Other Raw Materials

We are still assessing the best approach to sourcing some of the raw materials that we use in high volumes or that have high social and environmental impacts. We are committed to working with industry, governments, suppliers and other partners to ensure we source these ingredients responsibly in the long term.

Sugar

We use a mix of beet and cane sugar in our chocolate and confectionery products and source most of it within the region in which it will be used. For several years, we have worked closely with our direct suppliers to ensure our sugar is responsibly sourced, while maintaining the highest levels of quality. Our sugar sourcing meets all regulatory requirements in all markets, and we assure this through the PROGRESS initiative.

We are committed to continuing to work with the industry to understand and improve the impacts of sugar cultivation. Other priorities meant we did not join Bonsucro, the leading global stakeholder group for the sugar supply chain, in 2011 as planned, but we intend to do so in 2012.

Mint

Many Wrigley gums contain mint oil, which is distilled from raw mint. We are taking steps to better understand and improve the environmental aspects of its production.

As a founding member of the Mint Industry Research Council (MIRC), we supported the organization’s work to establish a baseline for the greenhouse gases emitted during mint oil production. The initial report showed that processing mint is greenhouse gas (GHG) intensive.

With these results in mind, we have been identifying ways to decrease these GHG emissions and help mint farmers reduce their environmental impacts through continued soil conservation, reduced water use, energy management and fertilization methods.

Since 2007, these efforts have reduced GHG emissions from the mint we source by 30 percent. In 2011, we made further progress by extending what we learned from mint to complete an in-depth GHG analysis of the top five raw ingredients in chewing gum. We are using those findings to renovate our products and packaging and create alternatives with a reduced climate impact.

Tomatoes

Tomatoes are the key ingredient in DOLMIO® sauces and are Mars Food’s second most-used raw material after rice. Tomatoes are a summer crop, typically grown in warm, temperate regions using irrigation. Ensuring a secure supply of irrigation water is of prime interest. In addition, concentrating tomatoes to remove excess water from the fruits is energy-intensive.

We are developing a science-based strategy for tomato sourcing. We currently source mainly from regions where highly efficient drip irrigation is increasingly used to improve water-use efficiency. Research suggests that improved tomato varieties and farming practices can increase yields and further reduce irrigation and water content in the fruit.

We are assessing alternative tomato-growing regions, using agricultural, demographic, environmental and political criteria to ensure new sources are sustainable. Once this process is complete, we will apply the water stress index developed by the Commonwealth Scientific and Industrial Research Organization to confirm the most sustainable regions from which to source tomatoes.

Peanuts

We need a consistent and high-quality supply of peanuts for some of our most popular products, including SNICKERS^® and M&M’S^® peanut candies. We are committed to working with the industry to understand and address the impacts of peanut production. This work includes:

• Jointly funding the U.S. Peanut Resources and Efficiency Measures Report conducted by the independent research firm IHS Global Insight, which found major potential improvements in farming practices among U.S. peanut farmers

• Leading a collaboration with industry, government and academic institutions to sequence, assemble and annotate the peanut genome

• Chairing the American Peanut Council Sustainability Task Force

• Supporting research to develop varieties and farming practices that reduce land, energy and water use while improving soil health

• Developing improved logistics to reduce fuel use

• Evaluating new roasting operations to reduce energy and water use

Corn

Mars, Incorporated buys more corn by weight than any other raw material. Most of our confectionery products and pet food contain corn, corn-based products such as syrup, starch and sugar alcohol, or meat from animals fed on corn. We estimate that 25 percent of the raw materials we buy come directly from corn and another 26 percent are heavily dependent on it. A reliable supply of corn is therefore imperative to our future success.

However, corn is a globally produced and traded commodity with thousands of end uses both in and beyond food products, so our influence is limited. There is a substantial incentive for major users and producers to find ways to reduce the environmental impacts of growing corn. For now, we are relying on wider industry efforts regarding this crop.

Dairy

Dairy ingredients are a critical component of many of our milk chocolate and caramel brands. We are committed to supporting a strong, high-quality dairy industry by working in partnership with others to promote more sustainable agriculture and responsible sourcing. This work includes:

• Membership of the Dairy Working Group of the Sustainable Agriculture Initiative alongside the largest dairy users and producers in the world

• Collaborating with other consumer brand companies and suppliers through the PROGRESS Initiative, which promotes responsible sourcing through industry collaboration

• Membership of The Sustainability Consortium. Other members include the Innovation Center for U.S. Dairy, which has produced a lifecycle assessment of the U.S. dairy industry

• Searching for additional regional and global groups focused on driving positive changes in the industry.