Credit - Greg Kahn—Courtesy of Mars
(Miss this week’s The Leadership Brief? This interview below was delivered to the inbox of Leadership Brief subscribers on Sunday morning, Oct. 18; to receive weekly emails of conversations with the world’s top CEOs and business decisionmakers, click here.)
Many candy lovers (at least this one) aren’t aware that chomping into a Milky Way bar may make one complicit in child-labor law violations and deforestation. The commodities that go into candy and gum—cocoa, mint and palm oil—are produced by some of the most impoverished people in the world, living in some of the world’s most environmentally vulnerable areas. Grant Reid, the CEO of Mars—the 109-year-old, $40 billion privately held pet-care, candy and food behemoth—has embarked on a multiyear effort to make the global food-supply chain more equitable and sustainable. He’s working with NGOs, governments and suppliers around the world to achieve that goal. As a private company with the third, fourth and fifth generations of the founders involved (they are referred to as G3, G4 and G5), Mars is better able to tackle complex, long-term problems than public corporations, which are subject to the brutal fun-house ritual known as quarterly earnings calls with Wall Street analysts.
Reid recently joined TIME for a video conversation about Mars’ diverse portfolio. The company’s pet-food and pet-care business, featuring brands like Pedigree (dog food) and Whiskas (cat food), is performing strongly in the pandemic as furry companions have become as popular as toilet paper; the pet business is now bigger than candy or food sales. He also discussed Mars’ ambitions, including the company’s belief that “everyone working within our extended supply chains should earn sufficient income to maintain a decent standard of living,” and its plan to reduce its carbon footprint by 67% by 2050.
(This interview with Mars CEO Grant Reid has been condensed and edited for clarity.)
I hate to start out with a Grinch-like question, but how much will the curtailing of Halloween this year impact Mars?
Digital is changing everything, so we’ve taken the opportunity to put together a really cool app called Treat Town, which allows you to customize your door, just like a real door at home. People can collect points and then take it to the store and get real candy. We’re using the adversity we face with COVID and trying to bring that feeling of joy to kids and parents.
Still, do you anticipate a revenue hit without kids trick-or-treating door to door?
Nobody really knows. Our role is just to make sure that we have the right products available for the consumers and try and make it as fun and as accessible as possible. We’ll find out in the next few weeks.
With people hunkered down at home and not going to the office and on dates, I understand that the gum business has taken a hit. (Mars owns Wrigley.)
We’re pretty confident it will bounce back, but that’s definitely a challenge. If people aren’t popping it for fresh breath because they’re not socializing as much, then there’s bound to be a hit.
By what order of magnitude is the gum category down?
Off the top of my head, I’d say probably 15, 20%.
Mars has a customized M&M business, including making specially emblazoned ones for the White House: Has M&M consumption in this Administration gone up in this White House and on Air Force One?
I have no idea. Hopefully he’s using it as a treat like it should be and others are using it as a treat.
Running a private company, do you wake up every morning and dance a little jig that you don’t have to deal with Wall Street analysts?
Maybe not every morning, but probably every second morning. Joking aside, I’ve been at Mars for 31 years, and I’m here not only because of the job. I’m here because I work for real people who really care about making a difference in society. The second thing, because it’s a private business, we put 90%-plus of the money back into our brands, our businesses.
We have a philosophy, which is ‘Profit without purpose isn’t meaningful, and purpose without profit isn’t possible.’
Commodities are hugely important to Mars. Can you talk about your experience in the field and the company’s evolving approach?
So I bought commodities myself. I’ve walked cocoa fields in Ghana and Côte d’Ivoire and Brazil, and I’ve seen peanuts in Nicaragua, farms in New Zealand for dairy products. When I bought commodities, we bought on price, quality and delivery. Now quality and price and delivery are still as important today as they were before, but the definition of quality isn’t just good taste now. The definition of quality is what’s it doing to the environment, what’s it doing to the people in the supply chain?
You just reached a significant milestone in your big palm-oil initiative. What drove your efforts there?
Probably not a lot of people know that palm oil goes in almost all products—it’s incredible—from shampoos to chocolate and everything in between. A lot of palm oil comes from areas that have been taking down tropical rain forests. When they burn that, it releases tremendous amounts of greenhouse gas. We’ve tried for some years to work with the commodity suppliers, and we found that we really weren’t making much progress. So we took a leadership position. We said, “We need a new theory of change.” And the new theory of change is we’re not just going to go out to 1,500 palm-oil suppliers, we’re going to work with a much smaller group who really care and really want to make a difference. So we’ve cut down from 1,500 suppliers where we didn’t know where the palm oil was really coming from, down to about 100 suppliers, and by 2022 we’ll probably be down to more like 50. We know exactly where it’s coming from, that it’s not causing deforestation.
And you are making similar progress with cocoa and across your supply chain?
We want at least a million people to benefit from working with Mars through our extended supply chain. And that’s where we start. I mean, cocoa is certainly a big part of that, but it includes all of our raw materials; we buy sugar, we buy mint, we buy fish from Thailand. We’ve done a lot of work on mint. We’ve worked with companies like Danone and the Livelihood Funds to really change the way that vanilla is grown. We’re very active in a number of areas to try and make sure that a million people really benefit from working with us. We have a philosophy, which is “Profit without purpose isn’t meaningful, and purpose without profit isn’t possible.”
And when you look at your carbon footprint, you are looking across your entire supply chain, not just your own company?
Our ambition is to cut our greenhouse-gas emissions by 67% by 2050. We’re on a great path to that because as the company grows, our greenhouse-gas emissions are going down. And we’ve done that in a number of ways. We’ve used, coming back to the commercial-procurement side, novel ways of approaching it. So we’ve invested in wind farms, for example, in the U.S., the north of Scotland, Mexico and China; 53% of our total electricity use around the world comes from renewable sources, and our mission is to get that to 100. What we do is we work with partners to invest in wind farms, and we give them a long-term contract, and that allows us to get renewable energy. We [also] looked at our operation; how much greenhouse-gas emissions are coming from our factory, from our associates driving cars? But what you find is that’s probably 10 to 20% of your total carbon footprint; 80% is in your extended supply chain. Unless you solve your widest supply chain, nothing’s going to happen.
We want at least a million people to benefit from working with Mars through our extended supply chain.
We’ve talked a lot about all the good things you’re doing. What is your secret shame? Where could you be doing better?
I think we’re falling short pretty much everywhere. I mean, that’s just business, right? I’d love to be growing more, and I’d love to make a bigger difference in the environment. I’d love to do even more, faster. We call it at Mars “a healthy dissatisfaction.”
Broadly, how is capitalism working?
Anytime there’s anybody who’s in forced slavery in a supply chain or you’re burning down forests and causing other issues or viruses escaping or greenhouse gases, you can’t be comfortable that capitalism is working perfectly. You’ve got to keep working on it.
Where did you grow up?
In a small mining village in Scotland. The work ethic was pretty strong. I’ve worked in glass-bottle-making factories, I’ve dug trenches, I’ve painted bridges—all those things as I was working my way through college. I was the first in my family to go to university.
What does America mean to you?
It means opportunity and freedom.
Do you think that is changing?
No. I came to America 30 years ago in a fairly midlevel position. I’m an American citizen now. My wife’s an American citizen. Both my kids are American. I’ve got a life I could only have dreamt about back in my poor mining village in Scotland.
What is the most beautiful place you’ve ever seen on your business travels?
New Zealand, round about the Queenstown area.
What was the saddest thing you ever saw on your business travels?
The poverty in Côte d’Ivoire.
What is your preferred method for having meetings?
I have a signature process called walk-and-talk. It changes the dynamic; it makes it more personal. You’ve got a closer engagement. I think people feel like they’ve got more focus from me. I’ve done that for many years.
What type of behavior do you not tolerate in the workplace?
The obvious ones, obviously, you know: sexual harassment, bullying. That’s all unacceptable. But the micro things, like coming to meetings late. That doesn’t work for me. So I just close the door and we start the meeting. If I’m the only one there, I’ll start. It’s not O.K. for me to be late, either.
LEADERSHIP BOOK: Tactical Genius in Battle. I found it in an old book sale—it had to be at least 20 years ago. It takes you through all the great generals and talks about how they won battles and how they think. I call it vision/commitment, speed/agility, communication and capability.
AUTHORS: Churchill for nonfiction and Dickens for fiction.
APP: Audible. If I’m driving long distances or I’m out for a run, I can listen to books and learn.
EXERCISE: I’ve always liked exercise, whether it’s walking the dog, riding a bike. So I walk, I run, I do quite a bit of weight training, and I’ve done a lot of martial arts over the years, so boxing, judo, kickboxing, jujitsu. A little bit less of that since I broke my collarbone in judo, but I still hit the heavy bags.
Correction, October 18
The original version of this story misstated the name of Mars’ digital trick-or-treating experience. It’s Treat Town, not Treat Time.