Fairtrade foods are making inroads into the mainstream, thanks to support from the major supermarkets and changing consumer concerns. Even so, high prices mean their market share remains tiny. Years of campaigning have raised awareness of the issues, but for most consumers the deciding issues continue to be price and personal benefit.
UK supermarket the Co-op last week said it will switch all its own brand chocolate to Fairtrade, the scheme that guarantees farmers in developing nations a fair deal. The Co-op says sales in a wide range of ethical products are growing at an impressive 19% per year.
Yet it also admits that while 30% of consumers say they shop ethically, few ethical products take more than a 3% market share. The reality for the Fairtrade movement is that while consumers like the idea of helping poor farmers and protecting the environment, most like the idea of cheap prices even more.
The Fairtrade Label Organisation’s stringent rules ensure that food producers buy raw commodities at prices that give growers a secure future. On the down side, however, these are as much as 80% higher than those routinely paid by multinationals such as Nestlé or Cadbury-Schweppes.
Even so, consumers are prepared to pay higher prices if they see a benefit. Fairtrade products now account for 12% of the US roast and ground coffee market, free range eggs account for around 35% of the UK market, organic baby foods are popular, and organic fruit and vegetables are moving further into the mainstream in both the UK and US.
The selling points of these products are their benefits to the consumer, however, not to the farmer or the environment. Organic food and free-range eggs are regarded as healthier, and Fairtrade coffee demands a premium for its perceived quality.
Ethical goods, exemplified by those bearing the coveted Fairtrade label, have recently enjoyed a boom in popularity. Yet they continue to represent a tiny fraction of the overall market. The choice for both producers and retailers is stark but clear: show consumers a tangible benefit, or find a way to make prices competitive.
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