Ethical Goods Extend Beyond Costly Coffee

The fair trade market may still be growing at a rapid rate, but exclusive research carried out for Marketing Week shows too few consumers are aware of the diversity of products or the range of retailers that stock them. 

The brand most heavily associated with the term “fair trade” is The Co-op, according to exclusive research carried out for Marketing Week by Lightspeed Research. The retailer gains 40% of responses as the first brand consumers think of when asked to consider fair trade products, compared to its nearest rivals Sainsbury’s at 8% and Cadbury at 7%.

Some of the brands most associated with both fair trade and corporate social responsibility, such as Cafédirect, Divine and Marks & Spencer, achieve 3% recognition as the first brand that comes to mind for consumers.

Ralph Risk, marketing director at Lightspeed Research, says: “I don’t think The Co-op coming top is too much of a surprise. The Co-op does have a general image of doing good, which falls in that area; it’s a natural fit for its brand. The likes of Cafédirect and Divine are much smaller brands, so you wouldn’t expect them to be as well known as The Co-op.”

The Co-op is also where consumers who want to buy fair trade products would naturally think to look for them. Indeed, 56% of people claim they would look to The Co-op to buy such goods, while 55% would turn to Tesco, 50% to Sainsbury’s and 40% to Asda. M&S, which promotes its Plan A marketing campaign to demonstrate its corporate responsibility, gains just 33% of the vote, Morrisons gets 32% and Oxfam 29%. Local independent shops and other charity shops, which you might think consumers would consider a natural home for fair trade goods, trail with 12% and 9% respectively.

Ironically, when people actually buy fair trade products, they do so most often at Tesco (35%), while The Co-op sits behind at 32%. And while 29% might think of Oxfam as a natural home for fair trade, just 5% buy their items from there.

“People like to buy products where they do their usual shop,” says Risk. “Few people would make a special trip to another retailer to buy fair trade goods, but most are happier to buy fair trade products where they’re already doing their other shopping.”

While the UK fair trade market grew from £493m in 2007 to £712.6m in 2008, according to the Fairtrade Foundation, the research indicates that few consumers are aware of the diversity of fair trade products available to them. Just 17% of people know the full breadth of goods available to buy, according to Lightspeed Research’s findings.

While 72% of people know that coffee can be bought with fair trade certification, with 63% for tea and 58% for chocolate, just 10% are aware that fair trade flowers exist, and only 6% are aware of fair trade beauty products.

“I must confess that coffee, tea and chocolate are the categories that first spring to mind for me too,” says Lightspeed’s Risk. “The Fairtrade Foundation perhaps needs to promote the other areas better. This needs to be done through better marketing and messages about which products outside coffee, chocolate and tea are fair trade. A few consumers might actively look up which are fair trade, but most expect the manufacturers to tell them.”

	Good taste: Chocolate brand Divine is the first fair trade product that comes to mind for 3% of consumers surveyed by Lightspeed Research

This bias towards coffee and chocolate also translates into purchases – 36% of people have bought fair trade coffee in the past six months and 34% have chosen to buy fair trade chocolate. By contrast, just 2.5% of people have bought fair trade beauty products, while 6.1% have put fairly traded biscuits or cakes in their shopping baskets.

But getting people to buy at all is still a challenge for fair trade goods. Fifty-six per cent of people say they buy less than 10% of their shopping from fair trade sources, 18% think that between 11% and 20% of their goods are fair trade and 13% only buy fair trade occasionally.

Of those that haven’t bought fair trade goods in the past six months, 50% say the cost of fair trade items puts them off buying. This compares to just 12% of people who say that they are not able to obtain fair trade goods where they shop.

“Consumers are reluctant to spend more than they need to. They do not think about the long-term benefits for the supply chain when they’re worried about the cost. People will shy away from anything too expensive,” warns Risk.

So what makes people buy fair trade? The majority (55%) of respondents claim they like to make sure “the people that make or grow products get a better price for their goods”, while 17% of consumers buy a fair trade product when it is cheaper than others or on offer.

Other reasons for buying fair trade products include superior quality (9%) and ensuring that no slave or child labour is used (18%). And what could be good news for marketers, 9% say they buy because they have heard about fair trade in the media.

Risk says: “People think that if a product is fair trade, then the workers have been better looked after and the result is a better quality item. So I guess fair trade does have a ‘halo’ effect on other perceived qualities.”

Surprisingly, consumers are yet to be cynical about fair trade claims, with 70% believing that trading fairly genuinely benefits growers and producers, with almost one in five agreeing strongly with this. And 50% of respondents have a better opinion of brands that carry the Fairtrade Foundation logo. Only 12% believe that fair trade products are a marketing ploy.

When considering what would make them convert their normal purchases to fair trade items, 54% of people say they would only buy a fair trade version if it was the same price as their existing purchase. And 23% would buy a fair trade product if it was cheaper than their current purchase, while just 18% say they would buy a fair trade version even if it was more expensive.

Even consumers that are prepared to pay more for fair trade products think the premium for fairly traded goods cannot be too high – 51% say that an extra 6-10% is acceptable, with 29% saying they would pay an extra 5%.

So what should those brands such as Cadbury, which announced in the summer that it would make its Dairy Milk brand fair trade, do to ensure they convert consumers to the fair trade cause?

Risk says: “It’s all about balancing your price point with your values. There is a limit to people’s willingness to pay extra. Fair trade products also need to make sure they market themselves effectively so people understand there is more than coffee and chocolate out there. Then make everything really easy to find in the places where consumers are already shopping.”

the frontline

WE ASK MARKETERS ON THE FRONTLINE WHETHER OUR ‘TRENDS’ RESEARCH MATCHES THEIR EXPERIENCE ON THE GROUND

Nicola Pearson Head of marketing, Cafédirect

Nicola Pearson

Head of marketing, Cafédirect

Fair trade hasn’t been around that long and you can’t change buying behaviour until you change what people think. This research picks up on the fact that people are thinking about fair trade, but it has yet to affect everyone’s shopping habits.

More people know about fair trade coffee, tea and chocolate than other categories because the message is easier to understand when it involves a growing process. The more processing a product requires, the further away it moves from that personal story. That requires a bigger marketing job.

I’m pleased to see that fair trade is associated with better quality, according to the research. The Fairtrade Foundation has done a really good job of turning around perceptions from the early days of fair trade, when it was perhaps seen as worse quality. We’ve won awards for our taste and the idea that quality translates into taste is what we want to promote ourselves.

This year, we’ll be trying to move the debate on from traditional areas of fair trade. When fair trade started, it was about getting a minimum wage for the farmers. But now farmers are experiencing the effects of climate change and I think that’s where our marketing will go. We will have a broader agenda.

Cheryl Sloane Marketing director, Fairtrade Foundation

Cheryl Sloane

Marketing director, Fairtrade Foundation

The retailers associated with fair trade in this research don’t come as a surprise. The Co-op ran a campaign about its ethics – “Blowing in the Wind” – during the response time, so it’s encouraging to see that advertising has worked.

I think coffee coming top of the recognised fair trade products is pretty consistent with our own research that shows it is harder for consumers to understand what is fair trade when you’re talking about an ingredient in cosmetics, rather than a whole product.

For the minority that don’t buy fair trade goods, price is probably a barrier. But for those who do buy fair trade, we find their biggest reason for not buying more fair trade products is that they are not available or their favourite brands don’t come with the Fairtrade mark.

It’s interesting to see that this research shows that people are aware that the Fairtrade mark goes beyond a fair price but covers such things as environmental standards and no child labour. We need to make that breadth even more clear in our future communications. It can take companies years to attain Fairtrade status. It’s not easy to put our logo on a brand’s products, and we need to make sure consumers know that.

Charlotte Borger Head of communications at Divine (pictured); and Alastair Menzies, head of sales and marketing

Charlotte Borger

 Head of communications at Divine (pictured); and

Alastair Menzies, head of sales and marketing

The brands that come top of mind for being fair trade suggest this research is very recent and strongly influenced by advertising. It is good to see The Co-op so top of mind as it is truly the retail pioneer in fair trade, having been supporting, stocking and promoting such products for a decade.

We can see the perception that fair trade is more expensive prevails, although it is retailers that determine the price of fair trade products, so essentially it’s retailers that determine how consumers perceive fair trade in terms of price and quality. Retailers are keen to be seen as good supporters of fair trade, so it’s in their interests to ensure their customers have a good choice of fairly traded brands and that they are priced competitively.

Half of people are effectively saying the Fairtrade mark adds additional value to product. Most consumers are not cynical because we think they are well informed by the Fairtrade Foundation and brands like Divine about what is being achieved.

We have just come back from a village in Ghana that has both a palm nut crusher and corn grinder bought with Fairtrade premiums – helping secure important extra income for the community. This is just one example of more than a thousand farming villages in the country that have benefited directly.

Additional Survey Results

• 29% Of consumers would pay an extra 5% for a product carrying the Fairtrade mark
• 10% Of consumers are aware that fair trade flowers are on offer in the UK
• 6% Of consumers wrongly think Fairtrade means that a product is organic