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Marketers Eye Fair Trade Certified As the New ‘Green’

Brand Week

Organic has been around for about 15 years, and “green” marketing is so last month. So marketers looking for the next socially responsible effort are flocking to the Fair Trade Certified category, whose products are getting more shelf space nationwide.

So far this year, 284 Fair Trade Certified products—typically coffee, tea, herbs, cocoa and chocolate, fruit, sugar, rice, spices and even cut flowers—were launched in the U.S. compared with 130 last year and 17 in 2003, according Mintel, Chicago.

The designation, which is handled exclusively in the U.S. by TransFair USA, Oakland, Calif., means that farmers in such locations as Ghana or Costa Rica work in safe labor conditions, use environmentally friendly practices and are paid at least a minimum floor price for their crop. These family farmers may also belong to a co-op that democratically decides how to invest their profits in building schools, health clinics or developing better business and sustainability practices.

Products with such designations are seen as niche, such as Ben & Jerry’s Chocolate Heath Bar Crunch ice cream or Hershey’s Dogoba organic chocolate bar. But the Fair Trade Certified category appears to be trekking the same path that organic foods took before bursting into mainstream grocery stores. In April, Wal-Mart began to stock six Sam’s Choice Fair Trade Certified gourmet coffees. In May, the Wyndham Hotels and Resorts chain introduced Fair Trade Certified Starbucks coffees in hotel restaurants, cafes, bars and via room service. This month, eBay launched www.WorldOfGood.com, an e-marketplace offering one-stop shopping for products that have been certified by TransFair, as well as from such groups as Co-op America and Aid to Artisans. 

 Retail sales of Fair Trade Certified coffee alone grew tenfold between 2001 and 2006 to $730 million, according to TransFair USA, which received a significant boost when Wal-Mart added the coffee SKUs to its shelves.

“Every small coffee roaster in Bareto or Santa Cruz is important to us, but the reality is a big retailer is like a faucet,” said Anthony Marek, spokesman at TransFair USA. “And if you’re a drip, that faucet can help tens of thousands of farmers across the world.”

In October, which will be the fifth annual Fair Trade Month as designated by TransFair USA, wine will be eligible for certification. And that will give more fodder for such mass merchandisers as Wal-Mart, Sam’s Club and Target to add to their current inventory of Fair Trade Certified SKUs.

Not surprisingly, Starbucks is a major supporter of Fair Trade Certified coffee. According to the Seattle-based chain, Starbucks locations in more than 20 nations sell Fair Trade Certified coffee and regularly feature Fair Trade blends as “coffee of the week.”

Starbucks will promote Fair Trade Month  with POP and packaging flagging its Fair Trade certified Café Estima blend. “Since our founding, we have worked to positively impact the lives of farmers and their communities,” Howard Schultz, CEO and chairman at Starbucks, said in a statement. “This [coffee] is an example of our commitment to doing business the right way.”

However, Fair Trade is lacking significant participation from big brand food marketers. Kraft, Hershey and Mars, for example, tuck their Fair Trade marketing into the social responsibility pages of their Web sites.

“Right now Fair Trade is for small companies in big ways and big companies in small ways,” said Lynn Dornblaser, director-CPG trend insight at Mintel.

She added that helping farmers in Third World countries is low on the list of consumer priorities because they don’t know much about it. Even the definition of what is organic confuses consumers. Also, Americans tend to be more focused on what is happening at home than in other countries, Dornblaser said.

That observation was supported by a CMO survey from Duke University released this month that indicated some companies will back off from campaigns that “benefit society” as the economy worsens.

“Marketers, in general, believe their customers are focusing on economic criteria in the selection of products and services during this downturn,” said Chris Moorman, senior professor of business administration at Duke’s Fuqua School of Business and one of the survey’s authors. “This is reflected in marketers prediction that price will be their customers’ No. 1 priority over the next 12 months.”

Perhaps that is one reason why Divine Chocolate, which was founded in the U.K. in 1997 and is the world’s first farmer-owned Fair Trade Certified chocolate brand, is positioning itself as an upscale, nightlife confection by sponsoring exhibits and samplings at trendy galleries and film festivals in London, New York and Chicago. Among the company’s taglines: “Heavenly chocolate with a heart,” “Like love, only more so” and “Chocolate makes the world go round.”

The brand also is courting community groups to use its bars as a fundraising tool that can be positioned as being more upscale than similar kits from Mars and Hershey, and that pack the additional sales pitch of providing proceeds on a local level as well as to cocoa farmers in Ghana.

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