31 May 2024
Cultivating opportunities for fair and sustainable products close to home
More than ever, Fairtrade producers are taking the lead to deliver Fairtrade products to their own local markets.
CLAC
Five to ten years ago, walking into a market in Mumbai, you might have found a handful of Fairtrade products on the shelves. The same would have been the case in Nairobi, or in Lima.
That’s despite the fact that the countries in which these cities are found are home to hundreds of thousands of Fairtrade farmers and workers.
Demand for Fairtrade products in countries where the products and ingredients are grown has historically been slower to take off compared to countries in Europe and elsewhere that started out importing Fairtrade products more than 30 years ago.
The situation today is very different. Fairtrade farmers are expanding their business models and tapping into consumer interest in their own countries and regions much more effectively. Along with the growth of a middle class in many formerly lower-income countries – and in some cases, the opportunities afforded by remote work for members of the diaspora to spend more time in their countries of origin – a new sustainability-minded generation is looking for responsibly produced goods as part of their everyday shopping.
Here are some of the ways Fairtrade producers have taken the lead to deliver Fairtrade products to their own local markets.
From farming to building brands
Fairtrade cooperatives today bring benefits to their members beyond farming-focused activities like training on good agricultural practices, or building infrastructure such as warehouses.
Many cooperatives have invested in equipment and developed the expertise to process their members’ crops themselves, or even package and brand their own market-ready products. Known as “value addition” in the supply chain, such steps bring in more income for the cooperative – and therefore more benefit for farmers – than simply selling their crops in raw form.
One example is COAGRICSAL, a coffee cooperative in Honduras that used some of its Fairtrade Premium funds to diversify into cocoa as well. From there, they built their own factory – run by women from the community – and market chocolate under the brand name Xol.
The Fairtrade producer network in Latin America and the Caribbean CLAC, Fairtrade, and the Interamerican Foundation created the Added Value Fund project through which they have supported 85 organisations with investments to improve the packaging on finished products, to improve the quality of existing products or to buy equipment to improve their production processes. The fund has helped cooperatives like Fairtrade certified PROEXO in Honduras to create a new line of coffee produced by women, Café Brisas.
In a region home to two-thirds of all Fairtrade farmers and workers, producer network Fairtrade Africa supports a number of producer organisations in its region to add value to their products. For instance, Fairtrade Africa has trained cooperatives in Kenya, Ghana, Côte d’Ivoire and Eswatini on coffee roasting, tea blending, chocolate making, value addition of shea butter, chilies, and honey. The training also included the topics of business management, financial modelling, market planning and business performance management. As of early 2024, there are five tea brands, three chocolate brands, and three coffee brands selling in markets including Kenya, Côte d’Ivoire and Egypt, with more to come.
In the Asia Pacific region, the regional Fairtrade Network of Asia Pacific Producers (NAPP) supports coffee producers to diversify into their own local markets, in addition to exporting. For example, in late 2023, 15 Fairtrade certified coffee cooperatives in Laos and Indonesia participated in a rigorous two-day training program with the Fairtrade NAPP Coffee Business School. The training focused on fundamental coffee trading principles and covered topics including sales strategy, understanding commodity futures, contract structures, risk management, and digital marketing strategies to boost sales.
Getting products on shelves: Building relationships nationally and regionally
Raising awareness about Fairtrade proves more challenging in developing markets than in established ones, where familiarity with sustainability labels has expanded over time.
That’s why over the past five years, marketing organisation Fairtrade India has worked to significantly boost awareness among Indian consumers about Fairtrade and sustainable consumption, and encourage more local brands to offer Fairtrade certified products. Supported by funding from the European Union, these efforts began in 2018 with efforts related to food and fashion products, and have continued under the name “Switch Asia” with a focus on the textile sector.
Brands’ adoption of Fairtrade certified ingredients has been promising, despite challenges such as the pandemic and hyperinflation. One example is the ACCOR Group of hotels in India, which opted to source sustainable, Fairtrade certified bath amenities from a local manufacturer, emphasizing local ingredients and innovative packaging to minimize plastic waste. Additional achievements include Totle, a children's clothing brand, and Salman Khan's Being Human brand, which introduced an entire Fairtrade sustainable fashion line featuring T-shirts, shirts, and trousers. In 2023, Fairtrade India also facilitated a sustainable, Fairtrade certified supply chain for L'Oréal, leading to the launch of sustainable Fairtrade towels for corporate merchandising across India—a pioneering initiative for the company in Asia.
Thanks to another partnership in Sri Lanka with the Italian Ministry of Foreign Affairs, a group of spice, coconut and fruit producer organisations worked with Fairtrade NAPP to develop business relationships with major supermarkets and companies interested in integrating Fairtrade ingredients into their products. Four Sri Lankan companies now sell Fairtrade-labelled products, including the brands Bee Natural, MAP, and World of Organic. In addition, the Spar supermarket chain and tourist outlets in southern Sri Lanka now stock these products. Sri Lankan citizens saw information about these locally sourced Fairtrade products through a marketing campaign including digital ads, social media, local broadcasts, and outdoor materials such as signs and billboards.
Fairtrade Africa has developed several innovative business models to match cooperatives with commercial partners, including fostering sourcing relationships between cooperatives and local retailers such as Greenspoon, Montys and Healthy U in Kenya, and Faithful to Nature and Pick N Pay in South Africa for their own-brand Fairtrade labelled products.
Fairtrade Africa also coaches producer organisations to develop local market opportunities, through workshops on business strategy optimisation and use of digital media. After training in 2023, a first batch of tea producer organisations Kenya are in the process of developing e-commerce functionality on their websites and fulfilment capabilities so they can receive, process and dispatch orders of their finished products.
E-commerce also represents an increasing share of the sales landscape in Latin America and the Caribbean, supported by CLAC. In Argentina and Mexico, a number of Fairtrade producer organisations are using regional online platforms to sell their products within their own countries, eventually beyond as well.
Trade shows are another avenue for promotion. In Asia Pacific, Fairtrade NAPP has introduced Fairtrade products and producers to national and regional industry stakeholders through trade show events in Singapore, Dubai, India, China, Malaysia and Thailand, to name a few. Meanwhile, Fairtrade Africa joins forces with chambers of commerce as a way to reach companies interested in both local and sustainable products and ingredients.
Advocating for sustainable policies
In addition to being active in advocacy initiatives to influence regulations of countries that import Fairtrade products, Fairtrade producers are building support for policies that promote sustainable production and consumption in their own countries too.
All three Fairtrade producer networks have robust advocacy strategies, aiming to build connections with policy-makers in their regions and gain support for policies that promote sustainable agriculture and benefit Fairtrade farmers and workers. In Latin America for example, the national Fairtrade coalition in Guatemala has built relations with the Ministry of Economy, while in Costa Rica, Fairtrade organisations are working on a fair trade law proposal.
Regional policy can also be a game-changer when it comes to removing barriers to selling products across borders. The African Continental Free Trade Area, or AfCFTA, which officially came into effect in 2021, is expected to lift millions of people out of poverty by making trade amongst African countries easier. The addition in 2022 of a pan-African system that allows payments to be made in any local African currency should further simplify cross-border sales, and save African businesses billions each year in exchange and transaction fees. Fairtrade Africa is educating certified producer organisations about what the free trade area means for them, and helping them prepare to take advantage of new opportunities on the continent.
Consumer awareness and demand
Making Fairtrade a part of people’s everyday sustainability choices requires both the availability of products on shelves, and shoppers’ awareness of Fairtrade’s benefits. And it’s a virtuous cycle, as stores increase their stock of sustainable products when their customers demand it.
In recent years, people in emerging economy countries have become more attuned to sustainability issues – in fact, often more aware or more concerned than counterparts in higher-income countries. A Bain & Company 2023 survey of more than 23,000 consumers in 11 countries found that a higher proportion of respondents in fast-growing markets such as Indonesia, Brazil and India reported high levels of concern about environmental sustainability (78 to 85 percent) as compared to respondents from European and North American countries (53 to 72 percent).
That said, given the lag in sustainable product offerings, citizens’ awareness of sustainable or ethical products is often lower in emerging markets.
In Kenya, a Fairtade Africa consumer research study in 2021 found that 42 percent of respondents said they were aware of sustainable or ethical products. Of those that were aware of such products, 30 percent said they had ever purchased them. By contrast, in a study of 12 mostly European and North American markets conducted by GlobeScan for Fairtrade in early 2023, more than 80 percent of respondents could recall an ethical label, up from 75 percent in 2019. Of those who specifically recognised the Fairtrade label, 87 percent said they purchased a Fairtrade product at least once every six months.
In India, the campaigns mentioned above have contributed to a significant shift in consumer behaviour and awareness. The 2023 GlobeScan survey revealed an impressive 17 percentage point increase in recall of any ethical labels between 2021 and 2023, jumping from 71 percent to 88 percent. During the same timeframe, claimed purchase of any Fairtrade product in the past six months increased from 20 to 27 percent. This trend is supported by Fairtrade India’s mobilisation of young people through a network of Fairtrade schools and universities across the country, and campaigns such as Fashion Revolution.
In recent years, CLAC is also developing the market in Brazil, with different campaigns to promote the consumption of Fairtrade products locally.
The future of sustainable consumption
From developing their own brands, to building skills in business development and marketing, to cultivating the next generation of sustainable shoppers, Fairtrade farmers and producer organisations are creating value and increasing their revenue streams.
While Fairtrade producers are taking steps to meet the evolving sustainability requirements of international buyers and governments, they are also able to set a high bar at home as they offer their products and expertise locally as well.
The potential for growth in sustainable production and consumption in emerging economies in Latin America, Asia and Africa is promising – and Fairtrade producers are leading the way.