Ben & Jerry's sees profit in fair trade ice-cream

- Last updated on GMT

Ben & Jerry's last week claimed to be the first ice-cream maker
in the US to produce an ice-cream made with fair-trade coffee,
suggesting that ethically traded commodities can be good for
business as well as beneficial for the struggling farmers,
reports Philippa Nuttall.

The company - a subsidairy of Unilever - announced that it would henceforth offer consumers three choices made from the fair trade coffee extract in the guise of Coffee Heath Bar Crunch, Coffee Coffee Buzz Buzz Buzz and Coffee.

"By transitioning all of our coffee extract to fair trade, Ben & Jerry's hopes to help increase incomes for coffee producers,"​ said Yola Carlough, head of social mission for Ben & Jerry's. "Displaying the fair trade logo on our pints will hopefully help raise awareness among consumers about how their buying decisions can support positive change."

Paul Rice, founder and CEO of TransFair USA​, the organization that certifies fair trade ingredients added: "Ben & Jerry's commitment to using fair trade ingredients is both good news for struggling farmers and their families and a message to the food industry that fair trade is good for business"​.

"Consumers care about quality. Increasingly, they also care about where their food comes from and how the farmers who grew it were treated."

The number of US companies using fair trade ingredients remains fairly limited despite recent increases in uptake. P&G told earlier this month that seven months after the launch of its fair trade coffees, it would only extend its range if there were enough consumer interest to warrant such a move.

Tonia Elrod in P&G's external relations department said: "We launched the [fair trade] Signature collection for a variety of reasons including that consumers were increasingly interested in sustainable coffee products"​.

However, Elrod said that inital consumer research by P&G showed that there wasn't enough interest from consumers to launch the fair trade coffee directly in retail stores.

"So we launched the product online and built awareness and consumer interest,"​ she said.

She wouldn't reveal sales figures - "we don't do that for any of our brands"​ and refused to be drawn on whether the company planned to launch any other fair trade products, saying "the consumer will decide if we launch any more fair trade or Rainforest Alliance products"​.

Simon Billenness, senior policy adviser for corporate engagement for Oxfam America, worked with P&G on the introduction of their fair trade coffee.

He would like companies using fair trade coffee to disclose how much they are selling, as Starbucks does, announcing for all to see how many pounds of the ingredient it has sold. This figure has doubled each year, according to Billenness.

"Starbucks aims over the next year to sell 10 million pounds of fair trade coffee,"​ he said.

Billenness believes that the fair trade scheme is the best one for companies who seriously want to help the coffee farmers because they have to be a member of a cooperative to join the scheme and the farmers then decide how the extra money is spent rather than the manager of a plantation, for example, deciding.

Coffee generally costs around $1.26 a pound, increasing to $1.41 a pound for organic beans, to which a fair trade premium is addded.

Fair trade coffee is often high quality coffee and therfore no more expensive than other speciality coffees, though obviously higher priced than bog-standard Kenco, for example.

Elrod said regarding costs at P&G that two years ago "fair trade coffee was significantly more than coffee sold on the NY "C" - almost double, but this year, the NY "C" is almost the same price as fair trade"​.

"Fair trade coffee makes sense from a business standpoint. I think there will be a gradual blending of speciality and fair trade meaning that by definition speciality will be fair trade,"​ concluded Billenness.

Transfair reported last November that the last two years had seen a significant increase in businesses using fair trade coffee. Indeed the $100 million fair trade coffee market is the fastest-growing sector of the coffee industry, according to trade reports. However, these figures remain tiny compared to the mainstream market.

In total 69 new fair trade products, including a large number of fair trade coffees, were introduced over the past two years in the US and Canada. This is most definitely an increase on the last couple of years - just 15 products were launched in 2002 and only six in 2001, according to Productscan Online - but in terms of the market as a whole, these products are a mere drop in the ocean.

Fair trade, which guarantees $1.21 a pound plus 5 cents for social projects, is doubling in size every two years, though at present its share of the worldwide market is just 0.4 percent.

More than 100 million families are estimated to depend on coffee, and since prices began falling precipitously in 1998, the earnings of the 50-plus producer countries in Africa, Asia and Latin America have halved from $10 billion a year to $5.5 billion, according to the International Coffee Organisation.

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