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Fair Trade Brings Big Sales and a Clear ConscienceThursday, July 24, 2014 > 09:37:50
(Australia Broadcast Corporation)
Brooklyn Roasting Co. has a booming business based on helping people thousands of miles away.
Ninety percent of the coffee the New York-based company sells is Fair Trade — certified as produced by people who are treated and paid well.
Being socially responsible pays off for Brooklyn Roasting, which sells to restaurants, food stores and the public through its website. Sales of its Fair Trade coffee, which comes from Mexico, Peru, Indonesia and Ethiopia, have soared from $900,000 in 2011 to $4.4 million last year. They are expected to reach $6 million in 2014.
"In a thoughtful urban center like New York City, I think it's a smart business decision to be the company known for responsible coffee sourcing," co-owner Jim Munson says.
Demand for Fair Trade products is rising as people become more aware of how their food and other products are made. That makes the Fair Trade market a growing opportunity for small business owners. While companies sell Fair Trade food, clothing and bedding products because they believe in being socially responsible, the goods can also be part of a marketing strategy, says Russell Winer, a marketing professor at New York University's Stern School of Business. Sixty percent of shoppers are willing to pay the higher prices that Fair Trade items tend to have, according to a 2013 study he co-wrote.
This is how it works. Goods — coffee is the best known, but there's also chocolate, sugar, coconut, cotton, tea, flowers, nuts, fruits and vegetables — are certified as Fair Trade by a handful of organizations around the world. They pledge to visit farms and production areas to inspect working and living conditions.
In return for the certification, product manufacturers pay a premium. For coffee, it's 20 cents a pound; for chocolate, $200 per metric ton. This cost is usually passed on to shoppers, who can tell products are certified by labels on packages.
No organization tracks the amount of Fair Trade products sold in the U.S., but Fair Trade USA, which says it certifies 90 percent of the products in the country, estimates the domestic market at $2 billion, just a sliver of U.S. grocery sales. It bases that number on a 2011 estimate by Fairtrade International, a global organization that sets certification standards for Fair Trade products.
At Whole Foods supermarkets, some customers specifically request Fair Trade goods, says Dwight Richmond, a purchasing executive at the chain. Whole Foods has increased its selection of Fair Trade chocolate by 350 percent in the past five years, he says.
PACT clothing, which sells garments made from organic cotton, launched a line of Fair Trade clothes this year. It started selling T-shirts at 70 Whole Foods stores in the Midwest, California and Texas, and sales were so strong that the chain has ordered shirts for more of its U.S. stores, PACT co-owner Jeff Denby says. His San Francisco-based company buys cotton directly from farmers in India and has the clothes manufactured in a factory there.
"We keep getting requests from stores every week but we can't keep up with the demand," says Denby.