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Gaining major brands as Fairtrade partners
Both in civil society and in politics and public administration as well as in trade and among consumers, the logo with the term “Fairtrade” has changed value concepts in many places. This is reflected by the products being so widespread. In Germany, for example, fairly-traded products can be bought in more than 42,000 shops; and then there are around 30,000 off-trade sales points such as bakeries. Fair trade in this country has enjoyed a two-digit growth rate for twelve years, and in 2016, it rose by another 18 per cent, with a turnover of 1.2 billion euros. This was announced by Dieter Overath, Managing Director of TransFair Germany, at the organisation’s Annual Press Conference in Berlin, Germany, in late May.
Nowadays, there are hardly any firms that do not compile a corporate social responsibility report. This responsibility towards society is also expressed in the procurement of products with the Fairtrade logo. For example, Deutsche Bahn, Germany’s largest railway company, has exclusively been serving fairly-traded coffee on its trains since April 2017, and this policy is to be extended to tea and hot chocolate. But are producers also benefiting from this trend?
The will is there ...
Merling Preza Ramos is Managing Director of the Nicaraguan Co-operative Prodecoop, and has been a FairTrade partner from the very start. With its 2,200 members, Prodecoop is celebrating its 25th anniversary next year. In spite of all the advantages of a secure sales market with minimum prices, fair trade providing access to new market segments and the social side-effects, the co-operative sells a mere 48 per cent of its harvest to TransFair. Last year, this was 2,111 tonnes, earning the co-operative a turnover of 900,000 US dollars.
The Prodecoop would like to fairly trade their entire harvest. But the market will simply not yield any more – trade is not taking up a sufficient amount of these products. Analyses demonstrate that the uptake of Fairtrade products by established chains represents a key to success. Nearly all coffee producers have listed such products. This is not the case with cocoa and rice, for instance. World-wide, there is not more than about 700 tonnes of fairly-traded rice. This would change overnight if major brands such as Uncle Ben´s or Oryza were to enter the market. “These companies really drive the increase in volume,” Overath explains. In Switzerland, for example, retailers Migros and Coop have fully shifted their own banana brands to Fairtrade goods. Now, Swiss consumers have hardly any choice but to buy fairly-traded bananas. According to Overath, this is also one reason why, at 69 euros, per capita expenditure on fairly-traded products there is the world record. In Germany, per capita sales are at 13 euros.
Retail traders have to participate
Instead of opting for Fairtrade bananas, like their Swiss colleagues do, German retailers use this tropical fruit as a consumer magnet. Almost every week, the banana is on sale as a special offer. Therefore, Overath would welcome the first conventionally produced Fairtrade banana in Germany. However, traders are not switching to this product because it would mean relinquishing their consumer magnet. And customers go along with this, reckoning with a price that cannot possibly be sustainable.
This is why gaining retail traders for Fairtrade products is at the top of the TransFair agenda. The aim is to achieve top placement in product listings and an expansion of the product range. This can enable fairly-traded products to be produced across the board by co-operatives and in an entire region. Only then could a new market segment be developed. So fairly-traded mobiles are still a long way off ...
Roland Krieg, journalist, Berlin/Germany