Post Categories: October 2014

Trending Tastes: Fair Trade Offers Fair Benefits for Consumers, Producers—and Retailers

The first thing many people think of when they hear the words “fair trade” is coffee. And for good reason—that’s where the fair trade concept got its start. But today the practice of promoting and certifying products produced according to high ethical standards extends to chocolate, tea, sugar, spices, body care products and beyond. Over 800 companies produce more than 12,000 fair-trade certified products that line retail shelves across the U.S.—and sales are estimated at nearly $2 billion, according to Fairtrade International, a global fair-trade certifying group. Experts predict the market will only continue to grow as more consumers seek out all things natural and look to “do good” through their purchases.

The “goodness” of fair-trade products isn’t necessarily a health claim. Rather, it’s an assurance that the goods were produced in an environmentally sustainable way and that the workers (often small farmers living in developing countries) are paid a fair and guaranteed price for them by CPGs. Workers on fair-trade farms get special labor protections to ensure they are not subject to unsafe working conditions. Chemicals that are harmful to humans can’t be used in the production of fair trade products. And a portion of the price of fair trade products goes toward further development within the workers’ communities.

To ensure goods are actually produced according to these high standards, they must be certified by a governing body, such as Fair Trade USA or Fairtrade International. With a “Fair Trade Certified” label, the majority of consumers are willing to pay up to eight percent more for a product, a recent study from researchers at Harvard, MIT and the London School of Economics showed. The same study also showed that promoting a product as fair trade can help increase sales by up to 13 percent.

In the U.S., natural foods stores, such as Whole Foods, are still the primary marketplace for fair-trade certified goods. But some leading CPGs have recently started to increase their stakes in the game. For example, Starbucks started selling fair trade coffee in 2000 and today, over 33 million pounds of the coffee they purchase annually is fair trade certified. Coca-Cola now uses fair trade tea leaves for its Honest Tea® line, and PepsiCo was the first beverage producer to introduce fair-trade certified coconut water in 2014 (under the Naked® brand).

Coffee still leads the way in fair-trade certified sales. But consumer demand for other goods is growing. For example, Whole Foods has increased its fair-trade certified chocolate selection by 350 percent in the last 5 years in response to shopper demand. And global production of fair-trade cocoa, sugar, tea and bananas have also increased sharply as more and more shoppers want to know exactly where their food comes from, how it’s produced and what kind of impact it has on the world.