What Economic Downturn? Fairtrade Looks To The Future

With a record rise in sales bucking the trends of the economic downturn and new markets opening up in developed Asia, South Africa and Mexico, Fairtrade looks set to take centre stage on supermarket shelves the world over.

With a record rise in sales bucking the trends of the economic downturn and new markets opening up in developed Asia, South Africa and Mexico, Fairtrade looks set to take centre stage on supermarket shelves the world over.

Despite the global financial crisis, Fairtrade Labeling Organizations International (FLO) reported a 22% rise in global sales of Fairtrade certified products in 2008, with annual sales of over $4bn (USD). According to a major survey recently conducted by FLO, half the citizens in the West now recognize the Fairtrade Mark and nine out of ten of those people see it as a trustworthy label – not bad for a movement that started out in new age shops and niche marketplaces back in the 1980s.

The Fairtrade label is increasingly becoming essential for doing business in many markets especially in the sale of bananas and coffee, Fairtrade’s two strongest performers. Major retailers like Tescos (UK) now have their own range of Fairtrade products and in March 2009, Cadburys became the first major brand of chocolate to announce the launch of a mainstream Fairtrade-certified product. This follows the consumer-driven pattern of other global brands such as Starbucks, Ben and Jerry’s and Candico Sugar who have changed their procurement policies to buy more Fairtrade ingredients.

“Fair trade” advocates the payment of a just price to developing-world producers of agricultural products such as bananas, coffee, cocoa, flowers, cotton, fresh fruit, herbs and spices, sugar, rice, tea and wine. However, the gold mining industry might be the next to get a Fairtrade makeover, as FLO and the Alliance for Responsible Mining are reportedly working on a new standard for the precious metal.

There are currently two global standards for Fairtrade products – one for the US/Canada (the Fair Trade Certified Mark) and another for the rest of the world (International Fairtrade Certification Mark or just FAIRTRADE Mark). In the future, however, the standards are likely to merge to create one universally recognized label, most likely based on the existing International Fairtrade Certification Mark.

To earn the right to display either mark on their products, retailers and producers must be able to ensure the source of production has been through the FLO-authorized certification process, overseen by a third party audit of facilities – taking worker rights and environmental issues into consideration - as well as looking distribution channels and supply chains.

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