Why Choose Fairtrade?
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In this talk I question whether consumer demand alone can really provide an adequate explanation for the growth of Fairtrade in Britain. By looking beyond the ‘ethical shopping trolley’, I suggest that there is an opportunity to explore in greater detail why businesses choose to engage with Fairtrade.
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Why Choose Fairtrade?
- 1. Matthew Anderson www.researchfairtrade.com Why choose Fairtrade? Exploring business drivers for change
- 2. Consumer Demand? ‘Fair Trade is entirely a consumer choice model, it operates within the larger free trade model of unregulated international commerce.’ (Nicholls & Opal, 2004). ‘The possibility of exercising individual choice as a Fair Trade consumer is made possible by intermediary trading, marketing campaigns and educational organisations with diverse modes of membership and support in civil society’ (Barnett et al. 2010).
- 3. Drivers for Change: • Gold Standard • Targeting the Ethical Market • Social Intrapreneurs • Independent Social Certification • Sustainable Supply Chain • An Alternative Trade Model
- 4. Cafédirect was launched in 1989 as joint initiative by Oxfam, Traidcraft, Equal Exchange and Twin Trading. Unique Pricing Structure: Cafédirect grades its tea according to the quality on a scale from 1 (lowest) to 7 (highest). The minimum price paid varies between US$1.77 and US$1.90 per kilo, depending on the grade. The Fairtrade minimum price is US$1.50 per kilo. Cafédirect's minimum price for Arabica gourmet coffee is: 150 US cents/lb Cafédirect's minimum price for Arabica gourmet organic coffee is: 170 US cents/lb Both of these prices are 15 US cents/lb higher than the Fairtrade minimum price. For cocoa Cafédirect pays 150 USD per tonne above the Fairtrade minimum price. Producer Partnership Programme (PPP): In the past five years, Cafédirect has invested more than £3 million (over half its profits) into the businesses of its grower partners. ‘Gold Standard’
- 5. Targeting the Ethical Market ‘Increasingly our consumers expect us to bring this commitment to social responsibility alive in our brands and show them how farmers can be helped to have a better life. . . We are therefore delighted to offer consumers a product carrying the approved FAIRTRADE Mark.’ Alastair Sykes, CEO of Nestlé UK and Ireland In October 2005, the news that Nestlé would be launching a Fairtrade certified coffee, ‘Partners’ Blend’, received a mixed reception. ‘The launch of Nestlé Partner's Blend coffee is more likely to be an attempt to cash in a growing market or a cynical marketing exercise than represent the beginning of a fundamental shift in Nestlé's business model.’ World Development Movement
- 6. • First major retailer to stock Cafédirect coffee. • Introduced the UK's first Fairtrade bananas. The Co-op Milk Chocolate 45g - UK's 1st own-brand Fairtrade product. • Launch of own-brand fairly traded wine in advance of international Fairtrade standards. • First ever major category switch - all own-label block chocolate Fairtrade. • Converted all own-brand coffee to Fairtrade. • First UK supermarket to convert entire own-brand hot beverage category, including iconic 99 Tea, to Fairtrade. • Completed the switch of all own-brand sugar to 100% Fairtrade. • Commitment: if a primary commodity from the developing world can be Fairtrade, it will be Fairtrade by 2013. • New range of projects and initiatives that will benefit producers and go beyond Fairtrade. 2000 2001 2003 2008 2011 1992 2002 Social Intrapreneurs
- 7. ‘What is required is a radical re-thinking of the Movement’s social purpose, otherwise we may succeed in maintaining a significant stake in UK retailing but on basically no different terms from any of our most prominent competitors.’ H. W. Whitehead, ‘President’s Address’ (Co-operative Union Congress, 1981). The Rochdale Society of Equitable Pioneers, (1844). Values Led Business
- 8. • First supermarket to stock Green & Black’s Maya Gold Chocolate. • First to convert all of its bananas to 100% Fairtrade • Sainsbury’s Fair Development Fund, run by Comic Relief, started with an initial commitment of £1 million. • First UK retailer to convert all of its own label sugar. • Converted Red label tea - now all own-label teas are 100% Fairtrade • All own label roast and ground coffee became 100% Fairtrade • All South African Taste the Difference wines are now Fairtrade. 2007 2008 1994 2009 2011 Sainsbury's total Fairtrade sales over the year to February 2011 were £276m, an increase of by 27% over the past year. Sainsbury’s has plans to increase this to £500m by 2015. Independent Social Certification
- 9. ‘The Rainforest Alliance mark was much easier to achieve but no real social benefits were returned to the communities. . . So the only way to achieve a real difference was through Fairtrade; and the only way to achieve this with real scale was by converting our entire range of bananas to Fairtrade.’ Matt North, ‘Banana Breakthrough’, in J. Bowes (ed.) The Fair Trade Revolution (Pluto Press, 2011) Banana Breakthrough
- 10. • The Cadbury Cocoa Partnership was founded in 2008, with a commitment to invest £45 million over 10 years in sustainable cocoa production. • Fairtrade certified Cadbury Dairy Milk was launched in the September 2009. Sustainable Supply Chain ‘Lots of people think that Fairtrade is all about reputation, marketing and the brand – about getting an ethical “badge”. But it’s much more fundamental. It’s about supply chain sustainability.’ Todd Stitzer, Cadbury’s former chief executive
- 11. An Alternative Trade Model 1960s 1970s 1990s 1992 • Oxfam stopped directly importing goods from producers overseas but it continues working to improve terms of trade and livelihoods of workers. 2001 • Oxfam's network of volunteer-run shops became one of the main sources of income, selling donated items and handcrafts from overseas. • Oxfam developed probably the first fully comprehensive fair trade programme (‘Bridge’) in the UK - sales of fairly traded products rose throughout the 1970s and 1980s. • A mail-order catalogue was also started, which boosted annual sales above £1 million by the early 1980s. • Oxfam changed its fair trade programme’s name to the Oxfam Fair Trade Company to bring it in line with the wider Fair Trade movement. • The Fairtrade Foundation was set up by Oxfam, CAFOD, Christian Aid, New Consumer, Traidcraft Exchange, and the WDM. 1980s
Hinweis der Redaktion
- Give the consumer choice has been the retailing mantra of modern age. Newspaper reports about the growth of Fairtrade in Britain have typically focused their attention on the role played by the British shopper. Journalists have reported that, ‘Britons over the past decade have become a nation of ethical shoppers.’ Some have looked to investigate, ‘How consumer power sparked a Fairtrade revolution on our high streets.’ Many academics have also followed this line of enquiry. Alex Nicholls and Charlotte Opal argue that ‘Fair Trade is entirely a consumer choice model, it operates within the larger free trade model of unregulated international commerce’. My research into the member organisations of the FTF has suggested that an alternative approach may well be more fruitful. I argue that the emergence of fair trade in late twentieth century Britain has only partly been the result of ‘the market’ responding to consumer demand and equally significant was the network of NGOs and ATOs. In contrast to the well documented consumer actions of the past - from food riots to boycotts, the origins of FT cannot be traced to an apparently spontaneous moment of consumer action. Instead, the growth of FT has relied heavily on NGOs and ATOs that have worked (since the early 1970s) to develop international supply chains and distribution networks, raise awareness of living and working conditions for producers in the ‘Third World’ and have engaged with retailers to persuade them to stock Fair Trade products. Drawing on his research findings of contemporary US campaigns targeting Starbucks, Michael Goodman has argued that ‘Activist groups are the fundamental vanguard fostering fair trade markets.’ Further he has stated that, ‘Fair Trade is more of a consumer-dependent movement for change rather than a consumer led movement.’ So are there limits to how far consumer choice can be seen as driver for change? Tim Lang has certainly argued that this is the case. Lang calls for a move away from consumer power, stating that consumers can’t be relied on to do the right thing. Lang’s solution is ‘choice editing’ – removing ethical hazards before a product reaches the consumer. The 2006 Sustainable Consumption Roundtable report, ‘Looking Forward Looking Back’, endorses Lang’s assessment, stating that, ‘The evidence suggests that, historically, the green consumer has not been the tipping point in driving innovation. Instead, choice editing for quality and sustainability by Government and business has been the critical driver in the majority of cases.’ This critique of individual action and consumer choice could be seen as a challenge to Fair Trade; but as with green consumerism, there is evidence that ‘choice editing’ has already been a significant driver for Fair Trade. The following two sections will explore local authority procurement and switches to Fairtrade by major brands in the context of ‘choice editing’.