Fairtrade Goods Continue To Perform Strongly Despite Economic Downturn

New figures issued by the FLO (Fairtrade Labeling Organizations International) show that global sales of Fairtrade products have risen by a massive 22% during this last economically- turbulent year. Consumers spent an estimated €2.9bn (or $4bn USD) on goods carrying the Fairtrade mark between mid-2008 and mid-2009 with global sales doubling for Fairtrade tea (112%) and Fairtrade cotton (94%). Fairtrade’s bestsellers, coffee and bananas, rose by 14% and 28% respectively.

Fairtrade goods tend to be premium-priced compared to similar, non-Fairtrade goods and subsequently sales rises were particularly pronounced in wealthier Western countries. Sales rose by over 50% in Australia, New Zealand, Canada, Finland and Germany and a massive 75% in Sweden and 73% in Norway. Fairtrade’s strongest markets are within the UK and US which saw rises of Fairtrade certified products sales of 43% and 10% respectively.

New markets for Fairtrade products are growing in Eastern Europe, East Asia, and South Africa too and projected global sales figures for next year are even higher, with the UK’s Fairtrade Foundation suggesting as much as a 40% increase in 2010.

Growth in consumer awareness and demand has lead to significant changes in the sourcing policies of huge global businesses such as Starbucks, who now sell only Fairtrade coffee in its UK and Ireland outlets. Another high profile global brand to recently adopt Fairtrade principles is Cadbury’s, whose new sourcing policies will have a major impact on the Fairtrade chocolate, and chocolate industry generally, in the coming year.

There are now over one million Fairtrade producers and workers in 58 countries; around 3000 traders of Fairtrade certified products in over 73 countries and 60 countries where such goods are available.

There are two main Fairtrade standards in use in North America and the rest of the world, but rather than competing, they are recognized by consumers in their respective regions. In order to display either of these marks on products, retailers and producers must ensure the source of production has undergone a FLO-authorized certification process involving a third party audit of the production facilities and subsequent distribution and supply chains. It is likely that the International Fairtrade Certification Mark will become more widespread in North America in the future with the existing Fair Trade Certified mark being phased out. This mark is administered by TransFair USA and TransFair Canada.

As Fairtrade is adopted by leading multinationals, they are demanding more consistency and harmonization of Fairtrade issues to reduce administration costs of gaining certification. In particular, there is a trend towards use of a single label globally – the International Fairtrade Certification Mark. The standards in each country necessary to achieve this label will also become more closely harmonized.