With a clear conscience through the supermarket – fair trade has grown significantly in recent years. However, high prices are putting customers’ beliefs to the test.
Cocoa, coffee, bananas – supermarket customers are finding fair trade seals on more and more products. Spend a little more so that small farmers in the southern hemisphere, for example, have a better income – this idea convinces a small but growing proportion of buyers. In its annual balance sheet this Wednesday, the industry is expected to present a significant increase in sales again after a corona damper. But the outlook for the coming months is difficult.
What does fair trade mean?
Trade grants long-term prices at which producers can cover their costs and invest. Small farmers often join together to form cooperatives and sell their produce at guaranteed prices. Fair trade goods are therefore often more expensive than the rest of the range in the supermarket. The price often also includes a social bonus, which can be used to build schools, for example.
“A living income is a human right,” emphasizes the Forum Fairer Handel. However, nobody in the industry claims that buying a pound of coffee will solve all the problems of smallholders.
In the beginning, fair goods were only available in world shops or action groups. Supermarkets and discounters have been driving growth for several years. There are several seals. However, fair goods remain a niche product with a retail turnover of around two billion euros. That’s how far the organic segment was in 2000, today sales there are eight times as high.
What is bought?
Coffee and tropical fruits in particular are often sold with fair trade seals. Textiles and flowers are also among the major revenue generators. According to the Forum Fairer Handel, a good six out of every 100 cups of coffee drunk in Germany are fair trade. The fact that fair is always more expensive than conventional is a myth for the Fairtrade seal provider. On the supermarket shelf there is often hardly any difference to other branded products.
How stable is the trend?
For years things only went up until cafés, canteens and world shops closed temporarily during the Corona crisis. In 2021, sales were down three percent on the previous year for the first time, reaching only 1.8 billion euros. The industry association is now reporting: “The downturn caused by the pandemic has been overcome.” This is shown, for example, by the annual balance sheet of Fairtrade. By far the largest seal provider was able to increase its sales by nine percent to 2.1 billion euros in 2021. The industry pioneer, the church-related trading house Gepa, also recorded a significant increase.
Will inflation end the boom?
So far this is not evident. “We are not very concerned that we will come under the price wheels,” said Fairtrade CEO Dieter Overath recently. “Fortunately, we have customers who buy out of conviction.” However, a decline in sales could not be ruled out.
In the case of organic branded products, it was already noticeable in the spring that buyers were tightening their belts. It is still unclear whether this will also be the case with fair goods. This financial year is difficult to forecast, according to Gepa.
In any case, the industry association indicated that high inflation could be a problem. It is also a question of fairness that rising sales prices are not at the expense of low-income consumers.