According to a recent online survey of more than 2,000 US consumers and 15,000 consumers globally conducted by GlobalScan for Fairtrade America, 41% of American respondents say they have changed their purchasing choices in the last year to make a difference on economic, social, environmental or political issues, and nearly three-quarters of consumers who have seen the Fairtrade label when shopping feel it is more important than ever to support the certifiers’ effort to build a better economy for all.
As consumer interest in ethically sourced products increases, so too do the business arguments for ethical certifications, such as Fairtrade America, which can help brands command a higher price point at shelf, and increasingly gain prominence at retail both in store and online.
In this episode of FoodNavigator-USA’s Soup-To-Nuts podcast, Fairtrade America's director of marketing Mary Linnell-Simmons shares more details on how the pandemic and social justice issues are reshaping consumer shopping habits, influencing retail buyers and creating new opportunities for products and brands. She also notes that ethical certifications can help protect brands against potential scandals and help them land funding from increasingly ESG-focused investors. Finally, she shares tips for picking a certifier and making the most of the relationship.
Ethical shopping is on the rise
As soon as the pandemic was officially declared in March 2020, it began reshaping how consumer shop and what they bought – and while much of that initial change was outside of anyone’s control, Linnell-Simmons said many people voluntarily shifted their shopping habits in response to the vulnerabilities and social issues magnified by the outbreak
She notes that as consumers looked for products and brands that aligned with their values, 2020 became one of the best years for sales of Fairtrade products across categories.
“The pandemic is changing shopping forever,” with consumers making different choices in part because many products were not available early in the pandemic, and consumers liked the alternatives they selected, she explained.
At the same time, consumer awareness of supply chain vulnerabilities – including the impact on individuals across production – fueled increased interested in Fairtrade products that supported farmers, producers and others who have long been overlooked or at the bottom of the pecking order.
“We see that come out in some of the data points around the issue areas we have identified that consumers care about,” noted Linnell-Simmons. “Some of the top areas that consumers car about and Fairtrade addresses are things like child labor, fair prices for farmers and overall sustainability.”
Certifications offer shoppers a short cut
While more consumers may be interested in shopping according to their values, most don’t have time to research in-depth every product, company or their supply chains – which is why Linnell-Simmons says many are looking for trustworthy, third-party certifications as shopping shortcuts.
“We know that there is a subset of very green-minded consumers who will do this research. They will spend hours trying to find exactly the right brand of coffee to choose or the right chocolate bar that really does regenerative agriculture well or something like that. But, they’re in the minority,” Linnell-Simmons said.
Rather, an increasing percentage of consumers are using third-party certifications to identify products that share their values.
Based on Fairtrade America’s recent research, awareness of the group’s trademark rose to 41% in the US and 67% globally in the last year, and trust levels are hovering just under 60% in the US, which is an increase from the group’s previous study in 2019 when awareness was under 30% and trust was in the 40 percentiles.
Retailers increasingly want to stock ethically certified products
Linnell-Simmons also notes that retailers increasingly are relying on and asking for brands to add third-party certifications so that they can more easily and clearly meet evolving shopper demand.
In addition, Fairtrade America is working with Amazon’s climate-friendly pledge badge, which uses third-party certifications to clearly identify more environmentally responsible choices for consumers.
“We are the only listed fair trade certification on their criteria, even though there are quite a few fair trade certifications out there they could choose from,” which means products that work with Fairtrade America are identified as climate pledge friendly and appear higher in searches when this filter is selected, Linnell-Simmons explained.
Fairtrade America certification commands premium pricing
In addition to helping brands secure shelf space, third-party value-based certifications, like Fairtrade, can help brands command premium pricing at shelf and, if they are fundraising, connect with potential investors.
“Many brands who get certified Fairtrade can sell their products for more money. We did a price tolerance assessment in three categories as part of our 2021 Globalscan research and we found that coffee consumers are willing to pay 35% more per pound, for chocolate…they are willing to pay 30% more for Fairtrade chocolate and for a pound of bananas they are willing to pay 43% more,” Linnell-Simmons said.
Ethical certifications also increasingly help emerging brands secure capital as investors are looking for partners with strong ESG criteria.
Finally, an often overlooked benefit of ethical certifications is they can reduce the risk that a company will suffer blowback from the misdeeds of others in their supply chain, Linnell-Simmons said.
“The pandemic exposed a lot of risk in supply chains,” and if a player up the supply chain has unethical business practices it can negatively impact everyone who works with them, she explained.
Best way to leverage story telling
Companies that opt for ethical certifications can make the most of them by displaying them on packaging along with short stories about the stakeholders in their supply chain that they are helping. Linnell-Simmons adds that displaying the Fairtrade certified logo on pack can help consumers perceive the product as more favorable and increase the likelihood they will recommend it to others.
“Being able to tell the story of your product is very, very important,” and we found in previous research that most consumers learn about Fairtrade from products at the point of sale, Linnell-Simmons said. “So, it’s not necessarily reading a blog on the Internet or seeing a post on Instagram,” but rather the packaging itself or a shelf-tag or other communication in the store.
She adds that on-pack certification designations can help create a favorable preference and even prompt referrals by consumers to other shoppers.
How to work with Fairtrade America
When deciding whether to invest in an ethical certification, Linnell-Simmons says companies should consider who they want to partner with, and what type of services they are looking for or support they need across their supply chains, because not all certifiers offer the same benefits.
If a company decides to work with Fairtrade America, Linnell-Simmons says it is easy to get started by reaching out to the organization, which will respond with a “real person,” and walk companies through an assessment to identify if certification is possible and if so, what if any changes need to happen.
Linnell-Simmons also notes that company’s are not required to certify their entire portfolio – they can choose one or two products to certify, which allows them to manage their investment and better understand what the process entails.
Those who are interested in learning more about Fairtrade America, what certification entails and how it can help their business can do so at https://www.fairtradeamerica.org/.