Buoyed by changing consumer values and increasing interest from major corporations, the Fairtrade movement has gathered pace in many European markets over recent years, and sales of Fairtrade foods, such as bananas, coffee and chocolate, have grown rapidly. Ben Cooper reports on a campaigning and, more crucially, a brand-marketing success story.
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What is Fairtrade? A simple enough question at first glance but this phenomenon is harder to categorise than it first appears. It is a campaign certainly, aimed at gaining farmers in the developing world a fairer price for their produce, but it is more than a pressure group. It has been an enabler, setting up commercial relationships between producers and distributors and retailers, and also functions as a certification scheme too.
However, as the movement has expanded and developed, it has arguably taken on its most important characteristic, and one which is likely to be extremely crucial during the next phase of its development. Fairtrade is a brand.
Last weekend, the Swiss Fairtrade organisation, Max Havelaar Foundation (Switzerland), took on the internationally recognised logo of Fairtrade Labelling Organisations International (FLO), the Bonn-based organisation to which some 20 national schemes are now affiliated. This means that 19 of the 20 countries now carry the same branding. Fairtrade is not just a brand: it is an international brand.
But its status as a brand goes beyond what it says about the current level of consumer awareness. Gaining consumer support has of course been vital but it is the Fairtrade movement’s willingness to engage with major manufacturers and retailers that has allowed it to make the most of that heightened awareness, making the quantum leap seen in markets like the UK in recent years possible. In spite of setting itself against the exploitation of developing-world producers by multinational corporations, Fairtrade prides itself on being a business-friendly organisation.
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By GlobalData“If you want to have an impact in the developing world you need to have an impact at the consumer end,” says FLO chief executive Rob Cameron, who sees the Fairtrade story in some ways as a journey “from the back of the church hall to the supermarket”.
Fairtrade’s preparedness to partner with companies such as Nestlé has attracted criticism from other quarters of the campaign community but Cameron believes the critics are not looking at the bigger picture, insisting that engagement with big business is vital, provided that basic principles are not jettisoned in the process.
“We do want to work with organisations that are willing to engage with us but we’re not going to be making grand compromises, or water down our standards or enter into special arrangements,” Cameron says. But at the same time, he maintains, “we need to recognise that if we want to maximise sales we need to be able to move at a pace that suits larger players.”
This view is endorsed by Tuulia Syvänen, managing director of the Fairtrade labelling organisation in Finland, Reilun kaupan edistämisyhdistys ry. “I think basically you have to treat the companies as friends and not enemies,” Syvänen says. “We are still an NGO but we are very business-friendly. We want to make the changes through a relationship with business and companies.”
Syvänen sees the recruitment of multinationals as vital in achieving bold aims such as having a 100% Fairtrade banana market in Western Europe within five years. “If we didn’t work with Nestlé, Fyffes or Dole we couldn’t get where we want to be. If we want to do 100% Fairtrade bananas in Western Europe we have to work with everybody. We have to look to the future and not the past.” Syvänen also sees the development of a Fairtrade relationship with a major corporation as a means to establish a dialogue through which other broader CSR issues can be addressed.
Partly by dint of having the largest per capita consumption of coffee in the world and being a large consumer of bananas, Fairtrade has prospered in Finland with current per capita expenditure on Fairtrade products of more than EUR6, fourth highest in the world. In addition to claiming 12% of Finland’s large banana market, Fairtrade accounts for more than 20% of the fresh pineapple category. Finnish retailer Siwa has committed itself to carrying 100% Fairtrade bananas, oranges and pineapples.
Key to speaking the same language as major corporations has been the expansion and development of the international logo. “Now broadly speaking we can show that we have a common face and looking at it from the licensee/retailer side we can show that we are an increasingly unified proposition,” Cameron says.
Cameron gives short shrift to critics who suggest Fairtrade is being used by major corporations for “window-dressing”. He sees the progress the movement has made – and its approach to partnering with business – as being part of a “fundamental shift” in thinking in the business world over the last decade with regard to corporate social responsibility (CSR).
Regarding another criticism of Fairtrade, that it disrupts the free market and artificially supports failing systems, Cameron is also resolute in his response. He says it is “patently absurd” to suggest that farmers should simply diversify into more profitable crops. In fact, he sees Fairtrade as a way to give farmers the wherewithal to make those kinds of choices in the future.
As for the idea that it distorts the market, Cameron maintains that the guarantee of a minimum price to suppliers and the premium that is often paid by the consumer are in essence “marketing instruments”, while Ian Bretman, deputy director of the Fairtrade Foundation in the UK, believes such criticism to be “ill-informed and poorly researched”.
Cameron believes that rather than distorting the market, the price guarantee and premium underlines the value that consumers see in the Fairtrade marque, thereby endorsing its status as a brand. “Sometimes consumers are paying a premium at the check-out but clearly the marque has value in the eye of the consumers. I tend to think about Fairtrade being a brand for development – a trade system that encourages empowerment.”
The growth of Fairtrade sales across a number of markets would seem to endorse the organisation’s pragmatic approach to dealing with the commercial world.
The fact that Switzerland has only recently embraced the international Fairtrade logo should not be taken as evidence of a slow take-up. Just the reverse is true in fact. At EUR18, per capita consumption of Fairtrade products in Switzerland is higher than any other country, thanks in part to the fact that the country’s food retail sector is dominated by two players who both endorsed the idea early on.
This, says Regula Weber, spokesperson for Max Havelaar Foundation (Switzerland), took Fairtrade “into the mainstream from the beginning”. Today, Fairtrade accounts for more than 50% of the total banana market in Switzerland.
With Fairtrade so firmly established in Switzerland, the decision to change the logo was not easy but Weber says the organisation had decided the time was right for a change.
“We wanted to have a modern logo,” Weber tells just-food. “The other was eight years old and had an ‘alternative’ touch. We wanted a new logo with a modern touch.” Weber also says Max Havelaar Switzerland was keen to unify with the other partner organisations. “There is a strategic aspect of having a unique international logo. In a global world you need to be globally organised.”
The degree to which the partner organisations see themselves as part of a broader international movement, particularly as each labelling initiative has its own unique composition of NGOs and charities, would also appear to be a strength of the movement, and one that multinational corporations would appreciate.
Notwithstanding the high per capita consumption in Switzerland, arguably the beacon market for Fairtrade remains the UK. “We are seeing a huge interest in what is happening in the UK from elsewhere in the world,” says Bretman.
However, in spite of the fact that Fairtrade sales as a whole rose by 80% last year, with food products growing by about 70%, Ian Bretman sees no room for complacency. “It’s very encouraging. We probably have quite a good foothold in the mainstream market. We don’t want to sound complacent. We are very confident that we can take Fairtrade to another level. We think that Fairtrade could become the norm in some categories.”
As in other markets, bananas and coffee are the staples in the UK but progress is being made in other areas such as chocolate, nuts and rice, while further innovations in the pipeline include seafood and soya.
However, while markets like the UK are undoubted success stories, there are other regions where the Fairtrade movement has made far less progress. Bretman attributes the bias towards Northern European markets to the historic NGO-led international development culture in these countries. In southern Europe the picture is certainly less rosy. Spain and Italy are fledgling markets at best while Greece does not yet have an official Fairtrade labelling scheme. So challenges remain but buoyed by recent success the Fairtrade movement seems prepared to face them.
