The Business Case for Fairtrade

Since its launch in 1994, the FAIRTRADE Mark has become established as a credible, independent consumer guarantee for products that help producers in developing countries get a better deal from international trade.

Introduction
Fairtrade Labelling is an international system of standards for producers, and terms of trade for their goods that ensure farmers, workers and their families in 59 developing countries are adequately protected and can build a more sustainable future. Over 7.5 million people in these countries are benefiting from increasing sales of Fairtrade certified products in over 20 national markets across Europe, North America, Japan, Australia, New Zealand and Mexico.

Range of products
The FAIRTRADE Mark currently appears on a range of products including coffee, tea, cocoa, fresh fruit, juice, honey, wine, dried fruit, nuts and sugar, and non-food products such as flowers, sports balls and cotton products. The Mark can also be found on composite products that use these ingredients in conjunction with others that are not covered by Fairtrade standards, such as hot chocolate drinks, snack bars, chocolates, biscuits, cakes and beers. The range of Fairtrade certified products (products carrying the FAIRTRADE Mark) is growing all the time and standards for new categories will be introduced on a regular basis over the next few years.

Market overview
Since 1997, retail sales of Fairtrade certified products in the U.K. have been growing by an average of 50 percent per annum and were running at an estimated retail value of £700m in 2008. The Fairtrade Foundation has licensed over 4,500 products to carry the FAIRTRADE Mark and we estimate that 27 percent of bananas carried the FAIRTRADE Mark by the end of 2008 (20 percent in 2007), and 10 percent -12 percent of coffee (8 percent in 2007), and 9 percent -10 percent of tea (4 percent in 2007). Overall, the estimated retail value of products carrying the FAIRTRADE Mark increased by 43 percent over 2007, bucking the global downturn.

Consumer data
Results of the many market research surveys conducted over the last few years indicate that there is growing awareness of, and potential demand for, Fairtrade certified products. Fairtrade shoppers are also very loyal to their beliefs.

Figures from TNS Omnimas show that the FAIRTRADE Mark is now recognized by 70 percent of the UK public, up from 57 percent in 2007. TNS Worldpanel research found over 70 percent of UK households bought Fairtrade goods in 2008, up from 67 percent in 2007.
Free poll found 96 percent of consumers would be willing to pay extra for products they perceived to be ethical.
GfK NOP research showed that 95 percent of consumers feel it is important that all companies treat producers and suppliers fairly and practise Fairtrade.

Benefits to producers
Many farmers and workers in developing countries struggle to provide for their families. Poor market access and unfair trade rules often mean that the price they get for their crop does not cover the cost of production. Our recent report Fairtrade and the Global Food Crisis proves that Fairtrade is helping to offset the worst impacts of the crisis for poor farming families in the developing world. For example, sugar growers in Malawi now spend 80 percent of their income on food compared to 50 percent a year ago. The Fairtrade price means they can carry on putting food on the table and the premium empowers them to maintain levels of investment in community development through this challenging time.

Fairtrade is a rapidly growing international movement which seeks to guarantee a better deal for farmers and workers in the developing world. A product that is Fairtrade certified carries a label, the FAIRTRADE Mark.

Fairtrade allows people in the UK to make a difference to the lives of poor farmers and producers all over the world, thanks to corporate will and customer demand.
Gareth Thomas, Parliamentary Under-Secretary of State for Department for International Development and Department for Business, Enterprise and Regulatory Reform at the Fairtrade Foundation Commercial Conference 2007

When Oxfam and our partners first established the Fairtrade Foundation in 1992, no one could have anticipated the enormous impact that Fairtrade would have on the hearts, minds and shopping habits of the British public, and in business boardrooms country-wide. Fairtrade has become a part of everyday life for millions of people in the UK, offering a practical way for shoppers to help break the cycle of poverty for farmers in the developing world.
Barbara Stocking, Director, Oxfam GB