In March 2013, the UK Fairtrade Foundation launched a 3-year strategy to increase sales of Fairtrade-certified goods in the UK to a value of “beyond £2 billion by 2015”. This follows a 19% expansion in 2012, when estimated retail sales reached £1.57 billion, compared to £1.32 billion in 2011. In 2012, retail sales of Fairtrade-certified cocoa grew by 21%, sugar by 35% and bananas by 15%.
For cocoa and sugar, the expansion was largely driven by major chocolate products changing to fair-trade sourcing of raw materials. Sugar sales were also boosted by the decisions of big supermarkets to convert “all their own-label range to Tate & Lyle Fairtrade sugar” and by “Ben and Jerry’s completing the conversion of their full range to Fairtrade”. Product development by Fairtrade companies like Divine Chocolate, Cafédirect, Traidcraft and Equal Exchange supported the expansion of sales. Retailers’ switch to fair-trade sourcing, already apparent in 2012, has continued into 2013.
The CEO of the Fairtrade Foundation maintained that “Fairtrade sales continue to confound expectation in the midst of the current tough economic climate.” In the UK, Fairtrade sales now account for “10% of all tea sold…, just over 27% of all roast and ground retail coffee… and 12% of chocolate confectionery”. In addition, the Foundation reports that over 70% of sales of hot chocolate products are Fairtrade-certified.
However, there are shadows hanging over this positive outlook. In March 2013, the UK supermarket chain Asda announced that it would be selling bananas from the Canary Islands in its stores, as part of its efforts to reduce its carbon footprint. The retailer announced that the reduction in shipping days of more than 80% would bring environmental benefits that it hoped would be attractive to the chain’s customers.
As more Fairtrade-certified raw materials are used in value-added consumer products, it is to be expected that the retail sales value of fair-trade products will increase. However, this raises the question of the distribution of the financial benefits of expanding fair-trade sales along the supply chain.
This has a critical bearing on the net benefits obtained by Fairtrade-certified producers from the expansion in the value of retail sales reported in the UK. This is particularly important in an era of rising input costs as it is possible for the net benefits obtained by primary producers of Fairtrade products to decrease, while at the same time the overall value of retail sales of value-added fairtrade products increases.
In part this may account for why in 2012 Fairtrade prices for a number of products were renegotiated and increased. It may also account for the growing attention being paid to improving farming efficiency, boosting yields and strengthening the negotiating power of primary producers (see Agritrade article ‘ Continued expansion in fair-trade sales despite economic downturn’, 28 April 2013).
Progress in these areas can be seen as important in order to maintain the integrity of the Fairtrade label in the eyes of consumers, who generally assume that by purchasing Fairtrade-labelled products they are placing a higher proportion of the final sale price in the hands of primary producers and their social organisations.
Reinforcing the belief of consumers in the integrity of Fairtrade-labelled products is particularly important, given that some retailers are now beginning to place greater emphasis on other product characteristics (e.g. lowering the carbon footprint of the traded product) rather than production system characteristics that underpin the Fairtrade label.