Fair Trade is dead. Long live Fair Trade

Leading chocolate company Cadbury made a pretty amazing announcement last week. By this summer all the cocoa beans and sugar in its chocolate will be fair trade. Yup, that's right. Not a fair trade "ghetto" variant that raises questions about the rest of the range . The whole bloody lot.

This is the latest in a series of moves by big brands to moving their whole product range to a socially responsible platform. An earlier post here talks about Lipton tea and the Rainforest Alliance. Kenco coffee now uses only Rainforest Alliance beans.
 
This is a good example of the natural evolution of brands:
1. A new trend emerges, in this case the increasing interest in "fair trade" products that pay a decent wage to 3rd world producers

2. Start-up, nimble, niche brands pick up on the trend, as use it as the platform for a brand positioning. In this case, Divine chocolate for example.

3. Big brands, with big volumes, struggle to respond to the trend. They have complex supply chains and manufacturing, and the cost of changing this is huge. Whilst consumer interest remains limited, the cost does not justify the investment. Leading brands may even get attacked for their practices, such as this online petition campaigning for Cadbury to go fair trade.

4. As time goes on, two things happen:
- The leading brands get their act together, working hard to respond to the trend
- Consumer interest in the issue grows
=> We then reach a "tipping point" where the payback justifies the investment

5. The big brands incorporate the new trend, and the niche brands no longer have a reason to exist. Unless they can re-position, they risk extinction.

6. The trend is no longer a trend. Its just how leading brands are.

The good thing about moves like this one by Cadbury is that its big brands who are the true force for change. Get this. A spokeswoman for the Fairtrade Foundation said the move would result in the tripling of fair trade cocoa sales for farmers in Ghana!

Comments

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[Charlotte Beckett]

Hi David

You raise great points about Fairtrade going mainstream as a brand. Just to clarify though, currently the only Cadbury product to be certified by Fairtrade is the Dairy Milk bar (in it's simple form, not the sub brands):

http://www.cadbury.com/ourresponsibilities/ethicaltrading/Pages/fairtrade.aspx

So a very important step in the right direction, but a bit of a way to go before we can honestly state that Cadbury is Fairtrade.

[David Taylor (brandgym)]

James,

Thanks very much for this excellent build. You add another important part of the equation.

another reminder of just how complex the whole area of BSR/CSR is, and that supply chain has gone from something you put up with to something of strategic importance!

David

[James Gordon-MacIntosh]

All of that is absolutely true, although it misses one bit in the chain.

Which is "there is enough production at high enough quality of the FairTrade/Free Range/ethically sourced product to satisfy the demands of a huge manufacturer".

Clearly, there has to be a virtuous circle of supply and demand here, but quite often it is supply as much as demand that is the sticking point.

Of course, once the big manufacturers are on board, the suppliers follow the money - as with McDonalds and Free Range eggs, for example: they couldn't do anything until there was enough supply. Once they did go Free Range, the market had to follow, so you get real change through the supply chain.

And then, of course, the next thing is that that standards are raised even further: traceability to source being the next big thing (I hope).