Fair-Trade & FNBs

Goals

To find examples of large food and beverage companies that have pivoted towards a fair-trade/fair-pay model abroad due to pressure from consumers or advocacy groups.

Early Findings

Fair-Trade

  • For years, Fairtrade, has been the face of the fair-trade movement. Fairtrade was founded on the conviction that consumers could make the marketplace more moral. Producers must meet a number of standards to qualify for Fairtrade: rules about labor conditions, for instance, or waste disposal. But for companies, the core of their ethical responsibility towards their producers is defined by price.
    • Roughly $9 billion worth of Fairtrade products were sold in 2017, their raw material sourced from 1.66 million farmers. Around 2,400 companies, including multinational giants such as Tesco and Marks & Spencer, pay license fees to their national Fairtrade chapters to use the mark on their products. Fairtrade has become a byword for ethical consumption.

Moving From Third Party Labels To In House Certifications

  • Some major companies have started to abandon fair-trade and set up their own in-house imitations. They are finding it far easier to set up their own certifications. Around the world, the largest agribusiness companies are quitting independent certification, either because they think they can do sustainability better in-house, or because they see an opportunity to craft standards that fit their own purposes.
  • As the concept of ethically-sourced ingredients has become better understood by consumers, brands have started adopting standards that work for their business and image. Crafting in-house standards has also become a way to trim costs for big companies under financial pressure as economic growth slows and consumers opt for healthier snacks or smaller, more artisan brands.
  • Mondelez International (MDLZ.O), owner of chocolate brands Cadbury and Toblerone, Unilever (ULVR.L), behind tea brands such as Lipton and PG Tips, and Barry Callebaut, the world’s biggest producer of chocolate and cocoa products, have all introduced their own schemes.

Companies That Have Fair-Trade/Fair Pay Models

  • Ben & Jerry's
  • Honest Tea
  • Hershey's This decision comes after more than two years of “Raise the Bar, Hershey!” Campaign calling on Hershey to address child labor issues in its supply chain.
  • Results of initial research. Interestingly, when researching fair trade, numerous articles come up criticizing the process or stating it is failing.
  • The initial hour was also spent locating FBRs that were motivated to move to fair trade because of pressures from consumers/activism. Initially, this seemed to be an easy process, but it did not turn out that way. Companies will have to be found that are fair trade, then a media search performed to see what was associated with the move.

Proposed next steps:

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We recommend research to locate 2-3 more FBR companies that moved to fair-trade because of pressures from consumers/activism. Once located, we will provide research that will explain what pressures they were facing, from whom, what type of fair trade they adopted (3rd party, independent, a mix), the timeline if shared, and any other relevant details pertaining to the move.
Additionally, we recommend research that would provide 3-5 examples of what proponents say the problems with Fair Trade are. For each problem, we will explain the problem and who it affects. We will also provide any solutions that are offered.