Global Policy Forum

By Rory Van Loo

A label already on chocolate will soon appear on bananas

Consumers have saved countless animals by buying tuna labeled as "dolphin-safe" and cosmetics that are free from animal testing. Now a new label is entering the mainstream, only this one aims to help people.

The fair-trade label is currently found on chocolate, coffee, and tea in the United States, and is scheduled to appear on bananas by the end of the year. The label assures shoppers the item was originally purchased at an above-average price. That extra money is intended to enable farmers to feed their families and send their children to school rather than to the fields.

TransFair USA, based in Oakland, Calif., began issuing the American fair- trade label in 1999 as part of a consortium of 17 national fair-trade labeling organizations in North America, Europe, and Japan. The group's inspectors make annual visits to producers throughout Africa, Asia, and Latin America to ensure that the producers operate democratically and use some of the fair-trade premium for social, economic, or environmental projects.

Fair-trade products are already available in the nation's three largest grocery chains - Kroger, Safeway, and Albertsons - and through other chains including Hannafords, Shaws, Stop & Shop, Trader Joe's, and Whole Foods. Sales reached $131 million in 2002, a 53 percent jump from 2001. "Fair-trade goods represent 0.01 percent of the total food and beverage industry, which makes them look really minuscule and irrelevant," says Gwynne Rogers, a strategic-marketing analyst at the Natural Marketing Institute. "But a 50 percent growth rate at the $131 million level is outstanding and uncommon.... If fair trade can successfully move its brand to other categories besides coffee, as it should, then it will have the growth potential to become significant in the food and beverage industry."

Most fair-trade sales do come from coffee, which in addition to large grocery chains can also be found in independent coffee houses and in chains such as Starbucks and Dunkin Donuts. Even Procter & Gamble, after years of pressure from activists, earlier this month launched a limited high-end fair-trade coffee brand available online.

The success of coffee has set the tone for the sale of other fair-trade goods. "In Europe, coffee was the first to arrive and raised initial awareness about fair-trade products, and in many countries other products like bananas are now selling as well as coffee," says Anneke Theunissen, a spokeswoman for Fairtrade Labelling Organizations International, the headquarters for the international fair-trade consortium in Bonn, Germany.

Fair-trade products help the farmer without costing consumers much more, advocates say, because they cut out the middleman. "Farmers become their own export company because we require licensed importers to purchase directly from them," says Nina Luttinger, business accounts manager for TransFair USA.

During a visit to Guatemala in 2000, graduate student Tara Suring of Madison, Wis., heard stories from Guatemalans about the "social damage" that large banana plantations had wreaked on the country. "What I remember most is the visible fear of the people as they would tell what they had experienced because of the plantations," she recalls.

Then, one day while shopping at her local grocery store, she spotted a fair-trade logo on a Divine chocolate bar, which is made from premium cocoa in Ghana and costs about 85 cents for a 1.5-ounce bar. "Now I treat myself to it about once a month," she says. "I am the type of person who notices a price difference of even 10 cents, but I justify the extra expense to buy fair trade because so often we don't know anything about the people providing our food, and this is one way to establish that relationship."

Fair-trade products can be expensive, but the higher price can be misleading, says Rodney North, spokesman for Equal Exchange, the leading US fair-trade importer. "There's a real misconception out there that something has to cost more just because it is fair trade," he explains. "But you have to compare apples to apples. Fair-trade products are often organic or fit into the specialty food category, and when you compare them to others in those categories they are similarly priced or even cheaper."

A look at the grocery shelves supports that assertion. Peach Oo-la-long, which launched in February of this year as the first fair-trade-certified bottled tea, ranges in price from $1.29 to $1.49 and on average costs 20 cents more than Snapple beverages. Compared with other organic bottled teas, however, Peach Oo-la-long sells for about the same price at an estimated 2,000 retail locations nationwide. "Peach Oo-la-long has been our most successful product introduction to date, out of a total of 13 different tea varieties," says CEO Seth Goldman of Honest Tea, which controls about 60 percent of the organic tea market.

Despite its growth, the American fair-trade industry lags far behind Europe's. One in 5 bananas sold in Switzerland is fair trade, as is 14 percent of all ground coffee sold in England. The list of fair-trade labeled products in Europe includes rice, mangoes, sugar, fruit juices, and even soccer balls. Europeans have been made aware of such products thanks to government-sponsored education campaigns - something not found in the US. "As of January 2003, only 6 percent of US consumers had heard of fair-trade coffee, and 2 percent had actually bought it," says Jay Molishever, a spokesman for the National Coffee Association. "Fair-trade coffee is a valid approach, but it is not the entire solution because the volume sold as a percent of the market is extremely low."

Regardless, fair-trade labeled products can be found in stores from Langdon, N.D., to Savannah, Ga., and consumers such as Janet Ranney, a clinical psychologist in Tucson, Ariz., are content to play even a small part. "When I walk into a new store I start looking around to see what they have that is fair-trade certified," she says." "It's just a little thing, and I'm just one person, but it is important for me to try to support something that's creating health and wellness in global villages."

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