Sam39s own Member39s Mark bagged coffee was the first fair trade item sold Photos courtesy of SAMrsquoS CLUB

Sam's own Member's Mark bagged coffee was the first fair trade item sold. Photos courtesy of SAM’S CLUB

SN Whole Health: Club Stores Trade Up

Club stores have emerged as a fair trade champion

Consumers might not think a club store that sells mayonnaise by the gallon could also be a leader in the fair trade movement, but Sam’s Club would beg to differ.

Over the past few years, the Bentonville, Ark.-based division of Wal-Mart Stores [4] has become a champion of fair trade on a bulk scale, increasing its assortment of certified products and promoting the benefits they provide to shoppers. Starting with its Members Mark line of private-label coffee in 2007, the company has expanded the number of items bearing the label to include single-serve coffee pods, bananas, dried cherries, mangos and bell peppers.

The bakery department has also become a stronghold for fair trade, with items offered under the retailer’s Artisan Fresh line, including angel food cake and banana nut bread, now bearing the label.

Other club stores have shown interest too, particularly in the coffee category. BJ’s Wholesale Club [5] sells an 80-pack of Green Mountain Coffee “Columbia Fair Trade Select” pods, while Costco [6] carries pods of Newman’s Own coffee along with its own Kirkland Signature bagged coffee certified under fair trade.

“At the end of the day, it’s about giving our members access to the products they know and love,” said David Walker, senior brand manager with Sam’s Club.           

Read more: Fair Trade USA Will Not Indicate Percentages [7]

Looking at surveys and sales data, it’s clear the fair trade label is indeed one that shoppers respond to. According to market research firm SPINS, sales of fair trade-certified products in the second quarter of this year were up 34% from the same period a year ago. Recent reports have shown that category sales increase by as much as 13% when fair trade products get added to the mix, and that nearly a third of shoppers report the label is likely to increase their interest in purchasing a product.

But club stores’ interest in fair trade goes beyond just the label’s popularity. Battered by environmentalists and eco-minded consumers critical of their large size, companies like Sam’s Club are also hoping to burnish their reputation as responsible corporate citizens.

“They’re trying to sharpen their image with consumers as being more socially and environmentally aware, and they’re asking their suppliers to do the same,” said Rob Bousquet, a shopper marketing manager with Green Mountain Coffee who works with club stores.

Fair Trade Values

With their limited assortment of carefully selected products, club stores have a history of nurturing brands and their supply chains. Fair trade values align with this philosophy by providing training and higher wages for workers.

“There are far fewer SKUs in a club store than in a mainstream grocer, so they put a lot more care into each product,” said Sri Artham, director of strategic accounts with Fair Trade USA, the country’s largest certifier, which has worked closely with Sam’s Club.

Part of that care and maintenance means traveling to the regions where fair trade products are produced. Walker, along with Sam’s coffee buyer Jeff Seyfarth, recently traveled to Colombia to meet with avocado, plantain and coffee farmers. Reflecting on the trip, Walker said the fair trade program brought local farmers together and gave them access to a seed stock that increased their crop yield.

“One farmer mentioned that fair trade provided a forum in which farmers can gather and share information,” he said.

Improvements like this, Walker noted, have increased the quality and efficiency of the products he sells. But club stores still have an uphill battle on the opposite end of the equation — selling to the customer. Research shows that, while they like the concept, most consumers don’t fully understand what the label itself means. And many are skeptical of fair trade’s expansion into mainstream products and stores. Fair Trade USA’s decision to expand certification to large-scale plantations last year, for instance, was criticized by many consumers and advocacy groups.

Infographic: Fair Trade Volume Grows [8]

“The fair trade movement has to find its position in the conventional market environment without any mission drift,” wrote Marion Struber, a research analyst with Credit Suisse, in a recent note to investors.

Artham believes the movement into mainstream is a sign of success for fair trade. He stressed the importance of educating shoppers on what the label means by connecting them to the farmers.

“I think consumers really respond to seeing the farmers and hearing their stories,” Artham said.

This is right up the alley for club stores, which are known for their generous sampling programs. Sam’s Club plans to offer tastings of select fair trade products over the holiday season. The majority of its promotional efforts appear online through dedicated web pages, blog posts and social media. To celebrate Fair Trade Month in October, the Sam’s Club website hosted a page featuring Green Mountain Coffee’s educational campaign, called “Great Coffee. Good Vibes. Pass it On.”

Earlier this year, Walker wrote a blog post on Wal-Mart’s sustainability website, walmartgreenroom.com, discussing Sam’s Club’s efforts to source sustainable palm oil and expand its fair trade footprint. He mentioned that an acquaintance had asked him if the company was moving too quickly on both fronts.

“We’re helping create livelihoods for small- and medium-sized farmers while protecting habitats for orangutans and other animals,” Walker wrote. “And we’re doing it in a way that we can still provide affordable, high-quality food to our members. Why wait for that?”

Sidebar: Club Competition

For retailers like Sam’s Club, offering fair trade products isn’t just about being a more ethical operator — it’s about gaining a competitive edge. With consistent double-digit sales growth and more than $1 billion in global revenues, fair trade products have become part of Sam’s Club’s strategy to grow sales and pull even with its closest rival, Costco.

In a recent interview with The Wall Street Journal, Sam’s Club CEO Rosalind Brewer, who was appointed in February, said she hopes to guide the company from its current $54 billion in yearly sales to more than $100 billion. Costco currently sees $97 billion in total sales. While she didn’t mention fair trade specifically, Brewer did note that Sam’s Club has increased its assortment of fresh, sustainably sourced goods and begun targeting natural and organic consumers as part of its overall strategy.

“We do more to support a fresher basket than what we’ve done in the past,” Brewer said. “We have a lot more organic food and higher-quality produce, seafood and meat.”

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