While the Fairtrade Foundation's remit is limited to trading relationships, the businesses licensed to carry its mark have proved adept at linking the ethos of Fairtrade to more generalized consumer concerns. A good example of this is where businesses have turned to their advantage the whole idea of food provenance and traceability. This has helped foster the idea that Fairtrade brands are not only ethical but, through their investment in grower communities, in some way more authentic too.

The big food and drinks groups have yet to reveal their hands. But as Fairtrade businesses set their sights on the wider market, some form of competitive response from the likes of Kraft and Nestlé becomes inevitable. One possibility is that the multinationals will follow the retailers and become converts to the cause; either by launching Fairtrade sub-brands or by switching over existing lines.

An alternative, perhaps more likely, scenario is that the big brand-owners will look for ways of sprucing up their ethical credentials—but without having to pay the turnover-related licensing fees imposed by the Foundation or committing themselves to its formal price support mechanisms.

This alternative course is one that Kraft appears to favor. Last year the company agreed to buy a small, but gradually increasing, share of its coffee beans from farms certified by the Rainforest Alliance, an independent US-based standards body, which promotes environmental protection and better conditions for farm workers. Although the Rainforest Alliance does not involve itself in pricing, Kraft has said that it is paying above market rates for the beans, which it buys through the scheme. However, as the decision to pay a premium is one that Kraft has taken voluntarily, there is no certainty as to what price it will pay in the future.

Such initiatives fail to impress the firms most closely associated with Fairtrade. "Without a guaranteed minimum price, farmers have no assurance for the future, because prices are so volatile. When they drop really low, farmers could receive 20 percent more than the market price and still not cover their costs," points out Cafédirect's Barr.

Then there is the problem of consumers becoming confused by a proliferation of competing marks. Worst of all, there is the possibility that consumers will no longer see Fairtrade as offering more than other brands. "There's a bit of nervousness about companies looking at the growing Fairtrade market and saying consumers want Fairtrade, so we'll offer them something that sounds a bit like Fairtrade," says Bretman.

Creating a £100 million market in little more than a decade is an impressive achievement. But tough decisions lie ahead. One especially fraught issue is whether the Foundation should do more to encourage participation from the big food and drinks groups. To some Fairtraders such a course may smack of sleeping with the enemy. But if the ultimate aim is to spread the benefits of Fairtrade as widely as possible, collaboration is the logical way forward. With the world's biggest brands adopting the language of ethical consumerism, the time may have come to bring big business into the fold.

    

[28-Feb-2005]