Do you buy Fair Trade Products?

fair trade, stanford university

What percentage of consumers are happy to pay a higher price for Fair Trade products? Watch a short video with Jens Haninmueller, Associate Professor of Political Economy at Stanford who has researched the subject: 

Are consumers actually seeking out Fair Trade products? The Stanford  researchers  found that sales in US grocery stores increased by 10% when a product had the Fair Trade certified label on it. Even when the price was raised on the product sales continued to grow. But it was only true for one type of fair trade certified coffee tested.

For the less expensive coffee sales actually decreased dramatically. The researchers hence believe there are two segments in the market. Consumers who are willing to pay more for products with Fair Trade certification and as many that are not willing to pay more. About an equal split.

Have on and off been buying Fair Trade products all over the world. When I lived in the Middle East I used to buy from Marks & Spencers’ Fair Trade products.

Fair Trade is a certified label that no product can use unless it’s certified in accordance with Fair Trade standards. Companies have to apply and once accepted can use the label on their product. So far it benefits 1,4 million farmers and workers in approximately 70 countries.

Different from organic products

Fair Trade certified products should not be confused with organic products. The difference is that Fair Trade products are checked and hence live up to the expected standards. But unfortunately there are organic products on the market that are not organic at all. Just more expensive.

Are you looking into ethically differentiating your product?

There is a business case for differentiating yourself from your competition by becoming a Fair Trade product or brand. There are consumers who are willing to reward you. That segment of consumers will also punish you if you don’t and you will be perceived as a company left behind.  If your competitors have upgraded ethically you take a huge risk if you don’t. So it may be necessary to start contemplating how your product could be produced in ways that are more friendly to the environment. It can be done through CSR and sustainability which is becoming more and more important to consumers all around the world.

Do you buy Fair Trade products? If so, why? If not, why? Is it important to you that products you buy are ethically produced? Do you support companies that are into CSR and sustainability by buying their products? Would you like to see more Fair Trade products on the market? Are we heading for a future where companies have to comply to Fair trade standards and CSR and sustainability or be punished by consumers?

VIdeo: Stanford Graduate School of Business – Photo: Lily lilivanili

48 thoughts on “Do you buy Fair Trade Products?

  1. Catarina — I have to say that I don't look for the "Fair Trade" label. It's probably on some foods I buy but it's just not on my radar. I do buy organic products but there is a distinction that is required by the US government for the labels on these products:
    — 100 Percent Organic: All the ingredients are certified organic.
    — Organic: At least 95% of the ingredients are certified organic.
    — Made With Organic Ingredients: At least 70% of the ingredients are certified organic.
    From now on, I will look for the "Fair Trade" label.

  2. To be honest, I haven't really paid much attention to Fair Trade products but after learning more about it in this post, I think it is something that I will definitely look into more.

  3. I'm very fortunate to live near a few store who practice offering fair trade products. The products are a bit more expensive but the quality is outstanding, especially in food stuffs. I find using them in recipes rewarding in two ways; using them and the outstanding taste they impart.

  4. Occasionally I have bought fair trade coffee and hot chocolate. Admittedly this was because they were on sale only costing a little more than my usual brand.

  5. To be totally honest I have not thought about this very much. After reading your article it is time for me to begin. Thanks for sharing this about Free Trade products. I would be willing to pay more for them just on principle.

  6. Fair trade is assured by competition and not by labels. Unfortunately, with the supper markets and the rush one has no choice but to trust unless it is proved otherwise.

    1. Thank you for stopping by and giving us your thoughts, Adel. Have you ever been to a WTO meeting? If you have you will know that trade is rigged in favour of the United States and Europe. Amr Moussa and I discussed that extensively. It's essential to enable farmers in the developing world to compete with subsidized European and US farmers. If not, how will for instance Africa be able to trade itself out of poverty?

  7. Approx. 30% of our groceries are Fair Trade/ organic, another 30% was grown nearby. That's probably the ratio. Still some choices I make based on flavor only (cherry tomatoes over locally grown tasteless ones, etc.) Since we have the choice, we may as well choose more ethical and less consuming for the environment.

  8. Great post! I usually shop for organic products because it is more easily found. Unfortunately where I live there isn’t a large amount of fair trade products. On that note, if I have more options on Fair trade products, I would choose them over other products definitely.

  9. I have to admit I don’t go looking specifically for fair trade products, but when I’m presented with the choice I feel good about paying more for fair trade. It seems like the more responsible long range thing to do.

  10. I look for fair trade myself ( easier in England then Qatar for me), in Qatar it is a lot harder because I guess the country hasn’t developed as much in regards to produce and is starting to do so now, so you see organic and fair trade coming up in the market. In my opinion sustainability is also an important factor as the environment and people working are equally as important as the product.
    Love, Husnaa xx

  11. Catarina — I admit that I haven't looked for Fair Trade labels and frankly wasn't aware that products carry them. I will in the future and I would definitely be willing to pay more for these products. PNC Bank, the 5th largest bank in the U.S., is committed to sustainability in all its new branches and in its new headquarters, the tallest, most sustainable building in the world. People want to patronize companies that are committed to sustainability. Notre Dame did a study of PNC and the results showed that the bank's newer sustainable branches outperformed its older branches. I think this is a growing trend.
    My recent post Maybe Social Media Isn’t the Way to Promote Your Business

    1. Interesting example of a sustainable bank, Jeannette. Presumably they don't do anything unethical?:-) Not surprised you, like me, are prepared to pay more for Fair Trade products.

  12. When we lived in England, we looked first for Organic and then for Fair Trade, and would pick Fair Trade products over non-Fair Trade ones if both were organic, happily paying a bit more for this. I don't believe we've seen Fair Trade labelling now we're back in South Africa.

    We will always try to buy products that best serve the local communities that produce them and Fair Trade labelling is a good way to do this.

  13. The product that I most often see labelled as fair trade is coffee. I don't actively seek out fair trade products but when I have a choice between a fair trade option and one that isn't I will buy the former even if it costs more. Generally I think there is a growing interest in sustainability and that marketing in that way will pay off.

  14. I am certainly a supporter of Fair Trade products. When it comes to paying more, it depends how much more expensive the items are, but in most cases, I definitely believe it’s worth it. In the state of California, where I live, there is a certification as well, for organic farmers.

    1. Glad you do, Michele. Does the certification you have in California for organic farmers work? In many Western European countries they don't and you end up just paying more money.

  15. Yes, I do look for the "Fair Trade" label because I trust those products to do what they've been touted for. I hope that we are moving toward people demanding Fair Trade standards but until poverty is reduced many people can't even think about things like that. All they think about is how to survive this week, this day, this hour.

    1. Glad you agree with me, Beth. But Fair Trade products are definitely becoming increasingly important to affluent consumers. Have a feeling we have had Fair Trade products much longer in Europe than you have in the US. Used to buy them in London, UK. more than 12 years ago.

  16. My favorite restaurant to buy an Iced Latte has fair trade coffee. I will say the latte is about $1.50 more expensive than what you get at Starbucks, but I’m at the point in my life where I am very mindful of what I consume. For that reason, it is worth it. It makes sense to me why a product that is lower on the price spectrum might not do as well with a price increase for fair trade. The segment of the population that is fighting to financially stay afloat is going to have less wiggle room in their budget to pay extra, even if they ethically approve. Having said that, there is a segment of the population who has the ability to pay extra, and I think the number of people who want to has grown in recent years.

    1. Glad you pay extra for Fair Trade Ided Lattes, Erica. Agree with you completely that it's the more affluent segment of the population that are interested, and feel they can afford to, pay extra for Fair Trade products. However, in the future I'm certain Fair Trade will become a must. Just a question how long it takes.

  17. I was interested to read that Fair Trade Products have to be certified with Fair Trade standards. I did a post quite some time ago that supported your statement that the organic label doesn’t mean a whole lot. Different countries set different standards with none of them really being enforced. Would I pay more for Fair Trade? I would now that I know there are standards that have to be met. Before I would have lumped the Fair Trade label in with the organic label- not something to rely on. Thanks for the education.

  18. About 6 weeks ago I started noticing more fair trade chocolates and coffees showing up in more than one of our local grocery stores. I decided to try super dark chocolate. While I cannot say I tasted any difference better or worst, I personally felt better believing that something I buy fairly regularly will contribute to a greater good. In the same time period I also found sustainably grown veggies! These gave me a double please as I read the packaging to learn my buying it would contribute to environmentally-friendly practices and workers who get paid fairly. Well at least that IS my hope in how I contribute by these purchases. In both products – chocolate and veggies – the price was less than 10% higher of what I normally buy.
    My recent post A Metaphor as a Secret Ingredient for Introverts

    1. Glad you do; Patricia. Am getting the feeling that Fair Trade labelled products have existed longer in Europe. We have had them for well over 10 years. Bought some when I lived in London and also in the Middle East but in European shops.

  19. I agree that it pays for producers to look into ethically differentiating their products as I think consumers are becoming more aware of fair trade products and wish to purchase them, even at a higher cost. Great issue Catarina…I'm not so sure that a majority of consumers are aware of fair trade products and do often confuse the term with organically grown.

    1. Am also convinced of that, Jacqueline. It's even important to Chinese customers. In Europe I have a feeling there is a huge segment of female customers that are willing to pay much more for Fair Trade and ethically produced products. They pay for organic products as well, but unfortunately they sometimes get conned there:-)

  20. l look for the "Fair Trade" products. I would prefer to pay a higher price than support the products that are not the "Fair Trade" products. I am very selective on the suppliers I choose to advertise their products for my business. I like the to support companies that offer a higher standard. I am pushing products that are CPSIA compliant, which is a commitment to product safety. They also get have a QCA Certification from the Quality Certification Alliance (QCA). QCA is the promotional product industry’s only independent non-profit organization dedicated to helping suppliers provide safe and compliant products.

    My recent post What is the magic of Branding?

        1. OK. Asked because I used to buy Fair Trade t-shirts at Marks & Spencers a long time ago. So if you have t-shirts companies can order with their logo, or some text on, it should be possible to get Fair Trade t-shirts. Mind you I'm today starting to think this is a trend that's been going on much longer in Europe.

  21. I absolutely do look for the "Fair Trade" label when purchasing products. In fact, the community I live by–Gimli, Manitoba, Canada–is a certified Fair Trade Community and proudly offers a wide range of free trade products in consideration of its small size. I have learned from cocoa producers that looking for the words "Sustainably Grown" is even more important than Fair Trade, as that means that the workers AND the environment are being equally cared for in respect to their operation.
    My recent post my 10 catalysts of gratitude

    1. Glad you do, Doreen. What a wonderful example of a Fair Trade community. The only problem with products that are sustainbly grown/organic is that some of them are not even if they claim to be. That's why having the Fair Trade label is a good idea.

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