rganic food is in the doldrums, Tesco has ditched its eco-labels, and a number of veg box schemes have struggled during the recession. You could be forgiven for thinking ethical concerns were a thing of the past.
But despite the supermarkets’ relentless focus on price over the past few years, sales of Fairtrade products have bucked the trend. In the seven years to 2010, sales grew from £150m to nearly £1.2 billion.
Last year’s sales figures are still being kept under wraps, but double-digit growth is expected, according to Richard Anstead, who is in charge of product management, grocery, at the Fairtrade Foundation.
Fairtrade Fortnight, the organisation’s main publicity and awareness drive, is coming up from 27 February to 11 March. The theme for this year is Take a Step for 2012, which will encourage consumers to take a small step, such as buying Fairtrade coffee or chocolate for the first time, or writing to their supermarket asking it to stock more Fairtrade products. The organisation wants to get 1.5 million people to take part.
No doubt the growth of Fairtrade is partly down to the relentless focus by the Foundation on converting big brands to the cause. Sainsbury’s and Waitrose both committed to stocking only Fairtrade bananas in 2007; it was a move that more than doubled the market for Fairtrade bananas in the UK.
The Foundation’s strategy for the past five years has been called Tipping the Balance, and with names such as Cadbury’s also coming on board and Tesco recently committing to convert a percentage of its bananas to Fairtrade, it appears to be working.
However, it’s not all been plain sailing. Anstead admits some produce lines have been delisted during the economic downturn. “It’s fair to say it’s been a challenging time for products like citrus, partly due to price pressures in the market. A lot of retailers need to talk about the value of their products in the current recession and there has also been a challenge ensuring availability all year round.”
There is also a distinct lack of Fairtrade vegetables in the marketplace, and no new Fairtrade produce lines are due to be introduced for 2012. Instead, says Anstead, the strategy is to “broaden and deepen” availability of existing lines such as bananas, where there are strong established supply chains in place.
This means working with farmers such as those in the Windward Islands who lost nearly everything in Hurricane Tomas in 2010. Fairtrade Foundation CEO Harriet Lamb has just returned from the Windward Islands and says the Fairtrade premium ($1 per 18.14kg box of bananas), which is paid into an account controlled by a democratically elected worker group, has helped the farmers replant their trees and also spend money on re-establishing local infrastructure, including in one case a hospital. Some believe the premium has even helped save the banana industry in the islands.
Becoming accredited as a Fairtrade supplier is not a simple process. It takes around six months and involves rigorous auditing to ensure the standards of the producer group take into account environmental, economic and social standards. It costs around €1,500 for the initial auditing and certification, and there are then regular checks. “We have a three and a six-year development cycle where the liaison officer will work with the producer group. Development, which is at the heart of what Fairtrade is trying to do, takes time, so being certified for one year and selling product at a premium is obviously beneficial, but real benefit comes from real long-term investment and long-term commitment from retailers and consumers,” says Anstead.
However, the very existence of a premium is a matter of contention. Some economists argue the fact Fairtrade farmers get a premium distorts the free market and means when world prices collapse for a particular product, non-Fairtrade farmers bear the full brunt and suffer disproportionately because the minority who grow Fairtrade products are sheltered from the storm.
Anstead argues the free market has comprehensively failed many farmers in developing countries, and Fairtrade is slowly helping to restore the balance. “If producers aren’t empowered to demand and secure a stable cost of production, then the traditional market is failing them,” he says. “Many producers are unable to enter a relationship where they can negotiate a price; they are price-takers rather than price-setters. Companies like Cadbury’s are coming to work with Fairtrade because they know if they don’t invest in a sustainable cocoa industry, the current market dynamics and the current free market is driving people out of cocoa and the products we are reliant on won’t be around tomorrow. So it is a response to areas of the free market that are failing consumers.
“In an ideal world it would be great if we weren’t needed,” he adds. “It is a shame Fairtrade is needed. But Fairtrade has allowed the Windward Islands to move up the value chain. They are now not just banana growers, but banana exporters, and while it is disappointing that the market as it was is failing them, it is exciting that the impact that we have had means they are able to move from being subsistence farmers into businessmen taking the initiative to take a large part of the value chain.”
Aside from retail, Anstead says foodservice is a growing area for Fairtrade. At this year’s Olympic Games, the Foundation has got agreement from the organisers that all bananas served to athletes, staff and at all food outlets will be Fairtrade. And major foodservice companies are sourcing more Fairtrade produce.
Retailers are also making further commitments. Sainsbury’s says that by 2020 it will also have converted all its pineapples and avocados to Fairtrade and expects sales to top £1bn. The Co-operative has also made a massive commitment, promising that 90 per cent of its primary commodities sourced from developing countries, such as fresh fruit, spices and rice, will be Fairtrade by 2013.
In addition Anstead says he expects that there will be further commitments from other retailers during 2012.
Half of UK consumers now say they buy Fairtrade at least once a month; it is mainstream. The tipping point seems to have been reached and the question now is how far Fairtrade can go from here. -
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