The Foundation, which pays farmers and their workers in developing countries at least market prices for their produce, said today that sales rose from £836m in 2009 to £1.17bn in 2010. Chocolate was the big hit: it sold an extra 2.3 million Fairtrade chocolate bars, making an estimated £342m as big-name brands like Nestlé and Cadbury launched their own Fairtrade lines (even drinking chocolate sales trebled, presumably something to do with the cold weather...). And a tie-up with Sainsbury's proved lucrative: the supermarket shifted £276m worth of its 800-odd ethical products last quarter, making it the biggest Fairtrade retailer in the world.
Given that the majority of Fairtrade products are more expensive than their less ethical counterparts, optimists might see this as a sign that British consumers are feeling a bit more confident again. But it might just be that they’re seen as a relatively cheap (and trendy) way to signal one’s sympathy towards social responsibility issues. And the backing of big retailers clearly helps: Sainsbury's is aiming for £500m in Fairtrade sales, while Aldi, TopShop and M&S are all jumping on the bandwagon.
Not everyone’s convinced by the Fairtrade movement. The Institute for Economic Affairs recently published a report suggesting it was 'costly, opaque and largely unproven' – and that, because of their sheer scale, the likes of Starbucks, Nestlé and Kraft have actually done far more for coffee farmers than the foundation. Apparently, its refusal to accept child labour or genetically modified crops, and 'indulging western whims' like insisting on organic produce, is slowing business development. Hmm.
As for the confidence point, what should we make of Primark’s revelation today that it has seen 'a noticeable slowing down of UK consumer demand' (albeit that just means sales are growing slightly less quickly than before, so it’s hardly disastrous). Primark has had a great downturn; does this slowdown means people are opting for more expensive brands, or that we can’t even afford £5 jeans any more? Who knows – but either way it’s bad news for Primark, which is bracing itself for a margin squeeze this year as cotton prices soar. Time for a Fairtrade range?