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Is fair trade a fad?

New Zealand has the fastest-growing fair trade market in the world, but as corporates like Starbucks catch the Fair Trade bandwagon, savvy advocates of ethical consumerism can see a day when the goodwill is gone. By Jehan Casinader
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Photomontage by Adrian Clapperton

New Zealand has the fastest-growing fair trade market in the world, but as corporates like Starbucks catch the Fair Trade bandwagon, savvy advocates of ethical consumerism can see a day when the goodwill is gone. By Jehan Casinader

The term ‘consumer with a conscience’ is bandied about pretty liberally these days. ‘Sweatshop’ is a very dirty word. ‘Make Poverty History’ wristbands are flung about by celebrities whose mugs end up on, well, mugs, to encourage us to remember those who suffer—animals, children or labourers in some frenzied foreign workshop—because of our consumption habits. New Zealand prides itself on a free and fair market, but those two ideals often come into conflict.

The number-crunchers declare that our fair trade consumption tripled in 2006 alone, giving this country the world’s fastest-growing ethical market. But do we really deserve this badge? As the fair trade battle plays out in the marketing room, not the boardroom, there is a looming prospect that when its trendiness ends the fair trade market will be jeopardised. The question is whether Kiwis are embracing fair trade out of consumerism or concern.

In short, no one knows—which is disturbing, given the global reliance of billions of sales dollars and thousands of jobs on fair trade, from coffee bean harvesters in Brazil to full-time lobbyists who pound the pavement. Most of us acknowledge that fair trade’s ‘brand’ is sustained by consumer vogue. The question is, to what extent? Fair trade organisations certainly have no answers, and local research on why consumers choose fairly-traded goods is surprisingly absent.

New Zealand’s market for fair trade goods was worth $5 million last year. Three years earlier, it was less than $50,000. The figures appear staggering but they’re a bit misleading: New Zealand is one of the last nations to cotton on to fair trade and domestic producers have not yet felt the pinch of fair trade growth. Our exporters, however, are already faced with their trading partners’ differing levels of fair trade savvy. For now, Oxfam says, fair trade is creating new sales here, not just cannibalising existing markets.

The jostle for the thinking shopper’s dollar is an alternative to price competition. That could have implications for consumption and hit shoppers’ wallets in major fair trade areas like foodstuffs and apparel. Sellers of those products are now forced to compete on an ethical level. Although most Kiwi businesses remain unaffected by the boom, their foreign counterparts have not avoided it. Our industries have three options for dealing with fair trade: embrace it, ignore it, or find a marketing alternative to it. The trick, it seems, is to integrate fair trade into marketing strategies without becoming over-reliant on it to sell product. Marketing agencies like Lighthouse Ventures are also helping companies find that balance.

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New Zealand’s statistics are promising, but also deceptive. They only account for products that carry the Fairtrade Mark, which arrived here just three years ago to allow mainstream companies to access fair trade goods. Trade Aid had on-sold ethical goods for years before. While the growth is clearly not as steep as it seems, it is accelerating.

Minx Footwear moved its manufacturing offshore because of the costs of compliance and raw materials, and a lack of infrastructure. After a failed attempt in Fiji, Minx chose a fair trade setup in China, where it has operated for a year. Co-director Cushla Reed says she wants to pay for what she gets.

In some areas, fair trade is more about public relations that a change in the way we think … the publicity is only there because of consumer interest

“I hopped on a plane and went to China to see the factories,” she says. “Of course we were tempted to go for a cheaper factory. But we’ve done our research and we’re not taking advantage of our staff there. There is no middle man clipping the ticket along the way.”

Reed says that although fair trade can have financial benefits, if businesses put too much of the cost onto the consumer they may price themselves out of the market. She adds that the conditions of New Zealand’s own factories are often worse than those in Asian factories—a situation that is not only ill-recognised by Kiwis, but also by foreign exporters who only know us as a Pacific haven.

“Not many people ask if we are fair trade,” says Reed. “We don’t publicise it, but we should. We are fair trade because we believe in it, not for marketing. There’s a lack of understanding of fair trade implications in many industries. Kiwi businesses need to research the companies they work with offshore, if ethics are important to them.”

Society’s interest in environmental issues has historically preceded its interest in human rights issues. Now, when we do buy ethical goods, we feel we have outsmarted the market and made a choice that exempts us from it—a consumer decision that marketers have caught on to. Even so, those who benefit don’t care whether we bought it with genuine intentions; at least we did.

“In some areas, [fair trade] is more about public relations than a change in the way we think,” says Trade Aid’s general manager, Geoff White. “That does concern me [but] I hope that for those who do try fair trade products, the buy-in will last long after the marketing ends. The publicity is only there because of consumer interest, particularly from committed young people.”

Indeed, although the fair trade message is hardly new, it may finally be sinking in at the hands of younger celebrities targeting a younger generation. Some, however, are worried that we are becoming socially mindful not out of concern, but simply because drinking organic coffee, eating free-range eggs and wearing ethically-produced garb have quickly become a trend du jour.

“It’s just another form of consumerism,” says Simon Morton, host of television’s Why We Buy. “It’s heavily media-driven, and a symptom of our affluence. We want more than a good price, a good colour and a good lifespan. People want to be more political with the way they spend their money. Now there are more complex issues: green issues, ethical issues, sustainability issues.

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“The marketing of fair trade goods is about giving people choices by building guilt around consumption. Things like this, which are trendy today, become fairly mainstream in a few years.”

Fair trade marketers are attempting to make a case for us to support fair trade goods in the long term, not just on a product-by-product basis, and their efforts are slick. For those who often buy fair trade, they market the products as ‘sick babies’, emphasising problems that the enlightened shopper will help solve. For those who aren’t familiar with ethical consumption, they promote goods as ‘well babies’, emphasising the positive effects their purchase can create.

The jury’s still out on whether this is going to work. The danger is not the consumer. The danger is that the multinational players will take over

There are two ways the fair trade world could deal with the marketing of fair trade. One option is to restrict the fair trade tag to companies that are dedicated to it. The other is to embrace traditional enemies—companies like Nestlé and Starbucks that have been the target of fair trade action for decades. To allow those companies to buy into the pure fair trade brand by introducing some ethical products to their range is a risky move—a move the industry took.

“The jury’s still out on whether this is going to work,” says White. “The danger is not the consumer. The danger is that the multinational players will take over the entire supply chain, which would totally defeat the purpose in the first place. The threat is not that the marketing people will pull out, but that they will stay in and corrupt the message. If multinationals pulled back, however, then fair trade companies would fill the gap; there are enough big ones to do it.”

Fair trade bodies believe our newfound attention to their products is because we now have access to the information that doesn’t usually make it into the papers. Even so, that information usually has to be sought out rather than being regularly and readily available. Shops still appear to be attempting to prevent consumers being informed.

When I asked three dozen retail stores in one Westfield mall about the origins of their products, none admitted to selling products that were not produced under fair trade conditions—somewhat unlikely, given that many of the stores sold heavily-branded apparel. One shop assistant asked, “What does fair trade mean?” Other stores said it was odd for a consumer to seek such information. Three stores referred us to their head offices, but the vast majority simply offered an indifferent “Wouldn’t have a clue”.

“There aren’t many High Street stores in the United Kingdom that don’t have a code of conduct for sourcing their products,” says Linda Broom of Oxfam. “Some years ago, companies like Nestlé didn’t have to worry about fair trade. Now it doesn’t look good if they don’t care. As people ask more questions, companies will have to provide a lot more answers. They’re forced to come clean under public pressure; we’re going to see that in the next few years here.”

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Broom believes fair trade won’t become fully mainstream until shoppers are offered a hundred choices of fair trade products, as supermarkets like Tesco and Sainsbury’s do in the United Kingdom. As many of us have experienced with free-range eggs, once the marketing message is ingrained in our psyche, the choice becomes second nature.

“Look at the shelf inches in supermarkets dedicated to fair trade products,” observes Simon Morton. “It’s coffee and chocolate today if you want to be an ethical consumer, although the rise of farmers markets is also a form of ethical consumption. Fair trade organisations want to pierce the armour of established manufacturers, and that’s not just going to happen overnight. They must deliver feasible consumer choices; at the moment those choices are just not there.”

Some years ago, companies like Nestlé didn’t have to worry about fair trade. Now it doesn’t look good if they don’t care

Researchers suggest that the key to sustaining fair trade growth is making it easy for the consumer. Studies have consistently suggested that we give greater weighting to convenience and customer service when we shop than to brand, label, function or even the product itself.

In Europe, the fair trade issue is now entrenched in the public awareness. But even after a rise in popularity, and indeed criticism, Europe has not seen a drop-off in demand for fair trade goods—a promising sign for Kiwi fair trade bodies.

Even though most fair trade research is in consumer awareness, not buying motivations, fair trade organisations are comfortable because global trends are promising. They may be right or, as some fear, the trend will end. But for now at least, this country is in a safe zone.

The feel-good factor of ethical purchases fuels further spending. Soon, however, we may move on to a new source of validation, particularly when the credibility of fair trade branding is affected by the arrival of megacorps like Starbucks. To ensure fair trade is sustainable, it’s important to know how many fair trade purchases are heartfelt and how many are merely fashionable. But at the end of the day, in an age of consumer sovereignty, at least a conscience is one thing that money can’t buy.