When McDonalds, Dunkin’ Donuts and possibly Wal-Mart have joined your club you know you’ve gone mainstream, but is that a good thing?
That moment is here for fair trade coffee, but not everyone is celebrating what some fear is more of a marketing gimmick that could compromise the values of the founding principles.
Before the Brand
Today, fair trade coffee has become as recognizable as the latte, but three decades ago it was a new concept when European importers began collaborating with farmers rather than trying to save a few pennies on the pound.
It didn’t become an official label until the late eighties when world coffee prices plummeted and a fair trade certification scheme was set up in the Netherlands.
In the US, it all began in 1986 when three food co-op managers left their jobs and invested $100,000 of their own money, and that of family and friends, to try to forge “a closer connection between people and the farmers we all rely on.”
Their company, Equal Exchange, struggled to educate the American consumer on the very foreign concept of fair trade. After several years touring college campuses, health food stores and religious institutions, the company began to break even and finally, in 1991 they joined the European fair trade organization (they joined the American counterpart when it was launched in 1988).
Mainstreaming the Ideals
Today, consumers can wake up to a whole new morning landscape of mass market providers less interested in grassroots campaigning and more eager to take advantage of the powerful image makeover provided by a label.
Starbucks began selling fair trade coffee six years ago in response to a consumer boycott. Dunkin’ Donuts switched to fair beans in 2003 and just last year, struggling to catch up and re-coop morning business, McDonald’s tried to get in on the action offering fair trade java in 600 stores.
The label went fully mainstream this year when Wal-Mart, America’s most notorious abuser of worker rights in its own country, began testing ethical coffee in its Texas stores.
In a climate where more than half of those who have heard of fair trade coffee buy it, the label has become good marketing strategy, but while companies are moving quickly to take advantage of the ethical market, consumers aren’t so fast to accept the message from just anyone.
When a workers advocacy group began criticizing McDonalds’ hypocrisy for not giving their domestic workers- in this case Florida tomato pickers- the same “fair” deal, McDonalds pulled back on their fair trade marketing (rather than offering their pickers one penny more per pound as Taco Bell did in 2005).
The Flavor of Fair
The sudden switch to ethical coffee for companies that weren’t founded for that sole purpose has given the label more widespread exposure, but it has also meant the adoption of the concept in a much more selective way. Instead of going 100% fair trade like Dunkin’ Donuts, Starbucks has added the label like just one more flavor to choose from amongst their forty different blends.
While ethical coffee alum admit the entrance of companies like Starbucks has raised the visibility of fair trade way beyond its humble roots – Starbucks claims to be the biggest seller of fair trade coffee in North America- those with more altruistic incentives question the validity of being less than 100% fair while still reaping marketing points.
Seattle supermarket chain PCC began selling only fair trade beans (as well as organic and shade-grown) a few years ago making the ethical decision a corporate one rather than that of the consumer. PCC’s headquarters grocery buyer Stephanie Steiner told the Seattle Times, “It’s quite possible they associated the fair-trade message with all the coffee. People don’t have a natural internal conversation about ‘If I buy this coffee, I’m supporting poverty, and if I buy this, I’m supporting the end of poverty.’ “
Despite the best intentions of the purists, 95% of fair trade sales are through companies selling less than 100 percent fair trade. (For a list of 100% fair trade sellers).
The Cost of Fair
Since the fair trade label was introduced to the US, more than 100 million pounds of Fair Trade Certified coffee have been sold, but not all the extra dollars consumers pay for a cup of fair trade brew goes to struggling farmers.
Currently there are 20 worldwide licensing agencies (all under the umbrella of Fairtrade Labelling Organization International) that monitor the trademark and charge accompanying fees for the right to use the logo. In exchange for use of the TransFair USA label, roasters pay at least 5 cents per pound and farmers pay for inspections and renewals, money that many importers claim could be put to better use.
In an effort to better control where their money goes, many large sellers have set up their own systems cutting out the labeling organization. About half of all of Starbucks’ coffee was bought under their program called C.A.F.E. (Coffee and Farmer Equity) Practices that attempts to not just give farmers a fair deal, but also focus on quality and the environment. Starbucks won’t disclose the range of prices they pay their farmers, but in 2005, they reported an average price that was 23% more than that of the conventional market.
The self-proclaimed “largest retailer of natural and organic foods” Whole Foods set up their own certification system and claims to “donate 5% of the sales from select coffees directly back to the farms where they are produced.”
There is evident marketing cache behind a program named High Five for Farmers, but the actual payoff appears more limited: the 5% is of the purchasing – not the retail- price and more restrictive, the program only applies to one type of coffee for just a several month period.
Version 3.0?
There’s no doubt this freshman class of fair trade converts has shaken up the industry simultaneously increasing revenues and visibility and causing old-timers to worry that the larger corporations will use their power to weaken trade agreements under certification schemes.
Industry alum Equal Exchange has posted on their website “The acceptance of large plantations and corporations such as Nestlé into the Fair Trade labeling system calls into question the very underpinnings of the certification system of which we are a part.”
Despite trying to protect their grassroots ideals, fair trade alums realize that ethical coffee still represents only a small portion of the java market – just 2.2% of the beans sold in the US – and that real change means growing the fair trade brand even further.
“Even with our successes, most small-scale farmers around the world remain impoverished and at the mercy of volatile and complex commodity systems. Over the next few decades, Equal Exchange needs to engage and collaborate with like-minded partners and stakeholders throughout the Fair Trade system if we are to continue to transform how business is done. Our vision includes breaking new ground by bringing Fair Trade home—by fostering direct relationships with family farmers here in the United States. Our collective achievements of the past 20 years prove that we can create change beyond our wildest dreams.”