As the annual Fairtrade Fortnight promotional period continues in the UK, Ben Cooper spoke with Michael Gidney, chief executive of the Fairtrade Foundation, about the new partnership it has struck with Mondelez International and the future for Fairtrade collaboration with major food companies.
Fairtrade is “all about change”. If an ad executive or PR consultant were seeking a phrase to sum up Fairtrade’s raison d’etre that would be a strong contender.
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In fact, Michael Gidney, chief executive of the Fairtrade Foundation, is not in a brainstorming session to come up with a new tagline. Rather, he is seeking to explain why the decision by Mondelez International last November to cease using Fairtrade-certified cocoa for its flagship Cadbury Dairy Milk brand is not the retrograde step some viewed it to be.
The move, which will see the Fairtrade mark disappear from Dairy Milk accompanied by an expansion of Mondelez’s own Cocoa Life programme and a new partnership with Fairtrade, received some adverse media coverage, with some reports speculating whether the future of Fairtrade was in jeopardy.
Gidney concedes the move did receive “mixed headlines” but says the majority of the coverage was “pretty balanced”. He puts the more alarmist headlines and projections down to unease with the Fairtrade approach evolving, something the organisation has encountered before.
“It’s a new way of doing things, and when I think back across the life of Fairtrade, each time we have innovated, each time we have created a new approach, people are cautious. In a way, it goes with the turf,” he says. “One of the things I am clear about is that Fairtrade is all about change. We’re trying to encourage companies to change the way they operate so it’s completely reasonable to expect that we ourselves should look to change where we think change is useful.”
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By GlobalDataGidney recalls how Fairtrade’s decision more than a decade ago to begin collaborating closely with large companies was itself greeted with consternation in some quarters. The fact Fairtrade has continued to grow and develop, retaining credibility as a third party while striving to accommodate the requirements of big business, may lie behind Gidney’s confidence the evolution the deal with Mondelez embodies does not represent a threat. “I think we’re seeing the Fairtrade market maturing. We’re seeing it mainstreaming. One thing that’s important to note is that Fairtrade is still growing,” he says.
As it began its annual Fairtrade Fortnight promotional push in the UK, the Fairtrade Foundation reported estimated retail sales in the country were up by 2% in 2016 to GBP1.65bn (US$2bn). Volume growth was higher in certain categories, with volume sales of Fairtrade-certified bananas rising by 6% and coffee by 8%, though volume sales of Fairtrade cocoa fell by 3%. “There’s lots of momentum in Fairtrade. It would be quite wrong to position this as being in some ways a collapse of confidence or a collapse of efficacy of the model,” Gidney argues.
Gidney also points out the change in Fairtrade’s relationship with Mondelez was envisaged at the outset. “When we first started working with Cadbury in 2009 they already had the Cadbury Cocoa Partnership,” Gidney says. “They said at the time their intention was to be able to do all of this through their own programme eventually.”
Nevertheless, Mondelez’s withdrawal from Fairtrade certification has inevitably led to questions about the role certification specifically may play in the broader sustainable sourcing objectives of major companies. Certification is relatively costly and as companies seek to develop and broaden their sustainable sourcing programmes, they may also begin to see certification as less vital.
Gidney is adamant certification still has an important role to play. “Certification is here to stay. It’s the lion’s share of what we’re about at Fairtrade,” he says. “Minimum standards are really important precisely because if they don’t exist you see a race to the bottom.”
However, he also stresses Fairtrade “has always been about more than certification”, and as part of a five-year strategy to 2020, unveiled last year, the organisation is “dialling up” the programme development side of its operations and developing more partnerships. “We have a big investment on our programme development side. Programmatic thinking is increasing now for us but it’s always been there,” Gidney adds.
The partnership with Mondelez, which allows the company to use the Fairtrade logo on labelling on the back of packaging, is representative of a broader-based approach beyond certification. The Fairtrade logo lends credibility but Gidney stresses what Fairtrade can bring to such partnerships in terms of experience and expertise on the ground.
In particular, Fairtrade will seek to bring its experience and “unique strengths” in taking a “bottom-up” approach, prioritising farmer engagement and empowerment, to bear, Gidney says. “We will be able to factor in that element of farmers’ empowerment which is absolutely critical to the success of any sustainability scheme.”
Gidney argues the new partnership with Mondelez brings an opportunity for Fairtrade to apply its influence at scale. “We see the partnership with Cocoa Life as a real step forward because we’ll be able to reach many, many more farmers. Rather than just working with a portion of the Cadbury brand, this is a chance to engage with the whole of Cadbury’s sourcing so potentially reaching very many more farmers and that’s an incredibly important part of our charitable mission in Fairtrade.”
Inevitably, any impact Mondelez’s own Cocoa Life programme can have on farmers will now be compared with Fairtrade. That is a tough proposition, but Fairtrade’s decision to partner with the company is perhaps in itself a good early portent.
“We’ve got faith in what we’ve seen,” Gidney insists. “Over the last few years, we’ve worked quite closely with their Cocoa Life team. We’ve seen their technical competence and their investment substantially increase. It’s a very, very large programme, about US$400m, and just on one supply chain. I’m very excited about the partnership, about what we can achieve working together.”
While Mondelez will benefit from the endorsement of a respected third party, Gidney emphasises the quid pro quo the multinational is making by subjecting itself to that independent scrutiny. “Actually, we’re holding them accountable. We’re the best known ethical scheme in the world and the most trusted – us being publicly associated with them is both an opportunity and also a little bit of a challenge to Mondelez. They are going to be held accountable in a way they’ve been held accountable before.”
In that sense, this new partnership – and any that may follow – could be said still to embody the idea of independent verification that underpins Fairtrade certification. “This sense of companies not marking their own homework is here to stay,” Gidney says.
Fairtrade will be publishing its own annual report on the progress of the partnership, which Gidney hopes will “be the farmers speaking”. He adds: “We take our public trust very seriously. We won’t compromise on that, so if this doesn’t work we will withdraw.”
As to whether the Mondelez partnership represents a model Fairtrade can replicate with other food companies and other supply chains, Gidney stresses the regionally concentrated nature of cocoa supply chains makes it something of special case. “If you tried to translate that through to a more complex set of supply chains or a more diffuse supply base it would be a lot harder to do. There are certain areas where Fairtrade is better connected than Mondelez so through our partnership we are able to add value to that work, and if it was in a different sector that would be harder to achieve.”
The viability of further partnerships will also depend on the quality of the company schemes, which Gidney says is variable, particularly in regard to farmer empowerment and tackling farmer poverty. He says many sustainable sourcing initiatives have tended to be “top down”, understandably perhaps prioritising security of supply. “There is a lot corporate energy invested in environmental sustainability, in climate change mitigation and adaptation, which is right and proper. There is not yet an equal energy in looking at poverty and social development in supply chains which is a massive risk now.”
Above all, Gidney once more stresses the importance of taking a bottom-up, farmer-led approach, precisely the attributes he believes partnership with Fairtrade brings to Cocoa Life. If this is a component lacking from many company approaches, that in itself speaks to the important role Fairtrade could play in helping shape and optimise company sustainable sourcing programmes over the coming years.
