Business Case for Fair Trade

Making the Business Case

What is Fair Trade Certified?

Fair Trade Certification (FTC) empowers consumers to choose products that align with their values. The label above signals that coffee, tea, chocolate, rice, sugar, and fruit farmers have received a fair price enabling a better life for farming families, investment into the quality of their products, and stronger environmental stewardship. Introduced to

the U.S. in 1998, FTC products can now be found in over 32,000 retailers consistently exceeding sales expectations due to their superior quality and rapidly growing demand for FTC products.

Fair Trade Market Growth in the US:

• Think the coffee market is flat? Think again. FTC coffee sales have grown an average of 72% per year since 1999. Compare this to 12% for organic and 3% for the coffee market overall.i
• FTC products can now be found in over 32,000 retail locations including: Kroger, Safeway, Albertson’s, Stop & Shop, Wild Oats, Trader Joe’s, Whole Foods, Target, Costco, Sam’s Club, McDonalds and many more!
• 50% of those aware of FTC will purchase it. In 2004, 15% of U.S. consumers were aware of the FTC label—this is where organic awareness was just a few years ago.ii
• Tea, chocolate, rice, sugar, and fresh fruit are now being Fair Trade certified in response to coffee’s rapid success. The strong growth in these categories is closely following the rise of FTC coffee.
• 82 million media impressions last year with articles in The New York Times, Boston Globe, USA Today, The Wall Street Journal, Time Magazine, and more!

Fair Trade Retail Promotions:

• Fair Trade Month in October is a national Fair Trade promotion involving thousands of retailers, manufacturers and Fair Trade supporters.
• In October 2005, retailers entered the Fair Trade Display Challenge for a chance to visit Fair Trade cooperatives in Costa Rica. Some retailers reported FTC product sales increases of over 500%!
• An entire suite of Fair Trade Certified point-of-purchase promotional material is available to retailers free of charge at FairTadeCertified.org. Fair Trade Certified TransFair USA 1611 Telegraph Ave, Suite 900 Oakland, CA 94612 Tel: 510.663.5260 www.FairTradeCertified.org

Fair Trade Success Stories:

• Wild Oats – Converted to 100% FTC coffee in 2002, increased prices by 10%. First year sales growth of 20%, second year 15%, leading to an expansion into all FTC products.
• Green Mountain Coffee Roasters – FTC outpaces overall company sales growth by 3:1 and wholesale customers who offer FTC are growing 20% faster than those who do not.
• Pret a Manger Cafes – Converted to 100% FTC coffee in 2004. First year sales growth 134% leading to expansion into FTC cocoa and tea.

Fair Trade Criteria:

Fair Price: Farmer groups are guaranteed a stable price for their products. Farmers invest the Fair Trade premiums in education, quality improvement, health-care, and business capacity building.

Fair and Safe Working Conditions: Forced labor and child labor are prohibited. Protective clothing and safe equipment are provided for workers. Fair Trade workers and farmers must join associations that are transparent and democratically controlled by their members.

Environmental Protection: The Fair Trade criteria prohibit genetically modified organisms (GMOs) and a long list of dangerous pesticides that are ‘acceptable’ under EPA standards. Farmers must create and implement integrated crop management and environmental conservation plans. Also, the Fair Trade price structure provides a strong financial incentive and the necessary resources for organic conversion. This is why so many FTC products are also certified organic.

Facts about Fair Trade Certified Products:

• Coffee, tea, chocolate, bananas, rice and sugar are now Fair Trade Certified for the US market.
• FTC products benefit over 1.1 million farmers and farm workers in Latin America, Asia and Africa.
• Since 1999, U.S. FTC product sales have generated $67 million in additional income to farmers in 25 countries.
• Grassroots consumer support! Hundreds of colleges and universities, churches, and community groups across the US have active Fair Trade campaigns and promotional programs.
• FTC products have won some of the food industry’s top quality awards including recognition from the Cup of Excellence, Ken Davids’ Coffee Review, Food & Wine Magazine, the American Culinary Institute, the Times of London, and Progressive Grocer Magazine.

Who is Behind the Label?

• TransFair USA is the only independent, third-party certifier of Fair Trade products in the US.
• In the US, TransFair licenses and audits the transactions of over 400 manufacturers. Each quarter, this information is cross-checked with farm level invoices to make sure that the farmers received a fair price. Products that have met the rigorous Fair Trade standards are allowed to display the FTC label. TransFair also works with retailers, manufacturers, and Fair Trade consumer supporters to raise awareness for FTC products.

i Specialty Coffee Association, 2004

ii National Coffee Association, 2005