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 enables farmers and workers 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 the world’s most marginalised 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 more than 20 consumer 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 including fashion items and school wear. 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 regularly over the next few years.

Market overview
Since 1997, retail sales of Fairtrade certified products in the UK have been growing by an average of 50 % per annum and were running at an estimated retail value of £799m in 2009. 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 % in 2007), and 10-12 % of coffee (8 % in 2007), and 9 -10 % of tea (4 percent in 2007). Overall, the estimated retail value of products carrying the FAIRTRADE Mark increased by 12 %over 2009, 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 demand for, Fairtrade certified products. Fairtrade shoppers are very loyal to their beliefs and purchasing Fairtrade labelled goods gives consumers a powerful way of reducing poverty through their everyday shopping.

Figures from independent market research firms show that despite the recession consumers are spending more on Fairtrade products with the average spend rising by 5.5%, 67% of UK households purchasing Fairtrade goods in 2008 – up 3% on 2007 – and UK public recognition of the FAIRTRADE Mark increasing to 72% in 2009.
Free poll found that 96 % of consumers would be willing pay extra for products they perceived to be ethical.
GfK NOP research showed that 95 % of consumers feel it is important that all companies treat producers and suppliers fairly and practice 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 % of their income on food compared to 50 % 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 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

Support, advice and guidance

The Fairtrade Foundation’s Business Development team are dedicated to providing end-to-end support through the process of Fairtrade certification. We will work with you to source Fairtrade commodities and ingredients using an existing supply chain. Alternatively we can help you to set up supply chains using your own suppliers.

We’d love to hear from you if you’re interested in launching a range of products carrying the FAIRTRADE Mark – find out more about what’s involved here