The Consumer Conundrum- Conflict or Co-operate?

Simon Wright, O&F Consulting

FDIN Fairtrade Seminar

February 20th 2008

Today’s Presentation

1. Introduction to O&F Consulting

2. The Strength of The Fairtrade Message

3. Rainforest Alliance

4. Organic Ethical Trade

5. Meeting Consumer Aspirations - Conflict or Co-operate ?

1. Simon Wright - O&F Consulting

Working with Organic and Fairtrade Food since 1986. Examples of clients include;

• Sainsbury’s Supermarkets (multiple retailer)• Planet Organic Ltd (independent retailer)• Green & Black’s (organic and Fairtrade

chocolate)• Divine (Fairtrade chocolate)• Liberation (Fairtrade savoury snacks) • The Organic Spirits Company (gin, vodka,

rum)Information / contact www.organicandfair.com

ADVERTISEMENT !The Handbook of Organic and Fair Trade Marketing

• Published February 19th 2007 by Blackwells• First ever book on this subject• Edited by Simon Wright and Diane McCrea• More information at www.blackwellfood.com• Written by industry experts - covers UK,

Germany, Italy and the USA• Case histories on the success of key brands

such as Green & Black’s, Yeo Valley, Clipper, Duchy Originals, Abel & Cole

2. The Strength of the Fairtrade Message

2. The Strength of the Fairtrade Message• Fairtrade Symbol has highest recognition of

any ‘ethical’ symbol• 54% of consumers said they had seen mark

‘a lot’ compared to 18% for Red Tractor and 13% for Soil Association

• Majority aware of FT coffee, tea, chocolate, bananas and cocoa only

• 96% had heard of the mark, 70% had bought a product at some time, 27% of people bought more than one product regularly

Source: OC&C Strategy Consultants / Fairtrade Foundation survey of 503 consumers, January 2008

2. The Strength of the Fairtrade Message

Reasons for Success of FT Symbol• Simple, Single Message - Always The Same• Good design discipline - logo is always the same

place on pack and same colours• Fairtrade Foundation Consumer Marketing

is relentless and effective and supports FT symbol• Annual Fairtrade Fortnight uses celebrities to

hammer message home effectively

NB Organic does not do this stuff nearly as well!

Tuesday, April 18, 2023© Copyright 2007. Rainforest Alliance

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3. The Rainforest Alliance

Tuesday, April 18, 2023© Copyright 2007. Rainforest Alliance

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“What is the Rainforest Alliance?The Rainforest Alliance is an international, nonprofit environmental and sustainable development organisation. Our mission is to protect ecosystems and the people and wildlife that depend on them by transforming …”

Consumer behaviour

Business practices

Land use practices

Tuesday, April 18, 2023© Copyright 2007. Rainforest Alliance

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Reaching Consumers

Caribou Coffee Company coffee package artwork

Innocent Drinks banana smoothie

Banana seal

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3. Rainforest Alliance Commercial Activities in the UK currently include

•Innocent strawberry and banana smoothies (the current TV and

press ad campaign also promotes the link with Rainforest Alliance).

•McDonalds - all their coffee is Certified.

•Pret a Manger - sell triple Certified coffee ie Rainforest Alliance

Certified, Fair Trade and Organic.

•Sainsbury in store cafes also serve triple certified coffee.

•Kenco Sustainable Development coffee is Certified.

•Liptons - have made a commitment to have all their tea sold across

Europe Certified by 2010

•PG tips are aiming to have all their tea certified by 2010

•Good Natured fruit juice made from Certified fruit is also launching

4. Organic Ethical Trade

Why ?

• Originally a joint Pilot Project between Soil Association and Fairtrade Foundation

• Launched in January 2003 as an attempt to get a better deal for organic farmers from the North (since FT only applies to the South)

• Provides a single inspection to cover both Organic and fair trade issues (cheaper for producers)

• Follows in footsteps of other combined joint organic + fair trade schemes such as Bio-Equitable (Ecocert, France), Bio & Fair (Naturland / Gepa, Germany) and IMO (Switzerland)

4. Organic Ethical Trade

How?• I took over Chairing the Standards

Development process in March 2003• Became Soil Association Ethical Trade

Pilot in January 2004 • Ran with three licensees until July 2007

when decided to begin process of adding Ethical Trade Standards to main SA Standards over a very extended period (TBC)

Blue Skies Pineapple

Blue Skies Coconut

4. Organic Ethical Trade

Current Status

Aim of Standards is to ensure• Fair and ethical trading relationships• Socially responsible practices• Fair and ethical employment: 1.through the whole organic food chain2.from producer to retailer, and3. in both developing and developed countries

4. Organic Ethical Trade

Air Freight Standards 2007

• In parallell to ET Pilot, Soil Association were working on what they should do about airfreight of organic products into the UK

• After extensive consultation proposal made in October 2007 that countries should only be allowed to export organic products into the UK by air if the products met either the Ethical Trade Standards or the Fairtrade Foundation’s Standards

• Had the effect of putting ET Standards in the spotlight and accelerating development

• Decision welcomed by the Fairtrade Foundation• Architect of this work is Ken Hayes, here today

5. Meeting Consumer Aspirations - Conflict or Co-operate?

Summary of how Fairtrade, Rainforest Alliance and Soil Association Organic Ethical Trade differ

Rainforest AllianceFocuses on sustainable agriculture in the South - no

minimum price set for producers

Soil Association Ethical TradeRequires everyone in the supply chain to agree that

they have received a fair price - can apply to producers in North and South

FairtradeSets minimum price for producers in the South as part

of a range of other measures

5. Meeting Consumer Aspirations - Conflict or Co-operate?

What we said last time!

November 2005 Dorothy Mackenzie of Dragon speaking at FDIN Fairtrade Seminar summarising qualitative research:

• Organic and Fairtrade are not directly associated, but the issues are strongly compared

• No confusion between the issues, but packagining showing both logos did cause some confusion

• Organic purchasers likely to be interested in Fairtrade• Strong interest in seeing more Fairtrade products utilising

foods that children eat• Super-premium and highly processed foods such as ready

meals were seen as a poor fit with Fairtrade(the latter appears true for organics from marketplace observation)

5. Meeting Consumer Aspirations - Conflict or Co-operate?

What we said last time!

May 2006 Dragon speaking at FDIN Organic Seminar summarising qualitative research:

• All groups were able to separate out certain other themes from what they saw as ‘organic’ issueseg “organic is not necessarily about Fairtrade. I suspect some organic producers exploit their workers in the fields as much as any big corporation”

• Not a two-way disconnect however:Organic does not imply fairer cultivationBut Fairtrade does lead to assumptions that the product will

be raised in a way that is better for the natural environment

5. Meeting Consumer Aspirations - Conflict or Co-operate?

Conflict

• Fairtrade products can disappoint consumers if they are subsequently found to be at variance with what consumers expect eg use of pesticides in production, acceptance of Genetic Modification, etc

• Organic products can disappoint consumers if it becomes apparent that the producers did not receive a fair reward for their work or were unable to join a trade union

5. Meeting Consumer Aspirations - Conflict or Co-operate?

Co- operate

• Jointly certified products very popular with retailers(especially Sainsbury’s)

• Organic and Fairtrade consumer groups are not identical but there is considerable overlap so you hit two target markets with the same product

• Avoids “lefthand - righthand” confusion at the fixture• Cuts cost of inspection to producers - one third of Fairtrade

producers use premium to pay for organic certification• However joint certification (FLO/Organic) can only apply to

products from “Third World” countries• Other schemes such as Soil Association Ethical Trade can

cover “developed and developing” countries

Today’s Presentation

1. Introduction to O&F Consulting

2. The Strength of The Fairtrade Message

3. Rainforest Alliance

4. Organic Ethical Trade

5. Meeting Consumer Aspirations - Conflict or Co-operate ?

The Consumer Conundrum- Conflict or Co-operate?

Simon Wright, O&F Consulting

Thank You !

February 20th 2008