Magazine article Marketing

Fair Chance for Fairtrade?

Magazine article Marketing

Fair Chance for Fairtrade?

Article excerpt

Fairly traded products are driving growth in their categories with a high-quality offer. Jane Simms asks whether they can ever become mainstream.

The British public drinks 1.7 million cups of Fairtrade tea, coffee and cocoa every day and eats 1.5 million Fairtrade bananas in a week.

Every second of the day in this country, pounds 2 is spent on Fairtrade products, and sales of goods bearing the Fairtrade mark have risen by 90% to pounds 63m over the past two years, reflecting their growing adoption by consumers.

Impressive in itself, this growth also bucks the trend in some mainstream categories - most notably tea and coffee, which are either static or declining.

Last week, a 24-hour lobbying drive was organised by the Trade Justice Movement, the umbrella organisation for non-governmental organisations such as the Fairtrade Foundation and Traidcraft. The event, 'Scale Up for Trade Justice', saw members of the public lobby MPs across 500 constituencies for fair trade, which aims to improve the position of poor and disadvantaged producers in the developing world by helping them become involved in international trade.

The companies involved buy direct from producers, paying them an additional 'social premium' (3% of turnover), which is used to improve social conditions, economic infrastructure and farming methods Fairtrade producers and firms conform to strict criteria set, monitored and certified by the Fairtrade Foundation.

The growing popularity of Fairtrade brands owes as much to improved product quality, range and marketing as it does to the rise of the ethical consumer.

Fairtrade goods were once a worthy, 'ethnic' and sometimes slightly ragged buy from charity or health-food shops by 'alternative' consumers or middle-class ladies with a conscience. They are now glossily marketed premium products.

The first Fairtrade-marked product, Green & Black's Maya Gold chocolate, appeared on supermarket shelves in 1994. Now more than 130 retail products in the UK carry the Fairtrade mark, including coffee, cocoa, chocolate, tea, fresh fruit, sugar, fruit juices and honey. Fairtrade brands now account for 15% of the total UK roast and ground coffee market and 3% of all major retailers' banana sales.

Despite increased product development and high-profile activities such as 'Scale Up for Trade Justice', Fairtrade's biggest obstacles to further growth into the mainstream market remain ignorance and apathy.

Research conducted earlier this year by MORI for the Fairtrade Foundation found that while 25% of consumers are aware of the Fairtrade mark, fewer than 5% buy Fairtrade goods regularly.

And while 83% of them intend to act ethically, only 18% of them do so even occasionally.

Sylvie Barr, head of marketing at Cafedirect, says: 'We have proved that you can be socially oriented as well as highly commercial.'

While sales of tea and instant coffee are declining at between 1% and 2% a year, Cafedirect's brands are growing at 33%. 'Fairtrade is a key driver of the category growth in the supermarkets,' says Barr.

It has achieved this success on a fraction of the budget available to its multinational competitors. 'We are ruthless with our return on marketing investment,' says Barr, who over the past three years has shifted brand perceptions from charitable-niche to premium mainstream.

Understanding that having a broad range of products is important, it launched espresso and decaffeinated brand extensions in March, and in June introduced the UK's first 100% Fairtrade drinking chocolate.

Expansion strategy

Yet as Barr admits, although supermarket endorsement has given Fairtrade a considerable fillip, the next challenge is to sell more of its products.

'The way to do that is to reassure consumers about the quality, while communicating the benefits of the business model,' she says. …

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