Brussels Development Briefings Does Fair Trade contribute to sustainable development? 16th April 2008 Fairtrade in the Mainstream of Food Retailing Dr Stephanie Ware Barrientos University of Manchester, UK [email_address]

Introduction Why – the growth of Fairtrade and ethical Consumerism in mainstream food retail? How – does Fairtrade relate to other ethical sourcing schemes? What – are the challenges and opportunities for Fairtrade as it grows?

Why – the growth of Fairtrade and ethical Consumerism in mainstream food retail?

How – does Fairtrade relate to other ethical sourcing schemes?

What – are the challenges and opportunities for Fairtrade as it grows?

Why – Growth of Fairtrade Rapid growth in Fairtrade: 40% rise in FT sales value - $2.3 billion 2006 Widening product range (food and non-food) Small Producers – falling prices, trade liberalisation, livelihood pressures Consumers – rising incomes, global information, travel, social awareness Civil society – alternative trade, campaigns for trade justice, pressure for corporate social responsibility

Rapid growth in Fairtrade:

40% rise in FT sales value - $2.3 billion 2006

Widening product range (food and non-food)

Small Producers – falling prices, trade liberalisation, livelihood pressures

Consumers – rising incomes, global information, travel, social awareness

Civil society – alternative trade, campaigns for trade justice, pressure for corporate social responsibility

Mainstreaming Fairtrade in Supermarkets Increasing supermarket dominance in food retailing (80% in UK) Supermarkets - 56,700 of 78,900 (72%) FT points of sale in EU countries (FINE 2005) Rise in supermarket ‘own brand’ FT products (25% all UK FT products 2004) Rationale: consumer focus, high value sales, full product range, quality assurance of FLO label, corporate social responsibility

Increasing supermarket dominance in food retailing (80% in UK)

Supermarkets - 56,700 of 78,900 (72%) FT points of sale in EU countries (FINE 2005)

Rise in supermarket ‘own brand’ FT products (25% all UK FT products 2004)

Rationale: consumer focus, high value sales, full product range, quality assurance of FLO label, corporate social responsibility

How – Does Fairtrade relate to other ethical sourcing schemes? Niche Mainstream Fairtrade Labelling: price, social premium, fairer commercial relations, certification – producer cooperatives & ‘plantations’ Environmental/social schemes: many, often less onerous certification Ethical Trade: company codes of labour practice, workers rights, social auditing Corporate social responsibility: preferred supplier, producer support, social reporting

Niche

Mainstream

Fairtrade Labelling: price, social premium, fairer commercial relations, certification – producer cooperatives & ‘plantations’

Environmental/social schemes: many, often less onerous certification

Ethical Trade: company codes of labour practice, workers rights, social auditing

Corporate social responsibility: preferred supplier, producer support, social reporting

Example: Ghanaian Cocoa Kuapa Kokoo cooperative - only Fairtrade certified LBC in Ghana cocoa (approx 4% FT) Main shareholder behind Devine Chocolate Co-op supermarket – FT ‘own brand’ chocolate supplied by Kuapa Kokoo Chocolate manufacturers – social responsibility schemes (eg. Cadbury Cocoa Partnership)

Kuapa Kokoo cooperative - only Fairtrade certified LBC in Ghana cocoa (approx 4% FT)

Main shareholder behind Devine Chocolate

Co-op supermarket – FT ‘own brand’ chocolate supplied by Kuapa Kokoo

Chocolate manufacturers – social responsibility schemes (eg. Cadbury Cocoa Partnership)

Harvesting and opening cocoa pods Cocoa pods on the tree

What – are the challenges and opportunities for Fairtrade? Challenges: Sourcing from ‘plantations’ with workers Complex supply chains of new products (eg cotton) Negotiating with supermarket buyers Level of supermarket commitment to FT Tensions between commercial and social FT objectives Opportunities: Expansion of FT sales Opportunities for new FT products More producers access to FT and export markets Meeting FT goal of increasing fairness in trade

Challenges:

Sourcing from ‘plantations’ with workers

Complex supply chains of new products (eg cotton)

Negotiating with supermarket buyers

Level of supermarket commitment to FT

Tensions between commercial and social FT objectives

Opportunities:

Expansion of FT sales

Opportunities for new FT products

More producers access to FT and export markets

Meeting FT goal of increasing fairness in trade