You’ve probably heard of the phrase ‘fairtrade,’ but what exactly does it mean, and how is a fairtrade product different from other products? Fairtrade companies are committed to social justice and human rights, and they work ethically with producers and farmers to promote better social and environmental outcomes for everyone. In the age of the ethical consumer, bearing a fairtrade logo on your products could help you attract more loyal customers, so you’ll want to know all about fairtrade and what it stands for.
WHAT IS FAIR TRADE?
Fair trade is a social movement that supports producers and farmers, usually in developing countries, by helping them obtain a fair price for their products. The aim is to reduce poverty in these countries and promote improved community, social, and sustainability outcomes. While standards vary depending on the specific fairtrade certification in question, fair-trade products are usually free of forced labour, poor working conditions, genetic modification, and unsustainable practices.
Fairtrade products usually have wholesale floor prices. This means crops and other products can’t be sold below a fixed price. Floor prices protect farmers and other producers from hardship during market fluctuations. Some fairtrade standards give producers and farmers a premium in addition to the minimum price.
Fairtrade practices can also involve working with producers and farmers to help them over the long term. Fairtrade networks and organisations assist these suppliers with developing skills, supporting community development, and protecting the local environment to ensure preservation of resources for future generations.
Many certification bodies cite direct trade with farmers and producers as a core principle. Direct trade eliminates the middle players, and allows farmers a bigger share of the final price. Other core principles include fair pricing, decent conditions for workers, banning of child labour, respectful communications, community development, respect for local culture, and environmental sustainability.
FAIR TRADE CERTIFICATION AND ORGANISATIONS
A number of different fair trade certification organisations exist around the world, and each differs slightly. Fairtrade International or Fairtrade Australia and New Zealand are probably the most widely known fairtrade associations. These non-profit associations have a 23-strong membership made up of producer networks and organisations. Fairtrade’s standards are focused on eliminating poverty and empowering producers in poor countries. They work with third-party certifier FLOCERT to make sure producers comply with the standards.
Fair Trade USA in the United States is a certifier of products like Fairtrade International. Fair for Life is a certification body that focuses on the production, manufacturing, and trading process, rather than the final product. UTZ Certified is concerned with similar principles, such as sustainability and safe working conditions, but does not guarantee a floor price.
The World Fair Trade Organisation and the Fair Trade Federation are other related organisations in the fairtrade landscape. These membership organisations are concerned with advocacy and communications, rather than certification.
FAIR TRADE PRODUCTS AND RETAIL COMPANIES
Thousands of products bear the Fairtrade mark or similar logos indicating they were produced and traded under ethical conditions. A number of retailers in Australia work with fairtrade producers and farmers, ensuring that consumers have ethical options to choose from.
Chocolate is one of the most widely available fairtrade products in the world. Cocoa farmers often fail to earn a liveable income for their families, and they face challenges in the form of diseases infecting their cocoa trees. Unethical working practices, such as child labour,ares common in the cocoa industry. By buying fairtrade chocolate, you can help cocoa farming in places like the Ivory Coast and Ghana become more sustainable.
Cadbury, Alter Eco, San Churro, and Green and Black’s are some of the companies that work with fairtrade products and have been certified by Fairtrade International. Mars uses only fairtrade-certified cocoa in its Mars bars.
There are around 30 million small-scale gold miners who work long hours to support their families and who are vulnerable to exploitation. Fairtrade gold allows small-scale gold miners to earn a sustainable income. Fairtrade networks such as Fairtrade International ensure that the miners they work with in East Africa and South America receive a guaranteed minimum price for their gold, as well as a premium to invest back in their businesses and communities. Retailers such as Larsen Jewellery, Nordhoff, Zoe Pook, and Soco use Fairtrade gold.
Reusable jute bags and cotton bags help consumers avoid generating excess plastic waste. Albury Enviro Bags, for example, supplies bags from Teddy Exports, a fairtrade supplier that’s a member of the World Fair Trade Organisation. Suppliers and workers are paid fair compensation and enjoy good employment conditions, and child labour and forced labour are eliminated from the supply chain.
Coffee is one of the most popular drinks in the world, but behind the morning cup of coffee are exploited farmers who struggle to support themselves and their families. Wide price fluctuations, sensitivity to weather conditions, and crop diseases and pests make it even harder for farmers and producers of coffee.
Fairtrade coffee ensures that farmers are paid fairly for their crop, and Fairtrade International provides farmers with a premium on top of the guaranteed fair floor price. Hundreds of coffee licensees bear the Fairtrade International logo, making it easy for consumers to make an ethical choice with their coffee.
Cotton is one of the most important crops for the textile industry, but cotton farmers and producers languish in poverty as the price of cotton slumps and costs of production soar. Fairtrade cotton gives these small-scale farmers a fair price so they can support their families and manage challenges in the form of climate change and water scarcity. In Australia, retailers such as Etiko, Bag People, Kathmandu, and 3Fish use Fairtrade-certified cotton.
Like coffee, the production of tea can be unethical and exploitative. In countries like India, workers and small-scale farmers are paid a tiny fraction of the retail price of the product. With Fairtrade-certified tea, consumers can be confident that workers and farmers are paid fairer wages and enjoy better working conditions. Retailers ranging from Coles and Clipper Tea to Nerada, Oxfam, and T2 buy from Fairtrade certified suppliers to bring ethical tea to Australian consumers.
Fast fashion is well-known for its poor treatment of workers and disastrous environmental practices, but fortunately growing numbers of ethical brands are making fairtrade options available to consumers. In Australia, there’s Shift to Nature, Thread Harvest, Oxfam, and numerous other retailers that supply fairtrade clothing.
Other fair-trade items
Sports balls, cosmetics, coconuts, and flowers are some of the other fairtrade items Australian consumers can buy. Socially conscious consumers can even enjoy fairtrade wine and ice cream from companies like Fairhills Wine and Ben & Jerry’s.
BENEFITS OF BEING FAIR TRADE FOR MARKETING AND PROMOTIONS
Fairtrade certification can be beneficial for marketing and promotional purposes. Businesses can explore different options when promoting their goods and services to ethical consumers and aspirationals.
The rise of the ethical consumer
90% of consumers expect companies to operate responsibly on social and environmental concerns. 84% of consumers seek out responsible products wherever possible and consumers are willing to pay more for sustainable products. 2.5 billion aspirationals exist in the world, and socially conscious millennials want to buy products that benefit society and the environment.
Consumers are willing to pay more for fairtrade items. and they’re less likely to be sensitive to price rises when the item is fairtrade. A study on coffee found a fairtrade label can boost sales by 10%. Having a fairtrade mark on a product can minimise the impact of price hikes.
Australian shoppers are more likely to buy if a product supports a social or ethical cause, with 80% of shoppers choosing the ethical product over another of similar price and quality. Environmental concerns and animal welfare are popular causes with Aussie consumers, and 70% of consumers believe ethical products are good value for money.
Appealing to ethical consumers
Given the rise of the ethical consumer, using fairtrade-accredited products and displaying a fairtrade logo on your products demonstrates to consumers that your company takes corporate social responsibility seriously. These eco-credentials give you an extra way to differentiate your business from the competition, and the fairtrade element alone can be an attractive selling point for consumers.
Fairtrade certification and using fairtrade products to highlight your brand can mean different things depending on your organisation. For smaller brands, it’s a way to garner extra attention and coverage. For new brands, it can allow businesses to position themselves as ethical brands. Established brands like Mars can benefit from using fairtrade ingredients, because it lends extra credibility and gives consumers reassurance that their purchase has an ethical impact.
Reaching these aspirational consumers through phones and apps could be an effective way to promote your ethical products and your socially conscious brand. Developing conversations, using social media channels, and tracking and reviewing analytics should be part of your ethics-focused marketing efforts. Treat the sustainability and ethical attributes of your product like any other product attribute and make it a selling point, but make sure your product has the promised functional value.
FAIRTRADE BENEFITS BOTH YOUR BUSINESS AND THE WORLD AT LARGE
How a product gets from producers to consumer isn’t always transparent, but fairtrade certification gives consumers and retail businesses the certainty that farmers and producers are receiving a fair share of the price. With the rise of the socially conscious consumer, fairtrade certification can be a critical selling point, so businesses will do well to highlight their efforts in working with fairtrade networks and suppliers.