Passing the GBP1bn (US$1.6bn) mark in the UK is a significant milestone for Fairtrade but in spite of its mainstream success, the organisation aims to retain its campaigning ethos. Harriet Lamb, executive director of the Fairtrade Foundation, told Ben Cooper how.
Since its inception, the Fairtrade movement has defied sceptics and is still doing so. As it kicks off Fairtrade Fortnight, the Fairtrade Foundation reports that in spite of the recession Fairtrade retail sales rose by 40% in 2010 to reach GBP1.17bn.
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Harriet Lamb, the Fairtrade Foundation’s executive director, feels “a huge sense of achievement” at breaking the GBP1bn mark, though amid the euphoria is looking ahead to the next milestone, targeting sales of GBP2bn by the end of 2012. “We’re at the first billion. It is a breakthrough. I think it’s a really critical moment but really we’re just at the beginning.”
Much has been made of the success of Fairtrade in the UK over the years. It is said to have led the way in the ethical market, through its campaigning and market presence, helped to raise awareness around poverty in the developing world and played a part in increasing social responsibility among mainstream companies, shown most vividly by the likes of Tesco, Nestlé and many others launching Fairtrade products.
As if that were not enough, Fairtrade in the UK has acted as a beacon for the Fairtrade movement internationally.
What is not to like? Well, somewhat surprisingly Fairtrade has its critics. Some say it distorts the free market, others that its high profile eclipses other campaigns and ethical labels. Activists worry that companies use the mark as ‘greenwash’ while failing to address issues in their core businesses.
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By GlobalDataOn the first criticism, qualified support came from an unlikely quarter in November when the free-market think-tank, the Institute for Economic Affairs (IEA), stated in a report that the Fairtrade model does not “intrinsically deviate from the principles of fair trade”.
While happy that the report, which did have some more critical observations, failed to endorse a prevailing criticism, Lamb says whether Fairtrade distorts free trade or not is not the critical issue.
“We intervene in markets all the time,” she says, citing legislation over minimum wage and health and safety as examples. “The debate is not about whether you intervene, it’s about how you intervene, what are you trying to achieve and who is benefiting and who is paying the price.”
As it happens, the Fairtrade Foundation is currently campaigning for an end to EU and US cotton subsidies. These are the truly “catastrophic” interventions for the poor in developing countries, says Lamb, and “should be ended”.
Arguably, if it is to counter accusations that it has become rather “corporate” or worse still is being exploited by big business, Fairtrade needs to retain its campaigning identity and the cotton campaign is, according to Lamb, the “latest example of maintaining our campaigning cutting edge”. In fact, she believes the commercial success helps the campaigning cause, sending “a very clear signal” to government that the public wants trade to be made fairer.
The Fairtrade Foundation also looks to retain its ethos by “working really hard to encourage, foster and nurture growth of the 100% Fairtrade brands” and by retaining strong links with its grassroots support.
Fairtrade Fortnight is about celebrating the grassroots side of Fairtrade and the coming two weeks will see as many as 12,000 events. The core supporters are “the beating heart of Fairtrade”, Lamb says, and “very, very far from the corporate world”. The grassroots campaigning spirit behind the mark is also what “makes Fairtrade unique and is indeed why the public trusts us”.
Assessing quite how Fairtrade has bucked the recession may depend on one’s view of human nature. Lamb insists that it comes down to the “decency of the public who have stood by their values and stayed incredibly loyal.” She adds: “Once you know about Fairtrade, it’s kind of hard to ‘unknow’ it. Once you’ve made that step and started purchasing Fairtrade it’s a hard habit to drop.”
A more cynical view is that the growth owes more to large corporations, notably Cadbury and Nestlé, converting big brands to Fairtrade. There certainly has to be some truth in that. Fairtrade chocolate sales quadrupled in 2010 to GBP342m and it is now the largest Fairtrade sector. While volumes of coffee and tea grew by 16% and 5% respectively, some sectors fell away, though interestingly the most notable examples were non-food categories, namely flowers and cotton.
In any event, 40% growth cannot be discounted even if it has come substantially from the new high-volume brands. As Lamb points out, the pundits who predicted that ethical sales would crumble in the recession got it wrong not only because they failed to read the mood of the public but also because they failed to understand corporate trends. Strong signals from the public “made it possible for companies to stay with Fairtrade”.
So to a degree it is a question of chicken and egg but being open to big business is clearly not a moral dilemma for Fairtrade. Lamb says the organisation has always been “principled but pragmatic”, and its approach to large corporations is the most palpable example of that pragmatism.
“Unashamedly our ambition is to take Fairtrade to scale because at the end of the day there are millions of farmers queuing up to join Fairtrade. Once you’ve got partners like Cadbury it really does give you the possibility to bring about the more significant change that we want to see.”
The challenge of how the Fairtrade model, focused primarily on smallholder farmers, can be taken to a significantly larger scale has also been a cause of scepticism. However, Lamb feels that again the sceptics fail to see the full picture. Once more, she points to the organisation’s pragmatism and its preparedness to adapt its model in order to expand into new areas, albeit while “always staying true to our principles”.
On the delicate question of Fairtrade’s popularity possibly eclipsing other ethical labels, Lamb is a little more guarded. Fairtrade makes no apology for its marketing savvy but the suggestion that its dominance might disadvantage other worthy causes is one it takes seriously.
In fact, Fairtrade International recently signed a joint statement with Sustainable Agriculture Network (SAN)/Rainforest Alliance and UTZ aimed at fostering greater cooperation between the organisations while acknowledging that “healthy competition” can exist between the schemes in the marketplace.
Lamb agrees that Fairtrade’s dominance ultimately comes down to the dynamics of the market. As with brands some labels may capture the imagination more than others, some may be managed better. Once they catch on the momentum builds. The likes of Cadbury and Nestlé are likely to favour the most popular scheme. Ultimately, Lamb says, “we have to let the public decide and the public have very clearly voted for Fairtrade.”
It may not exactly be ‘dog eat dog’ in the world of ethical labelling schemes but there is no doubt that Fairtrade knows how to promote, and how to defend its brand.
Lamb insists the organisation “remains very much an NGO” and its emphasis on grassroots campaigning and the social entrepreneurship evident in the 100% Fairtrade brands supports that. But she sounds like a marketer, like someone who knows and understands consumers and appreciates the challenges and nuances of the marketplace, the embodiment perhaps of Fairtrade’s dual status as both a campaigning and a marketing phenomenon.
