But is the concept in some danger of being exploited for its marketing potential? Carolyn Watt and Sean McAllister investigate
When Tesco launched its own label Fairtrade range last week to coincide with Fairtrade Fortnight, Fairtrade Foundation deputy director Ian Bretman hailed it as proof that Fairtrade had finally gone mainstream.
And as the 10th anniversary of the Faitrade mark is celebrated, it does seem that after years as a fairly niche sector aimed at supporting coffee, chocolate and fresh produce suppliers in poorer parts of the world, it has suddenly stepped up a gear with everyone from Tesco to tampon manufacturers claiming ethical credentials.
But why the sudden interest? And whether it is the Fairtrade mark itself or under a looser definition of corporate social responsibility, are retailers and manufacturers really changing the way they do business? Or does this represent just the latest marketing wheeze?
There’s little doubt there has been an explosion of consumer interest in ethically traded goods - and not just the bananas with which the initiative was first strongly associated. Ethical consumption in the UK was worth £19.86bn last year, according to a recent report published by the Co-operative Bank’s Ethical Purchasing Index. It estimates that £6.9bn was spent on ethical goods and services while £7.4bn went on ethical financial services. Approximately £1.77bn was spent on fair trade and organic food.
Meanwhile, the number of products with the Fairtrade mark rose to 250 last year, while sales shot up 46% to £92m and shoppers were spending over £2m a week on Fairtrade products by the end of the year.
Fairtrade has come a long way since the mark first appeared on Green & Black’s Maya Gold chocolate, Cafédirect and Clipper Fairtrade Tea in 1994.
Many brands are now mainstream brands in their own right. Cafédirect, for instance, is the sixth biggest cofffee brand in the UK and has just launched a public shares issue, which it hopes will raise £5m to boost its marketing funds.
Consumers are driving the trend and it’s not just because they have suddenly developed a collective social conscience. Brands like Green & Black’s chocolate are popular for their high quality.
“There has been a quiet revolution,” says Harriet Lamb, executive director of the Fairtrade Foundation. “Once the systems and procedures were in place, the whole Fairtrade concept has been an incremental awareness raising exercise but people just get it. It captures people’s imaginations without big advertising budgets.”
She adds: “Contrary to supermarket logic, people are concerned with more than just price. Fairtrade, backed by a vibrant social movement of people throughout the country, is now bedding into the mainstream, giving thousands of producers in developing countries the chance to build a better future and compete in the all-too-cut-throat global markets.”
Bob Doherty, head of sales and marketing at Day Chocolate Company, which uses only cocoa produced by the Kuapa Kokoo co-operative of Ghanaian growers for its Dubble and Divine brands, adds: “What we have tried to do in our values is bring the consumers and producers closer together.”
Consumer support is one thing. But the sudden step change of the past couple of years is largely down to the multiples, which have all increased the number of fair trade brands they stock and are now upping the ante in own label.
The latest to step up its commitment to Faitrade is the Co-operative Group. Last week it pledged to double the size of its own label range. It currently has 40 own label and 22 branded Fairtrade products.
Meanwhile, Asda has announced it is going to add another 30 branded Fairtrade lines and Asda and Sainsbury are organising tasting and awareness campaigns in an effort to raise the profile of their offerings.
The current groundswell of support from the retailers is likely to open the door to new suppliers and it won’t be long before the big manufacturers recognise the marketing potential in ethical branding, suggests Andy Farr, head of R&D at Millward Brown.
He argues that ethical branding marks the final evolutionary step for brands in a competitive and information-rich market. “The most successful brands promote a sense of dynamism, visibility, immediacy and contemporary relevance,” he says.
“They innovate while they are ahead rather than letting a competitor detect an emergent gap quicker than they do.”
At the moment, ethically produced goods make up just 1.5% of total UK food and drink sales. Traidcraft marketing director Stuart Palmer says: “I think the big brands are missing a trick not to launch them. I don’t think they’ve got an excuse for not doing so. Providing they did it with integrity, we’d welcome that.”
Indeed, he adds, there is a strong commercial case for launching ethically produced goods. “Many product sectors and brands are being squeezed on margin. Fair trade is a great way to give you more room for manoeuvre and create a genuine benefit for that brand which is hard to steal.
“It doesn’t have to be done on a sympathy ticket but on adding interest to the product ticket. People are interested in the provenance of ingredients of the food they eat, where it’s come from, where it’s grown. Fair trade gives it to you on a plate. It’s about offering more choice to consumers.” Not everyone is convinced, however. Cafédirect’s head of marketing Sylvie Barr says she would be surprised if Nescafé launched a Fairtrade line as this would imply that its other coffee brands were not fairly traded.
Integrity, of course, is key. Only goods that undergo strict monitoring can qualify for the official Fairtrade mark.
Add to that the fact that corporate social responsibility has suddenly become big news, with boycotts by ethically minded consumers costing big brands £2.6bn last year and 52% of people claiming to have avoided at least one product, and it becomes harder still to make unsubstantiated claims.
But there is always a danger the ethical tag could be devalued by companies unscrupulously cashing in - not least because while Fairtrade is regulated, the terms “fair trade” and “ethical” are not.
Whether the new raft of fair trade companies do view it primarily as a marketing wheeze or not, they’ll have to demonstrate some level of genuine commitment in the new era of corporate social responsibility.
As Mark Barthel, the market development manager for environment and sustainability at the British Standards Institute, points out: “Successful firms can no longer afford to ignore ethical practices. The pressure is from all directions; government is encouraging business to be more environmentally responsible; consumers are demanding higher ethical standards; pressure groups are becoming more articulate and sophisticated and communities are demanding a stake in decision making”.
From bananas, coffee and chocolate to fairly traded footballs and fabrics, said to be next on the list, fair trade really could be the new organic, it seems.