March 19, 2007
Fair Trade is Big Biz in U.K.
At the rate “fair trade” sales are going in the U.K., it may not be long before merchants such as Marks & Spencer and others begin to refer to the do-good imports as “great-trade” products.
“They’ve gone from the margins to the mainstream quite fast,” Professor Tim Lang, an expert in food policy at London’s City University, told The Christian Science Monitor.
Sales of fair trade items in the U.K. grew to nearly $500 million last year, a 46 percent jump from 2005. Today, Marks & Spencer only sells fair trade coffee and tea. Sainsbury only sells fair trade bananas.
“It’s part of a whole change of mood around the way we want to live our lives,” said Helen Browning, food and farming director of the Soil Association, a charity that promotes sustainable farming practices. “There’s a recognition that the consumer society and values of the 1980s have worn thin, and people are looking for something more real.”
Nova Smith, a volunteer who helps at her church’s fair trade sales events, explains it a bit differently. “People feel it’s a small thing they can do to make a difference. You can’t change the world, but you can do a little bit that helps.”
Some
believe that fair trade will follow a similar upward climb as organic foods
did in the U.K.
“The tipping point came when we started getting retailers doing 100-percent [fair trade] for certain products,” said Barbara Crowther of the Fairtrade Foundation. “In terms of volume and range of product available to the consumer, the U.K. is the world’s leader.”
According to The Monitor, many view the fair trade business as being driven by upscale consumers.
Mr. Lang sees it differently. “There is strong evidence that [fair trade] has a cross-class appeal,” he said.
Discussion Questions: Is there such thing as a tipping point for products such as organics and/or fair trade items where sales suddenly explode upward? Is that what has happened in the case of fair trade goods in the U.K. and is it likely to happen here? What do you think the response to fair trade goods says about the difference between consumers in the U.S. and the U.K.?
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I believe Fair Trade will reach a tipping point here in the US at some time in the future. We’re not there now, that is for sure; but as its broader “green” macro trend continues to rise in popularity so will Fair Trade’s. The UK, which as noted has taken the leading role in this type of social responsibility for developed nations, demonstrates awareness comes not over night, but rather iteratively–not due to a lack of significant effort, but rather a lack of larger sourcing manufacturers who employ Fair Trade practices.
One of the larger issues is the enforcement of Fair Trade practices. The definition of fair trade varies from advocate to advocate. The overriding loose definition follows the ethics of providing fair living wages and safe working conditions to adult factory or farm workers, usually in developing nations. But no central guidelines or rules have been put in place to ensure validity, much less Fair Trade’s development and expansion to all foods and consumer products.
In addition, except for coffee growers, there is no official international certifying body out there to police manufacturers in oft far-flung locations. So at least for the time being, Fair Trade will live under the umbrella of many grassroots factions. This isn’t necessarily a bad thing as fair trade practices can morph more nimbly in its nascence behind smaller organizations. But at some point, they will have to come under at least a federation of like-minded groups to put them into more widespread action.
So what can retailers and suppliers do to help as the tide rises on consumer’s social consciousness? They can look at their purchasing practices, which often resort to downward pressure on prices and lead times that limit sourcing organizations’ ability to reform their labor practices. A group called the Ethical Trading Initiative recently issued a report on the state of ethical sourcing, its core challenges, and steps need to overcome these barriers. Other groups have also indicated that retail and supplier companies sourcing goods in other countries need to take a look at their willingness to change their purchasing practices to support fair trade. This alone will have greater effect on fair trade “compliance” than organizations monitoring and reporting on such practices.
Consumer demand eventually will create a tipping point here in the US. But, the retail industry won’t be able to fulfill that demand unless free trade becomes more prolific in countries of manufacturing origin. And, the buck will have to stop here for that to happen.
First things first, a tipping point? Probably not. I think it’s more a gradual awakening and realisation that individuals can make a difference and that the way we (I mean Americans and Western Europeans) live can and does have an impact on people all over the world. Sometimes for better, sometimes for worse. Although many of us–Americans especially–have been brought up to believe we can do and achieve anything, that belief has been quite seriously eroded over the past few decades, leaving many people feeling helpless to control their own lives let alone influence matters outside our own personal experience. The climate of fear many of us feel could make things go either way–it may make us try harder to have an influence or it may leave us nervously awaiting the end of the world, however it is likely to come. Fair Trade, even more than organics, comes into this. If we believe (and please excuse the Tinker Bell-ish sounding message of hope), then we can make an impact.
Next, can it happen in the US? Which of us haven’t heard the saying, only in America. Of course it can. Anything can happen in America. But likely? I never say never and especially now when so many unlikely things that few forecast have happened, certainly it is possible and maybe likely although I have my doubts.
And finally, the difference between consumers in the US and UK. Oddly enough, I would say actions speak louder than words. Americans (and please remember that I am one so don’t take offense) are far more self-centred. Although so much money is given to charities, I think less time and consideration are. It’s easy to hand over a bit of cash and feel that you’ve ticked the do-good box but less easy to actually modify a lifestyle. Especially those busy lifestyles about which Americans nowadays complain/boast so much; too many people are too busy to have time for slowing down long enough to think. And so far as I know, there are no Fair Trade convenience products on the market yet. Perhaps when the factories start churning out boxes of ready meals they will make a hit. But as long as Fair Trade products are fresh things that require time and effort to put on the table, they are less likely to make an impression on American consumers. And the Fair Trade cotton t-shirts will have to have designer labels but bargain basement price tags to make any impact. Basics with a message are not likely to appeal to enough people to be significant in any way.
Having said all this, I am very surprised at the speed with which British consumers have taken Fair Trade to their hearts and trollies. It was only 10 or so years ago that the first few products were being sold in village halls and door to door by the worthiest of believers. Now they are mainstream in the extreme and many of the most well known campaigners are justifying the involvement of the bigger manufacturers and retailers who have seen the light–as Anita Roddick (of the Body Shop) said recently, “Big can also be fair…business makes things happen.”
At the mid and even upper end of the economic spectrum, the cost difference between organics and fair trade food products is fairly trivial.
This is especially so for organics, if they are perceived (rightly or wrongly) as better for you.
So, for lower priced goods/food products, the train has already left the station, as evidenced here by Whole Foods, Wild Oats and even Wal-Mart’s success with organics.
Fair trade products at high pricer points I think would be a different story…. I guess, obviously, consumers will be less likely to favor fair trade products if it means paying another $100 or whatever for the washing machine.
But it could be even here that finding and driving offshore suppliers to a level that is considered “fair trade” won’t have that much of a price difference even for more higher priced goods.
Fair trade’s 46% sales jump sounds like a lot, but the $500 million total is a tiny fraction of the potential. More and more, sustainability, fair trade, social responsibility, humane treatment of animals, and “natural” will become a united marketing position, combined together. A consumer with one of these priorities is likely to want them all.
We see fair trade as the new feel-good frontier and in more than just coffee. Unlike organics’ difficult-to-substantiate benefits, fair trade products provide quantifiable results that will resonate with consumers. In apparel, companies like Fair Indigo (launched by former Lands’ End e-commerce chief, Bill Bass) are competing against the likes of J. Jill and Chico’s on price, quality and style while raising pay for workers on Peru, China, Nepal and other far-away lands. By shifting profits away from wholesalers and toward workers, fair trade companies can do good while keeping prices competitive. Mr. Bass estimated that fair trade garments could make up as much as 15% of the $250 billion U.S. apparel market within 9 years and that number sounds quite achievable to me.
Fair Trade may not have reached a tipping point yet but in some product categories it could be getting close. As this is an issue mainly concerned with third world primary producers, I don’t think we’ll see fair trade washing machines any time soon. That said, it could well be a challenge to the traditional way that big retailers do business, especially the way they treat their suppliers. The term “partnership” rarely does justice to the one sided relationship, where the retail giant constantly squeezes the supplier on price. This is a direct challenge to that way of doing business and consumers are catching on to this issue–record profits for the likes of Wal-Mart and Tesco, while tea and coffee producers are being paid pennies per kilo. It will get increasingly harder to justify that sort of business ethos and fair trade will continue to grow perhaps until these retailers genuinely address the part they play in causing these issues in the first place.
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I believe Fair Trade will reach a tipping point here in the US at some time in the future. We’re not there now, that is for sure; but as its broader “green” macro trend continues to rise in popularity so will Fair Trade’s. The UK, which as noted has taken the leading role in this type of social responsibility for developed nations, demonstrates awareness comes not over night, but rather iteratively–not due to a lack of significant effort, but rather a lack of larger sourcing manufacturers who employ Fair Trade practices.
One of the larger issues is the enforcement of Fair Trade practices. The definition of fair trade varies from advocate to advocate. The overriding loose definition follows the ethics of providing fair living wages and safe working conditions to adult factory or farm workers, usually in developing nations. But no central guidelines or rules have been put in place to ensure validity, much less Fair Trade’s development and expansion to all foods and consumer products.
In addition, except for coffee growers, there is no official international certifying body out there to police manufacturers in oft far-flung locations. So at least for the time being, Fair Trade will live under the umbrella of many grassroots factions. This isn’t necessarily a bad thing as fair trade practices can morph more nimbly in its nascence behind smaller organizations. But at some point, they will have to come under at least a federation of like-minded groups to put them into more widespread action.
So what can retailers and suppliers do to help as the tide rises on consumer’s social consciousness? They can look at their purchasing practices, which often resort to downward pressure on prices and lead times that limit sourcing organizations’ ability to reform their labor practices. A group called the Ethical Trading Initiative recently issued a report on the state of ethical sourcing, its core challenges, and steps need to overcome these barriers. Other groups have also indicated that retail and supplier companies sourcing goods in other countries need to take a look at their willingness to change their purchasing practices to support fair trade. This alone will have greater effect on fair trade “compliance” than organizations monitoring and reporting on such practices.
Consumer demand eventually will create a tipping point here in the US. But, the retail industry won’t be able to fulfill that demand unless free trade becomes more prolific in countries of manufacturing origin. And, the buck will have to stop here for that to happen.
First things first, a tipping point? Probably not. I think it’s more a gradual awakening and realisation that individuals can make a difference and that the way we (I mean Americans and Western Europeans) live can and does have an impact on people all over the world. Sometimes for better, sometimes for worse. Although many of us–Americans especially–have been brought up to believe we can do and achieve anything, that belief has been quite seriously eroded over the past few decades, leaving many people feeling helpless to control their own lives let alone influence matters outside our own personal experience. The climate of fear many of us feel could make things go either way–it may make us try harder to have an influence or it may leave us nervously awaiting the end of the world, however it is likely to come. Fair Trade, even more than organics, comes into this. If we believe (and please excuse the Tinker Bell-ish sounding message of hope), then we can make an impact.
Next, can it happen in the US? Which of us haven’t heard the saying, only in America. Of course it can. Anything can happen in America. But likely? I never say never and especially now when so many unlikely things that few forecast have happened, certainly it is possible and maybe likely although I have my doubts.
And finally, the difference between consumers in the US and UK. Oddly enough, I would say actions speak louder than words. Americans (and please remember that I am one so don’t take offense) are far more self-centred. Although so much money is given to charities, I think less time and consideration are. It’s easy to hand over a bit of cash and feel that you’ve ticked the do-good box but less easy to actually modify a lifestyle. Especially those busy lifestyles about which Americans nowadays complain/boast so much; too many people are too busy to have time for slowing down long enough to think. And so far as I know, there are no Fair Trade convenience products on the market yet. Perhaps when the factories start churning out boxes of ready meals they will make a hit. But as long as Fair Trade products are fresh things that require time and effort to put on the table, they are less likely to make an impression on American consumers. And the Fair Trade cotton t-shirts will have to have designer labels but bargain basement price tags to make any impact. Basics with a message are not likely to appeal to enough people to be significant in any way.
Having said all this, I am very surprised at the speed with which British consumers have taken Fair Trade to their hearts and trollies. It was only 10 or so years ago that the first few products were being sold in village halls and door to door by the worthiest of believers. Now they are mainstream in the extreme and many of the most well known campaigners are justifying the involvement of the bigger manufacturers and retailers who have seen the light–as Anita Roddick (of the Body Shop) said recently, “Big can also be fair…business makes things happen.”
At the mid and even upper end of the economic spectrum, the cost difference between organics and fair trade food products is fairly trivial.
This is especially so for organics, if they are perceived (rightly or wrongly) as better for you.
So, for lower priced goods/food products, the train has already left the station, as evidenced here by Whole Foods, Wild Oats and even Wal-Mart’s success with organics.
Fair trade products at high pricer points I think would be a different story…. I guess, obviously, consumers will be less likely to favor fair trade products if it means paying another $100 or whatever for the washing machine.
But it could be even here that finding and driving offshore suppliers to a level that is considered “fair trade” won’t have that much of a price difference even for more higher priced goods.
Fair trade’s 46% sales jump sounds like a lot, but the $500 million total is a tiny fraction of the potential. More and more, sustainability, fair trade, social responsibility, humane treatment of animals, and “natural” will become a united marketing position, combined together. A consumer with one of these priorities is likely to want them all.
We see fair trade as the new feel-good frontier and in more than just coffee. Unlike organics’ difficult-to-substantiate benefits, fair trade products provide quantifiable results that will resonate with consumers. In apparel, companies like Fair Indigo (launched by former Lands’ End e-commerce chief, Bill Bass) are competing against the likes of J. Jill and Chico’s on price, quality and style while raising pay for workers on Peru, China, Nepal and other far-away lands. By shifting profits away from wholesalers and toward workers, fair trade companies can do good while keeping prices competitive. Mr. Bass estimated that fair trade garments could make up as much as 15% of the $250 billion U.S. apparel market within 9 years and that number sounds quite achievable to me.
Fair Trade may not have reached a tipping point yet but in some product categories it could be getting close. As this is an issue mainly concerned with third world primary producers, I don’t think we’ll see fair trade washing machines any time soon. That said, it could well be a challenge to the traditional way that big retailers do business, especially the way they treat their suppliers. The term “partnership” rarely does justice to the one sided relationship, where the retail giant constantly squeezes the supplier on price. This is a direct challenge to that way of doing business and consumers are catching on to this issue–record profits for the likes of Wal-Mart and Tesco, while tea and coffee producers are being paid pennies per kilo. It will get increasingly harder to justify that sort of business ethos and fair trade will continue to grow perhaps until these retailers genuinely address the part they play in causing these issues in the first place.