All's fair in love and coffee. At least, it's starting to look that way in supermarkets. Increasingly, retailers are carrying Fair Trade-certified products, chiefly coffee. Many of these retailers said these variations bring in greater sales than their traditional consumer packaged goods counterparts.
Stormans, a two-unit operator in Olympia, Wash., has been selling Fair Trade coffee provided by Equal Exchange, a Canton, Mass.-based worker-owned cooperative, since 1994. "It is by far the No. 1 selling coffee in our store," Kevin Storman, co-owner, told SN.
A dire social situation fuels the Fair Trade practice -- namely that of the Latin American coffee farmers who, until the advent of this practice, were barely receiving enough money for the crops to support their families. Fair Trade certification ensures that these farmers will be paid, at minimum, $1.26 per pound for their coffee beans. Undoubtedly, it is this grassroots component that lends appeal and has helped sell product. However, sources told SN the quality of the products and their reasonable cost also contribute to the label's success.
"To some degree, it's able to speak to both segments of the consumer market: people who are looking toward a value and a quality coffee, as well as those people that value what it stands for and what it's about and what it's doing for our world," said Storman.
He devotes a four-foot fixture to Fair Trade coffee. Although Storman said consumers in his region are pretty aware of the Fair Trade label and what it symbolizes, he displays informational pamphlets from Equal Exchange near the merchandise.
Awareness levels may vary throughout the country, but even the larger, national grocery chains are reporting success with Fair Trade products.
According to Elizabeth Bertani, spokeswoman for Larry's Markets, Seattle, "We carry several lines of coffee which are Fairly Traded, and plan to expand the program in the future." Recent reports indicate that Ahold USA, Chantilly, Va., is poised to launch Cafe JaVaNa, a line of private-label, Fair Trade coffee beans in a large cross section of its stores, including Giant Food, Landover, Md. Like other Ahold banners, Giant will offer five varieties of Fair Trade-certified coffee in all 199 Giant and Super G stores: Breakfast Blend, French Roast, Colombian, Sumatran and Sumatran Decaf.
Shaw's Supermarkets, based in West Bridgewater, Mass., started carrying Equal Exchange coffee in 1996, and has expanded the program over the years based on growing sales. Currently, the retailer offers the Equal Exchange coffee program in about half of its more than 200 Shaw's and Star Market units. Cocoa products have been added to the retailer's Wild Harvest section in 120 stores, and 12-ounce packaged coffees will be added to most stores shortly.
"Carrying Equal Exchange Fair Trade coffee, hot cocoa and baking cocoa just makes good sense," said Teresa Edington, spokeswoman for Shaw's. "The product has great quality, the price is reasonable, and many of our customers appreciate helping small farmers. More and more we are seeing companies, including suppliers like Equal Exchange, trying to find new and innovative ways to bring goods to market while also looking to go the extra yard for farmers," she said.
In fact, many said this is a phenomenon not unfamiliar to the food industry, and that it closely resembles the early stages of the push toward organically certified foods.
"There is a pattern here which repeats a pattern that we've seen before," said Rodney North, spokesman for Equal Exchange. "For example, with organic foods, a lot of it started with your consumer cooperatives who are a very small niche of the American supermarket industry. That's where the industry found its feet and found its first audience, and then it expanded into more mainstream channels. [The Fair Trade label] is kind of like the [U.S. Department of Agriculture] organic seal. It's something that enough people are looking for that it's helpful to have it," North added.
Just how helpful is something grocers can't ignore, particularly those serving a clientele that guarantees a healthy return on investment with these types of products.
"Of course, supermarkets want to capture more margin. If they can sell a premium-priced product that turns as fast as a typical product, they will make more money," said Scott Van Winkle, principal at investment bank Adams, Harkness & Hill, Boston. "The challenge for Fair Trade is to build up enough critical mass so that they can compete closely on price. If they can remove price sensitivity in any product they can, they will, and that's what Fair Trade does to some extent: It substitutes social cause for price sensitivity."
In any event, Fair Trade items appear to be moving full-steam ahead. TransFair USA, the only domestic, third-party certifier of Fair Trade products, claims to have certified 18.7 million pounds of coffee for the year ended Dec. 31, 2003, up from 9.8 million pounds the prior year.
According to the "2003 Report of Fair Trade Trends," published by the Fair Trade Federation, Washington, total 2002 sales for the Fair Trade industry in North America grew by 44% over 2001 sales, to $180 million. The majority of FTF members' sales were in coffee, which accounted for $16.3 million, or 29%, of total Fair Trade sales for the year.
Other food items have slowly begun to pop up sporting Fair Trade certification. Some supermarkets are already carrying Fair Trade bananas, for example. Other products grown in third world regions, like sugar, are ready for certification. As these products enter the Fair Trade mix, the opportunity for future retail profits will no doubt also increase.
"In an ideal situation, what you're trying to do is cut out the middleman who is aggressively squeezing the farmer," Van Winkle said. "That social value certainly fits in there for a growing percentage of the population. Sales go up when supermarkets offer 'Five Percent to Charity' days and things of that nature."
Although Fair Trade food products may cost slightly more than non-certified items, grocers don't appear to be worried.
"I know that if you offer quality product that costs a little bit more, there's a large segment of the population that's willing to pay that," Storman said.
Many supermarkets are carrying at least some Fair Trade products. The following are working with the Canton, Mass.-based Equal Exchange in providing these Fair Trade-certified products for their customers*
Kroger: coffee and tea
Albertsons (Pacific Northwest and Bay area): coffee
Safeway (including: Genuardi's, Dominick's, Randalls, Tom Thumb, Von's): coffee and hot cocoa mix
Shaw's (including Star Market): coffee, hot cocoa mix and cocoa baking powder
Stop & Shop: coffee, tea and hot cocoa mix
Heinens: coffee, tea, cocoa mix and baking cocoa
Hannaford Bros: coffee and hot cocoa mix
Whole Foods Market (West Coast, Chicago): coffee and hot cocoa mix
*Some chains, like Shaw's, have a number of Equal Exchange products in every store. Others, like Albertsons, stock the products only in select stores.
Source: Equal Exchange
The Fair Side
CANTON, Mass. -- Part of the everyday work environment at Equal Exchange, a worker-owned cooperative here and major distributor of Fair Trade coffee, often involves trips abroad. In fact, according to Rodney North, spokesman, every employee during their first two years at the company spends a week with one of the third world farmers who supplies them with the coffee beans for their products.
"It's a benefit, but also part of the education of our staff. We want them to understand what it's all about," North said.
However, Equal Exchange gets grocers in on the first-hand experience by sponsoring trips for supermarket executives as well.
Kevin Stormans, one of the owners of the two-store Stormans operation in Olympia, Wash., was privy to one such trip to Peru.
"It was an incredible experience. I spent some time picking beans with the farmers and living in the farmers' house," Stormans told SN. "It's hard to wrap your brain around all of that because it's such a different world. But you really realize what they're doing is making an impact, and it's not just a 'foo-foo' cause -- it has some real substance to it.
"You can read books and look at pictures at how people live and how they work and what the conditions are, but until you go there and you live there, you don't really get it."