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Fair trade more than just a hill of beans

April 23, 2008

7 Min Read
Fair trade more than just a hill of beans

Now in its 10th year, TransFair USA is the only third-party certifier of fair-trade products in the United States. Since 1998, the nonprofit has certi?fied more than 74.2 million pounds of fair-trade coffee, auditing transactions to ensure a just price and fair working conditions. The fair-trade certified label has enabled some of the poorest communities of Latin America, Africa and Asia to earn $60 million more for their harvests than they would have selling to local intermediaries, according to the organization. We asked Anthony Marek, TransFair USA director of external communications and public relations, "What's new in the fair-trade movement?"

Marek: What's happening with fair-trade certified is mainstreaming, similar to organics. A lot of folks call us the next organics. When you look at organic trend lines, 20 years ago no one had heard of it. It was a French thing, and now everybody—even mainstream grocery stores like Safeway—is launching their organic lines, and that's happening with fair-trade certified. For example, you can buy fair-trade certified ground coffee in the 39-ounce can in all of the 600-plus Sam's Club stores across the nation.

NFM: What have been the effects of the mainstreaming, both in terms of challenges and opportunities?
Marek: Because fair-trade certified is on the radar now, you see more and more people trying to get a piece of that action. And so you're starting to see more labels out there saying that they're "equi-trade" or "sustain-a-trade"—make up whatever you want. And to a certain extent, it's causing some label confusion. But we're also seeing that now 27 percent of American consumers recognize the fair-trade certified mark and understand what that label means, and we have a pretty high conversion rate: More than half of the people who recognize and understand the fair-trade certified label actually will go the extra mile to buy that product. The organization started 10 years ago with three folks and just coffee, and now we're looking at more than 700 partners in more than 40,000 retail locations. I think the only challenges are challenges any organization experiences with growth. I would characterize all that as positive. When you look at the Sam's Club coffee product, which is sourced in Brazil, that more than quadrupled the amount of fair-trade certified coffee that comes from Brazil into the United States, and that's helping another 4,000 farmers and their families in Brazil. So if anything, it's more of a scaling challenge, but it's not anything we can't handle and we ramped up appropriately to handle the challenge.

NFM: How does mainstreaming affect price and competition between small shops and larger retailers?
Marek: The question about price is always an interesting one because you have to give me apples and apples, and usually it's apples and oranges. Let's say you want to open Jessica's Coffee. You might be buying really expensive, gourmet Ethiopian coffee, and the coffee shop next door to you might be buying a less expensive blend. And theirs might be fair-trade certified, too, because they're paying the fair-trade certified price, too, but it's a less expensive grade of coffee. So, it depends on the product. Sam's Club is the only one doing a 39-ounce ground can of coffee, so there's really no fair-trade certified price-point comparison for that sort of product. Their coffee is being roasted on the ground in Brazil, which saves them transportation costs because of the weight. And just like in anything else, you're going to see price leveraging through volume.

NFM: The Fair Trade Labeling Organization International recently increased the minimum price for coffee. How will that move change the market?
Marek: The increase is on the minimum price, and right now the world coffee market is not affected, but we continually evaluate the cost of production because it's all about the integrity of the label, and we want to make sure that minimum price is appropriate. So if there is a world coffee crisis—if there is a world price drop—we want to make sure that we walk our talk, and that fair-trade certified is paying farmers a sustainable living wage. That's what that's all about. But right now it has no impact on U.S. coffee prices or the U.S. coffee market.

NFM: How has the movement grown beyond fair-trade coffee?
Marek: For the first three years, the only product was coffee, and coffee is still the lion's share of product sales. It's like 85 percent to 90 percent of all of our volume. After that, we started certifying cocoa and chocolate and tea. We've got vanilla, bananas and other fresh fruit, sugar, herbs and now we just launched flowers.

NFM: What products have the most potential for sales growth?
Marek: I think probably the biggest opportunity is sugar as an ingredient. The most heavily shopped aisle in the grocery store in the United States is the cereal aisle, and most of those cereal products have some form of sugar in them. We see tremendous opportunity for fair-trade certified sugar as an ingredient, whether in beverages—even soymilk and rice milk many times have sugar in them—or products like cereal.

NFM: What's next for the U.S. fair-trade movement in terms of products?
Marek: We're still so young and the fair-trade certified movement is just starting to catch on in this country. There's opportunity for tremendous growth. We're looking at other products we can roll out in the U.S., and what makes it easier are the international standards. The fair-trade certified model is the European model, which started back in the '80s because of the international coffee crisis. We just launched flowers in September, but fair-trade certified flowers—roses, carnations, etc.—have been big in Europe for four or five years now. And so there's already somebody inspecting farms. We're constantly assessing whether there's a market in the U.S. for the products that are already certified somewhere else.

NFM: Is market acceptance the only factor that goes into deciding which products already fair-trade certified in Europe should be launched in this country?
Marek: No, there is stuff that is fair-trade certified in other countries that we're not comfortable with, and it's more like garments and textiles, because we're very concerned about the entire chain of the product. If you have cotton and it's fair-trade certified, what happens when it's made into a T-shirt? We don't want a garment with a tag that says fair-trade certified cotton, but some child was chained to a table making it into T-shirts.

In terms of food products, it is just a matter of acceptability. We have bananas in this country, which have yet to take off, and they're really big in Europe. A lot of that has to do with our partners. When Sam's Club says we're going to launch ground coffee and we're going to give it shelf space, that's huge for us. We look at the volume issue because our whole mission is about helping as many farmers and farm workers as possible. Flower workers, for example, are very low on the economic food chain, and their work is very difficult in difficult conditions. We have an opportunity to help those flower workers, who tend to be women, have guaranteed maternity leave, paid vacations, health care and child care.

NFM: Why do you expect that the movement will continue to grow?
Marek: Part of the whole fair-trade certified model is what we call the global farmers' market. We see an uptick of farmers' markets in this country because people want to know where their products came from. It's interesting to me that when deciding where you get your hair cut, who works on your car, we Americans take a lot of time. We ask our friends, we look online and see what people are posting; we want to know this person and have a relationship and trust them with cutting our hair and servicing our car. But we get to the grocery store and we buy whatever and we eat it. We, in many cases, have no idea where it came from. So I think we see this trend toward a global farmers' market because people are more concerned about the story behind where their food is coming from because they are putting it in their body. Most people can't fly to Costa Rica, Brazil, Ecuador, Nicaragua, and establish a relationship with the farmer, so we're the next best thing because we do send the inspector who looks the farmer in the eye. We audit the books. We know what they're doing. We're bringing that product back directly to the American consumer, and that fair-trade certified label is a guarantee that we looked that farmer in the eye.

Jessica Centers is a Denver-based freelance writer.

Natural Foods Merchandiser volume XXIX/number 3/p. 62

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