Fairtrade goes mainstream — with a little help from the Co-operative Group

HELPING HAND ... Brad Hill with children in Malawi who directly benefit from the Fairtrade scheme

February 23 2010

The annual Fairtrade Fortnight, (until March 7th) is set to be the biggest yet with major national brands now carrying the Fairtrade Mark. Here, Michelle Henderson, Public Relations Manager (Food) at The Co-operative Group, asks Brad Hill, the Group’s Fairtrade Development Manager, how the market is shaping up since The Co-operative launched its own strategy to bring Fairtrade into the mainstream over a decade ago . . .

Michelle Henderson: The Co-operative has been supporting Fairtrade for many years. Are sales still holding up in stores?

Brad Hill: It’s quite incredible to see such a sustained growth. Every year we have experienced increased sales, and 2009 was no exception with a further 25 per cent uplift. I don’t recall any sector ever having demonstrated such a performance. While the availability of major brands is beginning to drive further growth, as a supermarket we continue to track ahead of the national sector, which given how long we have been supporting Fairtrade is a tremendous achievement.

MH: So other supermarkets are not threatening The Co-operative’s leadership in Fairtrade?

BH: We continue to offer the widest Fairtrade grocery range available, having switched more categories and launched more Fairtrade lines than any other supermarket.

Until a few years ago, we were the only supermarket giving any meaningful support to Fairtrade and the work we did in those early years is still widely acknowledged.

In independent research for Marketing Week (January 7th) carried out by Lightspeed Research, when asked which brand came to mind in association with Fairtrade, The Co-operative came out top of all the brands, including Cadbury, despite its high-profile media campaign about switching Dairy Milk to Fairtrade. The Co-operative scored 40 per cent, with the score for the best other supermarket at just seven per cent. Given our overall share of the grocery market sector, it seems that even many customers of other supermarkets recognise our leadership!

Our democratic base remains a real point of difference, and the power of our own members, who relentlessly drive the Fairtrade message locally, should not be underestimated. As well as playing a key role in the growth of Fairtrade Towns and community groups, our active members make sure that The Co-operative remains the most important supermarket supporter of Fairtrade campaigns.

MH: Does the acquisition of Somerfield create challenges in terms of securing more Fairtrade supplies?

BH: There is a belief that Fairtrade supplies are limited, but this is not the case. In most cases, only a minority of a producer’s output is sold as Fairtrade and there is plenty of scope for us to secure more. We do not anticipate any problems in widening the availability of Fairtrade products into our enlarged store estate.

We have, of course, been focussing across the business on Somerfield range harmonisation and this has already seen the addition of many of our Fairtrade products to these stores. Core categories such as chocolate, tea and coffee are now available as Fairtrade in Somerfield stores for the first time. Prior to the acquisition, Somerfield had a very low share of the Fairtrade sector, so the opportunity here is huge in terms of incremental sales and benefits for producers.

The challenge is not securing supply, but creating awareness and understanding with our new customers, who previously would not have been exposed to Fairtrade in store, in order that they begin to buy in to the concept and the ranges.

MH: Do you feel that consumers actually understand what the FAIRTRADE Mark means?

BH: Over three quarters of the population recognise the Mark and with major brands beginning to engage with Fairtrade, its reach is set to increase considerably which is fantastic news.

In our experience there are different levels of customer understanding of Fairtrade. There are a lot of customers who buy Fairtrade on the basis that they know it does good, and have trust in the brands that carry it. That’s enough for them to know and, as busy people doing a quick shop, their commitment goes no further.

At the other end of the spectrum, are the informed consumers and activists who seek out the Fairtrade choice, as they understand just what an impact Fairtrade can have on the lives of the producers.

It is this understanding that motivates purchase and makes the real difference and that’s why we have invested so heavily in telling the Fairtrade stories — from producing DVDs of interviews with growers to hosting producers and touring the country with them at events. We want to build awareness, convert this into understanding and ultimately motivate people to always look for Fairtrade.

MH: With big brands turning to Fairtrade, what is your reaction to what many claim to be the hijacking of the sector by multinationals?

BH: Our vision was always to mainstream Fairtrade, and, along the way, we have actively campaigned for major brands as well as other supermarkets to follow our lead to achieve this. But Fairtrade can only truly be mainstream with the support of all the major supermarkets and some big brand names behind it.

MH: Why do you feel Cadbury (Dairy Milk) and Nestlé (Kit Kat 4 finger) decided that now is the right time to move some of their products to Fairtrade?

BH: Well, you would have to ask them, but it’s something we have been waiting for for years! In 2002, when we switched all our own-brand chocolate bars to Fairtrade, we launched a campaign for other supermarkets and the major brands to follow. This didn’t happen quickly and we were rather left to prove the commercial case on our own. This, of course, we did, and we have moved from market push to market pull as consumers have become increasing concerned about ethics and support for Fairtrade has built. There is a proven market demand there now, so going Fairtrade makes more obvious commercial sense than it did in the very early days, when only the most ethically-driven organisations, like The Co-operative, committed.

When we went 100 per cent Fairtrade on own-brand chocolate bars, cocoa prices were at a 30-year low and so the on cost of going Fairtrade was substantial. The majority of this cost was absorbed by The Co-operative in order to keep retail prices at an acceptable level. Today, with cocoa prices thankfully at strong levels the ongoing cost of Fairtrade is limited to the Fairtrade premium of just $150 per tonne, so again it makes now the right time to move. The key thing, of course, is that Fairtrade is about long-term commitment, and brands have engaged on this basis for which they should be applauded. Major brands are criticised for not doing enough, but we like to think they have taken the first steps, and we look forward to many more as they work their way to switching more products and ranges to Fairtrade.

There is also the wider issue of food security, and investing now in Fairtrade and supporting growers at source will help brands create future sustainability and help protect them from future issues such as the potential effects of climate change on crops and population explosion putting severe demands on supply.

MH: Do you imagine that other big-name brands will attempt to gain Fairtrade certification this year?

BH: I think we will see more — I certainly hope so. The bar has been raised and there are enough major brands now proving that Fairtrade is the right way to go, almost giving license for others to engage.

In general terms, consumers continue to become increasingly ethically aware and are more inclined to seek out ethical options. Fairtrade has established itself as the most simple and effective way of supporting producers in developing countries, and the fact that Fairtrade sales continue to grow and that major brands are visibly supporting Fairtrade should persuade other brands to consider moving, too.

We are keen to see the ongoing mainstreaming of Fairtrade, and will strive to continue to set the example and the pace to ensure sustained market growth and that more and more producers and workers throughout the developing world benefit from the Fairtrade system.

This feature is sponsored by The Co-operative Group.

Category: Retail Societies