Question: now that green products and organics, have made their way into the mainstream, gaining widespread acceptance, are Fair Trade Certified products next?
Hard to say. However, Fair Trade products are increasingly being added to retail assortments and many marketers feel this is the next logical step in sourcing and supporting socially responsible consumer goods.
A recent Brandweek article pointed to this. “Marketers Eye Fair Trade Certified as the New Green” gives an even-handed look at the issue, and whether or not it’s poised to take off or remain a small, niche portion of the total consumer product business.
So what is Fair Trade and how are FT products certified? Fair Trade signifies that food and non-food products such as flowers, are being sourced in a socially responsible manner, ensuring that:
* Farmers around the world are employing sustainable, environmentally safe practices and working in safe conditions.
* Growers are being paid a fair wage for their crops.
* Farmers are encouraged to set up co-ops and to make democratic decisions on a number of issues, including “how to invest their profits in building schools, health clinics, or developing better business and sustainability practices.”
* In the U.S., products from suppliers that meet these criteria are then certified by TransFair USA of Oakland, California.
While some consumers are aware of Fair Trade and what it means, and routinely purchase products because of this designation, many more remain unaware of it. Also, the Fair Trade designation is heavily weighted to specific categories, most notably: coffee, tea, herbs and spices, chocolate, sugar, rice, and a few others.
Companies like Green Mountain Roasters and Starbucks have woven Fair Trade into their brands in a major way. However, major food companies such as Kraft and Hershey haven’t made Fair Trade a centerpiece of their marketing efforts, only mentioning it on their web sites as part of their social responsibility initiatives. This prompted Mintel’s director of CPG trend insights, Lynn Dornblaser, to comment in the article: “Right now Fair Trade is for small companies in big ways and big companies in small ways.”
Still, there are encouraging signs on the horizon:
* To date in 2008, 284 FT products have debuted in the U.S. vs 130 last year and only 17 in 2003.
* Sam’s Club and Target have added FT products and plan on adding to their current inventories with more FT certified skus.
* Retail sales of FT certified coffee rose to $730 million by 2006, representing a ten-fold increase from 2001. A significant reason for this: Wal-Mart’s decision to add FT coffee to its assortments.
Questions:
* Do you think that much like organic products a few years ago, “niche” Fair Trade products are going to burst on the scene in a more mainstream way?
* Would you be more likely to purchase products if they bear the Fair Trade designation on their packaging?
* Even if these products might be a bit more expensive than many mainstream competitive products?
I’d love to hear from you.
Do you think that much like organic products a few years ago, “niche” Fair Trade products are going to burst on the scene in a more mainstream way?
Yes, I personally buy fair trade coffee, usually by the pound, and it is very high quality and actually slightly less expensive than the other quality coffees.
* Would you be more likely to purchase products if they bear the Fair Trade designation on their packaging?
Yes. Absolutely.
* Even if these products might be a bit more expensive than many mainstream competitive products?
Yes. The using of overseas labor as slave labor we don’t give a shit about is wrong. We enable it. A simple thing you can do is vote with your dollars for products that treats the farmer a bit better. Let’s face it, even under fair trade, their lives are not picnics. If you can do a small thing to have the coffee farmer (the only example I can think of at the moment) and his family live a more dignified life and use environmentally sound techniques? What’s not to like?
Also, insisting, with your dollars, that we bring standards up in other countries with regard to environment and labor makes the trade game more fair.
Now, we sign agreements or allow relatively free flow of goods with countries that don’t play by the same rules we do. We would not tolerate the absolute squalor and putrid air and water that the Chinese do in the name of economic growth but we eat up their goods like their is no tomorrow.
The word “fair” is apropos here. There used to be a lot more things done right here in the U.S. and I am all in favor of free trade but make it fair to bring up the people we trade with an give the American worker a fair chance to compete.
I a bit beyond what you asked but it is relevant.
Thanks for answering my questions in detail, Neil. I appreciate your input, as always. You’ve given us many important insights as a consumer. . .and I do believe consumers will make fair trade companies successful. Once we understand the many benefits of purchasing fair trade practices and supporting these practices, I believe many more consumers will be won over.
I think Fair Trade classification is of most benefit to food, jewelry, and home decor. Or practically every product that is imported, non-tech, artistic, and carries an exotic foreign tinge to it.
These types of products have high story potential that adds emotional value.
It’s like we’re building cause-related marketing as an intrinsic product attribute.
“It’s like we’re building cause-related marketing as an intrinsic product attribute.”
Great way to put this, Mario. In other words, there is a great element of value here and marketers can share this value with consumers. Thanks for weighing in. I appreciate it.
Mario, the fair trade concept could even be extended domestically.
I mean let’s face it, the Brazilification (rich and poor with a relatively small middle class) of America has been going on for a while now. Is that *really* what we want?
I don’t think it is what we want. Look, let’s face it, the whole thing is a game. The market. Life itself in many ways.
When things start going off the rails it might be time to say, look, how can we make the rules of the game more fair. The game (market, capitalism, etc.) works very well but how can we make it more fair and sustainable?
How can we keep the game going to so future generations enjoy its fruits?
To clarify, I do *not* think the middle class is small in America but it should be growing not shrinking. On that much, we can all agree.
The working class needs to be treated fairly. You cannot rely on the government, unions, etc., to make that happen.
You have to have some basic regulations (e.g., banking regulations), yes, but the dollar vote. That is the way it really can happen.
People also have to live simply and within their means. Yeah, go shop but spend within your means. That message that your grandparents told you is right: live within your means. We have somehow forgotten that basic wisdom.
Neil,
While Fair Trade leans heavily toward imports, it can apply domestically as well so long as we’re talking about sourcing and manufacturing from third parties. Those health of those relationships could be certified from an external auditor or heavily documented in a company’s CSR reporting.
Interesting conversation, guys. Great point, Mario: fair trade can apply anywhere in the world, including here at home. To date, many of the products that have been grown or sourced under Fair Trade governance have come from foreign countries. Coffee, chocolate and many herbs and spices are grown abroad. Still, in our own country, it’s gratifying to see that some of our most dominant retailers like Wal-Mart are consciously choosing to purchase FT products and to make them more widely available. This will greatly expand awareness, distribution and consumption. . .I think we need to emphasize this point, as well.
Ted, I’d like to see fair trade practices and certifications extended to much more than produce and grocery items. Might there be, as Neil points out, room for additions of electronics and clothing?
You bet there’s room for additional categories to become fair trade certified over time, Paul. With more consumer and retailer buy-in and exposure, I’m betting we’ll see more of this in the near future.
Thanks for weighing in, Paul.
What’s interesting it is called “fair trade.”
That implies fair country to country trade. What we are talking about, to some degree, is extending this concept beyond the notion of fairness in trade.
Fair Trade by nature tends to be organic as a default so why differentiate between the two? I think just by associated the labels they will gain marketing efforts and shelf space.
You’re right, Sheri. Many Fair Traded products tend to be organic since they the growers must follow environmentally safe growing practices. . .although I’m not sure they always are 100% organic. Fair Trade really goes a step beyond the idea of offering environmentally sound products, though. It goes to certifying that the growers, regardless where they are living and working in the world, are assured of a fair living wage for their products. That’s an important distinction. . .one that consumers seem to be taking note of more and more. When products are certified with the Fair Trade label, consumers can trust that their purchases are supporting the growers, not just the middlemen and retailers in the distribution chain. Thanks for adding some good comments, Sheri.
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