LS:N Global is a division of: The Future Laboratory
 

Can Fairtrade be saved?

08 : 08 : 2017 Food : Retail : Sustainability
Fairtrade Foundation Fairtrade Foundation

We are living in a time when ethical consumption is more mainstream than ever – for the most part, people care where their money is spent.

Daniela Walker, insight editor, LS:N Global

The Fairtrade movement has suffered repeated setbacks recently, with brands such as Sainsbury’s and Mondelēz International announcing that they are moving away from the globally recognised standard. And although these companies claim that their move has sustainability at its heart, it feels like a serious step backwards in a world in which corporations have begun to take more civic responsibilities into their own hands.

At The Future Laboratory, we talk a lot about Civic Brands – the idea that brands now wield the power that was once held by governments. This is something on which, to date, Fairtrade has had an exemplary record. The ethical standards food label is now one of the most globally well known – in the UK 80% of consumers recognise the symbol. The system works to empower farmers by offering them a minimum fair price for their products as well as a premium that is given to the farmers to choose how to spend on local social initiatives. Since its launch in 1992 it has become a £1.5bn/$2bn-a-year operation in the UK. So why are brands moving away from it?

Sainsbury’s – the world’s largest Fairtrade retailer – announced earlier this year that it was removing the Fairtrade label from its own-brand tea and would be replacing it with its own pilot scheme, Fairly Traded. Meanwhile, US confectionery corporation Mondelēz announced that every Cadbury brand would be moving from Fairtrade to its own Cocoa Life label, launched in partnership with Fairtrade. Even more startling was the announcement that its Green & Black’s chocolate, which was acquired by Cadbury in 2005 and has made a name as a Fairtrade and organic chocolate brand, will launch its first ever chocolate bars, Velvet Edition dark chocolate, that will have neither label.

But a powerhouse such as Mondelēz shows it is putting profit before people when it decides to launch a chocolate bar that completely abandons the ethical founding principles of the Green & Black’s brand.

Sainsbury’s says that its Fairly Traded scheme will be an update to Fairtrade practices, addressing farmers’ pressing needs such as climate change. Mondelēz stated that its Velvet Edition bar was created to meet consumer demand for a dark chocolate that was not as rich and complex as its Classic range, and that it could not source enough organic and Fairtrade cocoa beans to meet that need.

But why must every consumer need be met? Couldn’t brands be effecting change by limiting choice – like Volvo's move to only hybrid or electric vehicles? We are living in a time when ethical consumption is more mainstream than ever – consumers are demanding to know more about where their food comes from, who sews their clothes and what chemicals they put on their skin. Is this behaviour still relatively nascent? Yes. But a powerhouse such as Mondelēz shows it is putting profit before people when it decides to launch a chocolate bar that abandons the ethical founding principles of the Green & Black’s brand. Mondelēz’s Cocoa Life scheme is at least working with Fairtrade to ensure that a level of sustainable accountability remains, but Sainsbury’s break with Fairtrade is inherently selfish. Sainsbury’s claims that Fairly Traded will meet the same minimum standards as Fairtrade but, crucially, it will not be independently audited. Sainsbury’s is effectively making its own standards and then policing them.

There are problems with the Fairtrade system, and I agree with Sainsbury’s CEO Mike Coupe when he says that ‘farmers in the developing world are facing unprecedented challenges. More of the same just isn’t enough any more’. But retailers and brands breaking away from a recognised accreditation system cannot be the answer. Instead, they should pool their resources to make Fairtrade better. Otherwise, we will only see an increase of new brand-owned schemes that could lead to consumer confusion if there is not enough transparency in how they are run.

For more on how food brands are evolving their approach to sustainability and ethical production, download our latest Food and Drink Futures report.