MARKET REPORT - JAN. 29TH, 2016

So, to be fair……………….The face and nature of Fair Trade continues to change.  Change is good, it causes discussion, creates a platform for engagement; both of which create more knowledge.  Your customers are shopping at your business because they are engaged - they are willing to spend more for organic, and a large percentage of them knowingly reach for Fair Trade.  And for both, they rely on you, as a retailer, to be their filter - they are entrusting that your buying decisions represent their values and ethics.  Well, that's important, and it requires that you are not just one page ahead of them, but have a clear understanding of the changing face of Fair Trade, just as those of you who have been knee deep in the muck of organics need to be on the ball as we watch this industry grow, and change, and be ridiculed and questioned and proven right. As I've said many a time, you don't get a bad book review if you don't write a book.  The conventional industry doesn't hold bragging rights on how much insecticide is used, so no one calls them out - no claim, no pain!  But you, on the other hand, every day, are making a claim that your organic selection represents a healthier, safer, planet-friendly purchasing opportunity, and claims create an opportunity for criticism.  Fair Trade is no different.  Yes, even this noble business model gets trashed in the media once in awhile as well.Fair Trade is a pretty simple idea.  Doesn't it make sense to pay the people who grow our food, and their families and workers a living wage?  And to support social programs in their towns and villages geared toward dental care, eye surgery, literacy and education?   You would think that's a no-brainer, but the world of commerce has not evolved to this place yet, especially in the fruit and vegetable business, where small farmers in the Global South are taken advantage so often, if not nearly all the time, and where they have so few resources to challenge the status quo.Fair Trade started as an outreach of several faith-based organizations - buying handicrafts, fabric and artisanal products and selling them in church basements - paying individual artists far more than they had ever been paid before in honest, cash up front business dealings - you've likely heard of Ten Thousand Villages - go there and look if there’s a store near you - this was the beginning, it's beautiful in its simplicity, and the model hasn't changed.  The movement spread quickly to commodities - coffee, cacao, cotton, bananas etc., as did the certification organizations in Europe who could verify that the business dealings were honest and fair at both ends of the deal.  Those would be FLO, IMO, and Eco-cert - independent certifiers who also believed in the principles of trading fairly.Another very basic concept of Fair Trade was ‘direct trade.’  That boiled down to distributors (like us) in Europe or N. America buying directly from small producers – eliminating as many of the hands stretched out to take a cut of the pie, be they brokers or distributors or exporters, because only then could we offer Fair Trade products at competitive prices.  But now, in this growing industry, producers often sell through a maquilla (intermediary) in the country of origin, who is then selling to an allied importer, then to distributors – adding 2 hands to stick their forks into the pie.  We are so lucky to have strong relationships, and virtually all our Fair Trade product is bought and sold directly from producers, or their own internally owned sales offices.The rapid growth of Fair Trade continues to be exponential, across hundreds of commodities from where we were, as a social movement, 10 or 15 years ago - and change has happened, and there has been discussion, and there is more knowledge, but there is also far more controversy.Get real, should Fair Trade be (officially) an elite class of products that has to be bought directly by an importer into their own country, purchased from small producers who need an edge against plantations?  That paraphrased statement was from a recent media bash of how fair trade producers were creating a disadvantage for their dis-enfranchised fellow farmers, who didn't make the cut (or hadn't yet.)   That is one of the questions though - and it was answered a few years ago when Fair Trade USA permanently changed the perception of Fair Trade.  A different mantra - "Fair Trade for all" was born.  That included certifying, on behalf of multinationals (with sales in the billions of dollars annually,) single products from single countries, making up, say 1% of their total selection, but allowing them to hold their heads high. How do we react to that?Wouldn't your consumers be happier knowing that the farmer whose tomatoes they are buying, no matter how large or small a farm, even if a corporation, has signed on to a certification that has some worker rights guarantees, including gender equity and strict rules around, say child labour, or worker safety?  Fair Trade USA brought us corporate Fair Trade, and we are stuck with it, but is it a bad thing?  That's a question for you!But, and this is the big but, is this what we could call Fair Trade light?  This could be a company with thousands of employees, and not a small cooperative; and isn't a large corporate farm going to have economic advantages over small producers?   And if a large coffee plantation signs on to a Fair Trade certification program, and competes with small producer coops in the same region, isn't that counter-intuitive to the whole purpose of Fair Trade?Several large corporate farms in Mexico (although privately held family operations) have been certified by Fair Trade USA in the last few years - these are farms employing sometimes thousands of seasonal workers.   Some of these farms were already 'do-gooders' long before certification became an option, and it's wonderful that thousands and thousands of migrant workers from much farther south in Mexico are protected by certification standards that guarantee them gender equity, fair wages, health care etc. We visited Wholesum in 2009 and pleaded with owner Theojary Crisantes, to enter a Fair Trade program, because they were doing awesome work.  Divine Flavor was certified years ago by FLO for sales of Fair Trade grapes to Europe, because Alan Aguirre, the CEO, wanted to showcase his farm operation as a best practice model (which it is.)  Same story with Rico Farm – we are friends with Francisco Tepia and knew he was doing great work in his community and with his crews, and felt he should be recognized for what he was doing already.For a large farm like these, they don't need the protections surrounding pricing and competition afforded small producers, Fair Trade for these farms boils down to workers - their pay, their treatment, food and accommodation.  And none of these farms are competing with smaller cooperatives – there aren’t any in those regions producing the same crops.As a side note – add this to the equation – for large farms in Northern Mexico, labelling is done at their sheds in Sonora or Sinaloa.  But not every customer of Del Cabo or Divine Flavor has signed onto the ideals of Fair Trade nor wants to pay a 15% upcharge for social premiums.  So they have two options – have it all labelled at their sheds with Fair Trade logos and eat the 15% when the customer doesn’t want Fair Trade when buying from their warehouse at the border, or try to figure out how much they are going to sell as Fair Trade before the cherry tomatoes hit the packing line and labelling machine.  Of course, they would love it if everyone would pay the extra, but they are growing commodities in a very tight price game.  Do you find it confusing when Del Cabo cherry tomatoes are listed as Fair Trade one week and not the next?  As some of these companies move into their second year of certification, they are getting a handle on the demand for Fair Trade, and it now much less of an issue.So, here's another question - if a Mexican worker, on a Mexican farm in San Luis, Sonora has some protections afforded by the certification of the farm he is working on, why isn't his sister, who walks across the border every day to work on a farm in Yuma, Arizona, literally a few miles away, able to get the same treatment - because she has no job protection or health benefits working for an American ranch - and if so that would be rare.   Well, Fair Trade USA has answered that question, carrying forward on its global plan of Fair Trade for all, now certifying Fair Trade farm operations right in the US.  Even one large greenhouse here in the Fraser Valley certified over a year ago carries the Fair Trade USA logo on their conventional peppers.  So where do we draw the line?  Or do we?   Will certifying operations anywhere, any country, change the character of Fair Trade?  Will consumers understand?A few years ago, we (Discovery) applied to join the World Fair Trade Federation - a global advocacy group.  We failed, because 100% of our products weren't Fair Trade certified.  Well, duh, how are we going to get a local apple producer certified, and why would we?  If we were totally hard core, we could say that Fair Trade is for the Global South, for hundreds of millions of small producers of mangos and pineapple and cotton and tea and spices - people who live in impoverished nations and, if nothing else, need a leg up.  Period.  Wouldn't certifying in rich nations denigrate from the mission of the Fair Trade movement?  What do you think?But, more germane, because 100% of our year-round selection isn't certified Fair Trade, how do we express that we actually do play ball pretty fairly with all our vendors, whether it’s a mango coop in Peru, a local vegetable farm or a large US importer.  Or is that important?  Well, we try, but that's not the point - every large company wants to be portrayed in the market as being fair, if not downright great, from global supermarket chains to multinational mining companies - all of whom use their donations, charity support and corporate social responsibility budgets as proof that they are more than just miners or retailers.  Don't we all do that?Doesn't your business donate to local charities, give food donations to special events, sponsor an ice skating team, and host nutrition classes?  Of course - and we all portray ourselves as being inherently good corporate citizens in our own communities.  So what about fair-washing, where companies portray themselves as 'fair traders' through effective marketing, even if only a portion of their products are actually certified?   Don't multi-nationals in our corner of the global exchange of food want to look 'fair'?  Doesn't having a fair trade logo on one or even a couple of their huge array of products imply that?  Should companies with billion dollar sales dare sport a Fair Trade logo which may only represent a tiny fraction of their business?  For you and your consumers, does this say something about them?  Are they promoting themselves un-ethically, or is the message that they are great companies, and are working through their commodities, one by one, to hit a much higher performance standard across their entire supply chair with 100% Fair Trade being the eventual goal?Many large grocers, globally, have tried to make things simple for their consumers, and have created their own Fair Trade brand.  In doing so, (of course there is no regulation,) they have also created their own standard - their marketing departments have decided what Fair Trade is and represents, haven't they?  Luckily, that's not the case, at least not in North America, where many companies, from coffee roasters to multi-store retail chains have decided to private brand their Fair Trade products, which has the appeal of wider recognition, (instead of a plethora of logos from scores of competing certifiers on packaging and signage) - but they are also the first to demonstrate that any product carrying their in-house brand is also third party certified by a credible certifier.  I'm not aware of any retailer that can't back up their own marketing program with certifications from FLO or other credible certifiers, but the day will come when abuse will rear its ugly head - it already happened at one supermarket chain in Europe.  There's good potential – and you of all people are certainly aware of the potential for abuse.  Just look at the misuse and lack of understanding around the definition of your favorite word – “natural.”We already have a few interesting examples in the fruit and vegetable business on the import side.  One is a company that had the somewhat either illusionary or ignorant idea of naming their company so it looked and sounded like Fair Trade.  We worked closely with them for a few years, starting back in 2008, and the mission was solid, and everything sold was Fair Trade, just like the name sounded, but things changed, including ownership, and today everything they sell, organic or conventional, Fair Trade or not carries that brand, but the implication is certainly there.   Another Fair Trade importer in the U.S., with a great initial vision, was also a co-conspirator of ours for several years.  Because of their wide range of products and certifiers, they daringly chose to instead promote their own brand and statement to create a cohesive marketing platform.  Much of their selection is certified by a well-respected Fair Trade certifier. But not all, and here’s the rub –they have even gone so far as to work up their own internal Fair Trade standards in order to quantify their product lines that aren’t officially certified.   But surprising it was for us to order broccoli from a long-time farm vendor in California last week, and have it arrive in boxes private-labelled for this company with a very profound statement implying it was Fair Trade.We have our own filters.  We can’t say, “Oh, we don’t carry that brand, or buy from that farm, or list that product as fair trade” and actually name the names.  The only way we can demonstrate our filtering system is by not listing producers as Fair Trade, even though they might be certified, because we haven’t done a scratch and sniff test.  In the same way we don’t buy or list organic produce from companies who we know, (on the ground while talking to producers,) are ripping growers off in the Global South.That’s our rule.  Doesn’t have to be yours, and if you receive product from us, or anyone else, that sports a Fair Trade logo, then that’s all you need to know – just like organics, it passes muster from a certifier.  It could have likely come from us – all we can do is not list or invoice it as Fair Trade until we have witnessed the operation first hand and are convinced they match the same Fair Trade values as we do.So I asked a lot of questions, and I would really like to have a discussion either with you, or as a group forum, as caring retailers, about all the questions I’ve raised.   You are more than welcome to contact me anytime.  ThanksRandy: discoveryorganics@gmail.com