Steed emphasized that Mars is pleased with U.S. sugar growers and their system of just-in-time deliveries and the U.S.-Mexican agreements that have stabilized sugar prices and supplies.
"We're not that concerned about prices; we're more concerned about availability," Steed said, noting that his biggest concern is transportation of the sugar, particularly by rail.
"Mars is very committed to making a product where we sell it," he said, and noted that it built a candy plant in Topeka, Kan., a few years ago.
Steed also acknowledged the current debates over whether people should eat less sugar. While sales of sweetened soda have gone down, candy sales are up 1.4 percent this year.
That's "not tremendous growth, but it is growth," Steed said, noting that candy is often an impulse purchase.
"We feel very good about the growth opportunities in our market," Steed said. "We're very skeptical that demand is down."
Roney said he saw Steed's report as "a paradigm shift between buyers and sellers."
For sustainability, consumers are willing to pay a premium, Roney said.
He called Mars' willingness to make investments in developing countries to improve the living standards of cocoa producers as "noble," but pointed out that Mars does not have to have that expense when it is buying sugar in the United States.
In a conclusion, Roney pondered whether Steed's remarks are a sign that users may be changing their views on price.
"Could the race to the bottom be slowing down?" Roney asked. "Rather than rewarding countries with the lowest standards and fueling a race to the bottom, Congress is clearly more interested in supporting U.S. producers who have the world's highest labor and environmental standards and grow food in a sustainable fashion. It's a smart America-first shift."
But it's too soon to answer Roney's question. Despite the ASA-Mars and Steed-Roney interest in grower-user unity, the Sweetener Users Association has raised the question of whether U.S. sugar production is sustainable. In recent weeks, SUA has alerted reporters that the impact of sugar growing in Florida's Everglades has become an issue in that state's gubernatorial primary coming up Aug. 28. The state question is what role sugar production and the phosphorous from it may play in producing toxic algae that is damaging the environment. But the users argue that the mass production exists in Florida because the U.S. sugar program makes growing sugar so profitable.