Fairtrade Sector Update

What is Fairtrade?

 

Fairtrade is a trading partnership which seeks greater equality in international trade by offering improved trading conditions to farmers and workers in the developing world.

 

How is Fairtrade doing?

 

In 2018 Kantar WorldPanel estimated the annual retail size of the UK Fairtrade market at £809m, up 8.1% year on year. An extra 214,0000 shoppers have bought into the category, while existing customers bought more frequently and in higher volumes.

A survey by the Fairtrade Foundation in November 2017 found that 90% of consumers knew of the mark (up from 84% in Q1 last year) and 75% said they cared about Fairtrade (up 21% from last hear)

Confectionery has 31% of the UK Fairtrade market by value (£251m, +13.4% year-on-year ), followed by fruit/vegetables/salads (£196m, +5%) and hot beverages (£172m, -3%%). Alcohol now accounts for £87m (+1%) and ice cream £44m (up an impressive 68%). Sweet home cooking is £36m (-1.4%), Chilled drinks (£14m, +31%) and Biscuits £10m (-53%).

What are the regulations covering the supply of Fairtrade products?

 

Unlike organic production, there is no statutory government or EU legislation concerning the production of Fairtrade food and drink. Instead, Fairtrade International acts as an umbrella organisation for Fairtrade-labelled products. Fairtrade International is responsible for:

 

  • Setting international Fairtrade producer standards.
  • Agreeing terms of trade for Fairtrade products.
  • Monitoring the trade in primary and part-processed products to ensure compliance.
  • Owning the registered international Fairtrade symbol.

 

What is the Fairtrade Foundation?

 

In the UK, Fairtrade International is represented by the Fairtrade Foundation (FTF) which:

  • Licenses the Fairtrade logo for use on specific products.
  • Monitors the supply chain of Fairtrade-certified products.
  • Helps companies develop new Fairtrade products.
  • Raises consumer awareness about Fairtrade.

What are the stages to becoming a Fairtrade supplier?

 

  • The process of becoming a UK Fairtrade licensee is controlled by the FTF. New applicants must fill out an application form and sign a licence agreement prior to marketing Fairtrade products.
  • The licensee is responsible for ensuring that every product they market complies with Fairtrade standards.
  • The licensee is generally the last supplier in the supply chain – in the case of proprietary brands this will usually be the brand owner, while for private-label products the licence may be held by the brand owner or their immediate supplier.
  • Once a licensee has started supplying Fairtrade-labelled products they provide quarterly reports to the FTF to verify the supply chain and trading terms for labelled products.These reports are audited annually by a physical inspection.
  • Licensees pay a fee for the use of the Fairtrade symbol based on the net wholesale value of their sales in the preceding quarter. This fee is currently 2% for all products.

 

What is the range of Fairtrade food and drink currently available?

 

  • Fairtrade International has currently developed Fairtrade standards for the following types of food and drink: coffee, tea, herbal tea, rooibos tea, green tea, chocolate, confectionery, cocoa, sugar, bananas, apples, pears, grapes, plums, lemons, oranges, mandarins, satsumas, clementines, lychees, avocados, pineapples, mangoes, grapefruit, fruit juices, smoothies, quinoa, peppers, green beans, coconuts, dried fruit, biscuits, cakes and snacks, honey, muesli, cereal bars, jams and preserves, seeds, chutney and sauces, herbs and spices, nuts and nut oil, soya, olive oil, wine, beer, rum, rice, yoghurt, ice cream and baby food.

What are the guidelines for Fairtrade products?

 

  • For all Fairtrade-labelled composite (multi-ingredient) products, every ingredient that is covered by Fairtrade standards must be sourced under Fairtrade conditions in a supply chain originating from certified producers and traded only through registered traders.
  • If the product contains more than 50% Fairtrade-certified content then it is automatically eligible for Fairtrade labelling.
  • If the product contains less than 20% Fairtrade-certified content then it is not eligible for Fairtrade labelling.
  • A product may qualify for the Fairtrade logo if it contains a single Fairtrade-certified ingredient and this ingredient represents more than 20% of the product’s dry weight.
  • All composite products carrying the Fairtrade logo must indicate the percentage of Fairtrade ingredients on the product label.
  • In 2015 Fairtrade International launched the Fairtrade Sourcing Programme (FSP) for companies that cannot achieve full Fairtrade certification but wish to use a single Fairtrade-certified ingredient or material in their products. This currently applies only to sugar, cocoa and cotton.

 

What is the cross-over between Fairtrade and organic?

 

Some products on sale in the UK carry both organic and Fairtrade logos, indicating dual certification. The two systems are complementary but there are some key differences.

Organic standards seek to produce high-quality food with minimum environmental impact, but they do not guarantee prices to producers or stipulate any particular social forms of production. Fairtrade standards have a social goal, stipulating minimum prices paid to producers and ensuring that producers in developing countries can gain more control over their lives. While environmental standards are important in Fairtrade, producers that are unable to meet organic standards are not excluded.