Supply Chain Organizational Governance

How Fairtrade Protects Company Supply Chains — and Brand Reputations

We caught up with Peg Willingham, newly minted Executive Director of Fairtrade America, to clear up the confusion around the concept of “fair trade”; and hear why Fairtrade is more important than ever.

Sponsored Content | / This article is sponsored by Fairtrade America | By Sustainable Brands | Published 4 years ago | About a 9 minute read

Image: A tea farmer | Danurwendho Adyakusuma/Unsplash

For over 20 years, Fairtrade International has been working to secure decent working conditions, fair prices and better terms of trade for the nearly two million commodity farmers in the Global South that produce some of our most commonly used food and textile crops.

We caught up with Peg Willingham, newly minted Executive Director of Fairtrade America, to clear up the confusion around the concept of “fair trade” and learn more about why Fairtrade is more important than ever.

Why should companies care about certifying with Fairtrade?

Peg Willingham: Great question! A few months ago, when I joined Fairtrade America, well-intended family and friends sent me congratulatory gifts of chocolates and coffee and earrings labeled as direct trade, or fairly traded, or fair trade certified. I can’t blame them for thinking they had nailed it, and I certainly appreciated their generosity. However, after thanking them (and, of course, eating those tasty chocolates!), I told them how proud I am to be joining Fairtrade — the longest established global certifier with the highest and most trusted standards. I explained that many brands they enjoy, like Ben & Jerry’s and Starbucks, have made the commitment to be Fairtrade certified because they recognize the value of knowing how their ingredients are sourced.

Thousands of products around the world are certified by Fairtrade International; demonstrating that businesses and consumers care about the people who grow and harvest the food we eat, the coffee and tea we drink, the clothes we wear and the flowers we put on our tables (the full list of brands and retailers we work with in the US can be found here). Fairtrade-certified brands share our vision that these commodities, which are primarily grown in developing countries and consumed in wealthy ones, should be traded on fair terms.

Fairtrade, first and foremost, means paying a sustainable price so producers can thrive, not just barely survive. Ultimately, everything — climate adaptation, child labor, workers’ rights — all circles back to farmers and workers having enough money to invest in themselves and their futures, which in turn strengthens the supply chain that companies rely on.

Companies should certify with Fairtrade to provide credibility, accountability, guidance and assurance on their sustainability efforts. Fairtrade’s certification tackles the three pillars of sustainability — social, economic and environmental. Fairtrade is a true partner for companies looking for a sustainability certification that addresses all of these, has a proven track record, and continues to grow and adapt to the current environment. Our history, expertise, and global reach make us the most reliable and effective.

What are the biggest challenges your organization faces?

PW: My anecdote about my family and friends highlights the fact that while shoppers want to support ethically and sustainably sourced products, there is an ever-growing array of claims that sound better than the reality behind them. This is not about fearing competition — it’s about wanting a truly fair deal for the producers who deserve it; and it’s about giving shoppers choices that accurately reflect their values. A related challenge is that, unlike the “organic” label, the term “fair trade” is not regulated; so, a company can put words on packaging without needing to define or explain what they really mean. The blame doesn’t fall entirely on companies, who generally want to do the right thing. Some organizations are happy to charge companies for a certification that would not hold up well under careful scrutiny.

While it’s encouraging that companies find value in promoting their connection to “fair trade” as a concept — by not fully committing to sourcing from a certified Fairtrade producer, paying on Fairtrade terms, and allowing independent audits of their claims, companies erode trust. When companies use “fair trade” as a marketing term, as opposed to truly certifying, it is a disservice to the farmers who work so hard to meet Fairtrade’s rigorous standards and may expose those companies to reputational risk when their claims can’t be corroborated. Shoppers don’t like to be fooled by empty rhetoric.

What kind of companies benefit the most from certifying as Fairtrade?

PW: Companies of all sizes find value in Fairtrade certification, although global brands can benefit in particular from the fact that the Fairtrade International system operates around the world. We’re a one-stop shop for them. A key to long-term success is for a company to be clear about what they’re hoping to get out of Fairtrade certification. From that point on, we can work in partnership on a solution that feels right and targets the issues they care about most.

The Fairtrade mark communicates assurance to shoppers, which can be a competitive advantage on shelf. A recent Nielsen study showed that fair trade chocolate and coffee sold at five times the rate of conventional products — so adding Fairtrade to your brand makes a lot of business sense!

Certain product categories are at higher risk from serious problems like child labor, so brands selling those goods need a trusted, rigorous certifier to help them monitor and remediate this in their supply chains. The Fairtrade International system has a strong track record of combatting child labor by investing in a youth and community approach, as well as targeting the root of the problem — poverty.

Finally, most brands work with us because they feel in their organizational bones that it’s the right move to support the farmers and workers at the beginning of their supply chain in economic, environmental and social sustainability. The breadth and richness of our standards are really attractive to those looking for a more robust solution that covers many areas with one sweep.

What benefits does Fairtrade provide to certifying companies?

PW: Our core, always-on program is meticulous, comprehensive certification. We handle the supply chain mapping, auditing and labelling for all our brand partners. Really knowing where their products come from is a huge benefit for companies who mainly deal with traders and other intermediaries, obscuring the stories and people behind their goods. By being on the ground, we can provide deeper color and storytelling ability for brands that want to highlight the people behind their products. Decades of visits and audits have created a robust photo, video and asset library with images, voices and narratives from more than 100 countries. We let the farmers speak for themselves, which is the ultimate test of authenticity. This is also in keeping with another key element of the Fairtrade movement: Producers represent 50 percent of Fairtrade International’s governing body, influencing major decisions we make.

Companies appreciate that we’re promoting their products both to shoppers and retailers. Shoppers choose Fairtrade because they want sustainable choices; and we highlight brand partners in our marketing programs to help generate awareness among shoppers who want to vote with their dollars. We run campaigns seasonally to increase the purchase of Fairtrade-certified products.

We also offer brands the opportunity to invest in causes and Fairtrade programs they are most passionate about, beyond the Fairtrade minimum price and the Fairtrade premium (an additional payment supporting democratically chosen community projects like clinics, schools and business improvements). A compelling example is our Women’s School of Leadership program that builds the skills of women farmers in Africa and Asia. Graduates go on to disseminate sustainable best practices, benefiting their communities and strengthening companies’ supply chains. We also work with companies to support farmers in developing new ways to adapt to the effects of climate change; which is increasingly important for brands, farmers and shoppers.

What would you say to companies that might want to become Fairtrade certified but can’t make changes right away?

PW: Your business can be Fairtrade certified if you source coffee, tea, cocoa, sugar, bananas, avocados, vanilla, spices, cotton and similar goods from developing countries. Although the certification process involves effort initially, it only takes a few weeks for companies to be certified to sell Fairtrade products. Brand partners can tap into our existing and established network of Fairtrade value chains. Many companies already have relationships with traders that offer Fairtrade-certified goods, making the switch even easier.

When a brand has a very specific product profile outside our existing Fairtrade supply system, we connect them to our global network of producers to source samples and certify new producer groups to solve that problem. In one instance, a company was willing to wait almost a year to find exactly the right cocoa quality they were looking for, and then quickly integrated the new supplier and started marketing their products as Fairtrade certified. We applaud that level of commitment and integrity, which pay dividends over time because shoppers really want these ethical, sustainable products.

How do you envision Fairtrade’s impact progressing over the next 5-10 years?

PW: Fairtrade International is planning to announce our new five-year strategy shortly. It’s visionary and ambitious, while keeping our focus on what matters most: the people who produce Fairtrade goods. Our new strategy also reflects input from our business partners, catalyzing us to streamline our processes and introduce innovative supply chain solutions. There has never been a better time for companies to engage with the Fairtrade movement.

To expand our impact and enhance our value to companies, we have set benchmarks to deliver a living income to farmers and workers. Companies that commit to Fairtrade certification will continue to see clear, measurable benefits.

Climate change is an increasing threat to producers’ livelihoods. Insects and diseases that destroy coffee, cocoa and banana trees are proliferating as temperatures rise. Decreased rainfall reduces crop yields; while too much rain, like Cyclone Idai last year, wipes out an entire year’s harvest — and income. The family farmers who grow most of the coffee and cocoa we consume actually contribute the least to climate change, but suffer its effects most acutely. In the years ahead, the problem will unfortunately only intensify, which means Fairtrade International and our partners will need to do even more — including reforestation and other sustainable practices.

Finally, Fairtrade will continue to scale up our services to young people in farming communities, while tackling the worst forms of child labor. Young people around the world are not following in their families’ footsteps and becoming farmers — they simply don’t see a future in it. The average age of a cocoa farmer in West Africa is 50 years old — and the average life expectancy is 60. We’d also like to replicate the success of our women’s leadership programs by building the next generation of young agricultural entrepreneurs.

Thanks for giving us this opportunity to tell the Fairtrade story. We want to be brands’ preferred partner to make supply chains more sustainable and ethical so family farmers and workers can earn decent livelihoods. We hope to partner with more companies to make a meaningful difference — to their suppliers, their customers and their bottom line. Come join us!