Fairtrade back in growth as foundation launches new marketing strategy

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The Fairtrade Foundation has launched a new, hard hitting marketing strategy following research showing that 23% of UK consumers “never think about who produces their food and drink”.

The campaign started with a short film, “Don’t feed exploitation”, which focuses on the impact of cheap food deals available on the high street. The video shows how real consumers react when children arrive with the food they had ordered from a (fake) delivery service.

The video marks a shift in approach by the foundation. Faitrade is often a rational purchase decision; something people feel positive about but in a passive way. We want it to be emotionally engaging,” said director of public engagement Cheryl McGechie in an interview with Marketing Week magazine.

Indeed, a new poll of 2,000 British shoppers published this week shows that 23% admit they never consider the farmers and workers who produce products like tea and coffee, whilst 17% have never thought about whether their food has been produced in “exploitative conditions”. Still, 72% said they are aware of the “positive change that buying ethically sourced goods can bring to communities in the developing world”.

The poll results have been published alongside sales figures that suggest the overall retail value of the Fairtrade market last year increased by around 2% to 1.93bn (£1.65bn).

Volume sales – which provide a“better though not comprehensive reflection” of the scheme’s impact that retail sales, according to the foundation’s CEO Michael Gidney – show that bananas (up 6%) and coffee (up 8%) helped Fairtrade bounce back last year. Sales of cocoa and teas both fell 3%, however. Sugar sales also continued to decline due to changes in EU market regulations.

Last year, there were the twin challenges of a plummeting pound and a contraction in the grocery market to deal with, Gidney noted, but “despite all the challenges and turbulence of 2016 … shoppers are still supporting Fairtrade”.

This year promises to be equally difficult, however. The foundation is particularly concerned about the impact Brexit will have on farmers as new international trade deal are negotiated.

Analysis: Reason to be (cautiously) optimistic

In 2014, sales of Fairtrade fell for the first time in the ethical trading scheme’s 20-year history. It was a bit of a shock. The 4% decline reportedly the result of consumers turning to cheaper alternatives. In 2015, there was another contraction, this time by 2%. The foundation pointed to the “sugar crash” – which it had predicted – as sales of the commodity plummeted 36% following the overhaul of EU market regulations.

Announcing those 2015 figures this time last year, Fairtrade Foundation CEO Michael Gidney said he was cautiously optimistic going into 2016. It seems his gut instinct was right.

The increase in sales – albeit by just 2%, and way, way behind the double-digit growth the certification scheme has enjoyed for years – have been delivered amidst a contracting grocery market trend and the falling pound.

This year, the caution has gone and Gidney is “optimistic” as the scheme “continues to find itself in new unexpected areas that we never anticipated”. But many of these – like flowers and gold – are outside the food sector. For Fairtrade food, 2017 is all set to be another challenging year.

There are dozens of international trade deals up for negotiation as Brexit negotiations get underway. Let’s not forget, too, that Fairtrade will start its own divorce that could knock this year’s figures – in May, Mondelēz International will start phasing out the Fairtrade logo on its Cadbury products sold in the UK and Ireland for its own Cocoa Life branding. Fairtrade has come in for quite a bit of stick for the move, which it calls “the next stage” in its evolution. All reasons to perhaps temper that optimism with a pinch or two of caution.

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