What is Fairtrade?
Fairtrade is a trading partnership which seeks greater equality in international trade by offering improved trading conditions to farmers and workers in the developing world.
How is Fairtrade doing?
In July 2022 The Grocer published sales data from Kantar WorldPanel covering the UK sales of Fairtrade food and drink in the UK for the 52 weeks to April 17th 2022. Having enjoyed a 13.6% boost in the wake of the first lockdown, sales have shrunk 6% to £984m – faster than grocery’s overall decline of 4.4%. “The past year has been difficult for Fairtrade, with ethics seemingly being deprioritized by shoppers amid the squeeze of inflation on budgets” said Kantar analyst Domantas Smolskas. One counterpoint is that ethical consumerism proved resilient through the first two years of the pandemic. Senior Ethics And Sustainability Manger at the Co-op Barry Clavin points out that soaring inflation is “obviously not the first crisis we’ve had in the last 20 years in the UK. Every time we hit a crisis somebody wants to write the obituary for ethical consumerism. Despite all these bumps in the road, ethical consumerism in the UK has gone from being a niche, quite fragile market to a robust, mainstream one.” The weight of embedded shopper habits should help it survive the latest challenge, he adds.
Other interesting trends suggested by the Kantar data:
Fruit, veg and salads fell by 1% in value to £214m, but volumes grew by 32.4%. This resulted in an average price fall of 24.7% or 19p per pack
Excluding fruit, veg and salads the category saw a value decline of 7.3% to £770m with volumes falling by 7.4%
Deals grew by 50.4% in the last year, accounting for £40.8m of Fairtrade sales
Signs of shoppers trading down could be found in a shift to own-label: volume was up by 19.8% whilst sales of brands fell by 10.1%
The biggest volume declines (sweet home cooking, frozen confectionery) was due to comparisons with the lockdown boom in home-baking
Iceland was the retailer with the highest growth in Fairtrade sales at 45.4%, with Sainsbury’s sales falling by 8.3%. However Sainsbury’s still accounts for nearly a quarter of all Fairtrade sales. Tesco is the main underperformer with 24.4% of grocery share but only 12.8% of the Fairtrade category.
Fairtrade Sales Growth By Category
- Alcohol +£5.0m (+3.4%)
- Chilled Drinks +£2.2m (+2.9%)
- Biscuits -£1.0m (-3.1%)
- Fruit, veg and salads -£2.1m (-1.0%)
- Take Home Confectionery -£8.9m (-4.5%)
- Hot Beverages -£13.5m (-5.8%)
- Sweet home cooking -£19.5m (-31.1%)
- Frozen Confectionery -£20.5m (-20.6%)
What are the regulations covering the supply of Fairtrade products?
Unlike organic production, there is no statutory government or EU legislation concerning the production of Fairtrade food and drink. Instead, Fairtrade International acts as an umbrella organisation for Fairtrade-labelled products. Fairtrade International is responsible for:
- Setting international Fairtrade producer standards.
- Agreeing terms of trade for Fairtrade products.
- Monitoring the trade in primary and part-processed products to ensure compliance.
- Owning the registered international Fairtrade symbol.
What is the Fairtrade Foundation?
In the UK, Fairtrade International is represented by the Fairtrade Foundation (FTF) which:
- Licenses the Fairtrade logo for use on specific products.
- Monitors the supply chain of Fairtrade-certified products.
- Helps companies develop new Fairtrade products.
- Raises consumer awareness about Fairtrade.
What are the stages to becoming a Fairtrade supplier?
- The process of becoming a UK Fairtrade licensee is controlled by the FTF. New applicants must fill out an application form and sign a licence agreement prior to marketing Fairtrade products.
- The licensee is responsible for ensuring that every product they market complies with Fairtrade standards.
- The licensee is generally the last supplier in the supply chain – in the case of proprietary brands this will usually be the brand owner, while for private-label products the licence may be held by the brand owner or their immediate supplier.
- Once a licensee has started supplying Fairtrade-labelled products they provide quarterly reports to the FTF to verify the supply chain and trading terms for labelled products.These reports are audited annually by a physical inspection.
- Licensees pay a fee for the use of the Fairtrade symbol based on the net wholesale value of their sales in the preceding quarter. This fee is currently 2% for all products.
What is the range of Fairtrade food and drink currently available?
- Fairtrade International has currently developed Fairtrade standards for the following types of food and drink: coffee, tea, herbal tea, rooibos tea, green tea, chocolate, confectionery, cocoa, sugar, bananas, apples, pears, grapes, plums, lemons, oranges, mandarins, satsumas, clementines, lychees, avocados, pineapples, mangoes, grapefruit, fruit juices, smoothies, quinoa, peppers, green beans, coconuts, dried fruit, biscuits, cakes and snacks, honey, muesli, cereal bars, jams and preserves, seeds, chutney and sauces, herbs and spices, nuts and nut oil, soya, olive oil, wine, beer, rum, rice, yoghurt, ice cream and baby food.
What are the guidelines for Fairtrade products?
- For all Fairtrade-labelled composite (multi-ingredient) products, every ingredient that is covered by Fairtrade standards must be sourced under Fairtrade conditions in a supply chain originating from certified producers and traded only through registered traders.
- If the product contains more than 50% Fairtrade-certified content then it is automatically eligible for Fairtrade labelling.
- If the product contains less than 20% Fairtrade-certified content then it is not eligible for Fairtrade labelling.
- A product may qualify for the Fairtrade logo if it contains a single Fairtrade-certified ingredient and this ingredient represents more than 20% of the product’s dry weight.
- All composite products carrying the Fairtrade logo must indicate the percentage of Fairtrade ingredients on the product label.
- In 2015 Fairtrade International launched the Fairtrade Sourcing Programme (FSP) for companies that cannot achieve full Fairtrade certification but wish to use a single Fairtrade-certified ingredient or material in their products. This currently applies only to sugar, cocoa and cotton. This initiative is now known as FSI (Fairtrade Sourced Ingredient)
What is the cross-over between Fairtrade and organic?
Some products on sale in the UK carry both organic and Fairtrade logos, indicating dual certification. The two systems are complementary but there are some key differences.
Organic standards seek to produce high-quality food with minimum environmental impact, but they do not guarantee prices to producers or stipulate any particular social forms of production. Fairtrade standards have a social goal, stipulating minimum prices paid to producers and ensuring that producers in developing countries can gain more control over their lives. While environmental standards are important in Fairtrade, producers that are unable to meet organic standards are not excluded.