Q&A: Fair Trade USA addresses opportunities in beverage
Fair Trade USA has been an important partner to retailers, private brands and consumer brands in sustainable production since 1998. The organization’s roots are in the coffee space, when Paul Rice, the eventual founder of the organization, spent 11 years in Nicaragua working with coffee farmers to sell coffee on fair trade terms. Over that span, he ended up working with more than 3,000 families, enabling coffee farmers to invest in homes, electricity and running water through fair trade practices. He returned to the United States and launched Fair Trade USA.
The organization has expanded into areas beyond coffee since then, including a first program within dairy. Molly Renaldo, who worked directly on this program, is sitting on the dairy panel at the Store Brands Industry Forum on Beverages on Sept. 29.
Renaldo works alongside Abby Ayers, head of retail and factory partnerships, Fair Trade USA, who sat down with Store Brands ahead of the forum on beverages to discuss trends in coffee, dairy and private brand beverages as the industry looks to become leaders in sourcing.
To register and attend the Store Brands Industry Forum on Beverages, visit here, and join attendees networking during 10-minute breaks and getting together around four, 30-minute virtual panels dedicated to beverages.
Ayers told Store Brands that the success the company has had in coffee inspired work across apparel, home goods, fisheries and more. Here’s more of an edited conversation with Store Brands looking at the beverage category:
Store Brands: Since the organization is founded in coffee, what’s new in the area?
Abby Ayers: We’re proud to see so much growth recently in private label and roasters converting or expanding their fair trade lineups.With 48% of new coffee launches making a sustainability claim, it has never been more important for retailers and brands to demonstrate ethics to shoppers. Furthermore, at-home coffee brewing is cemented as a habit for U.S. coffee drinkers. This demand for authenticity, combined with innovation in packaged coffee has led to an uptick in Fair Trade Certification, an ethical label that more than 63% of U.S. consumers recognize and trust.
Store Brands: It sounds like private brands are driving this trend?
AA: The growth comes from major retailers and businesses offering private label coffee, demonstrating that responsibly sourced coffee can be both scalable for businesses and accessible to consumers. Many of them align their goals in the Sustainable Coffee Changes with fair trade, which is a testament to the holistic nature of our certification in helping companies meet ESG goals and deliver impact to farmers/producers.
These are a few noteworthy highlights:
- As part of Target’s commitment to the challenge and building on its success with Fair Trade USA Certified Good & Gather coffee in bags and single-cup-pods, the retailer will launch Fair Trade Certified aluminum espresso capsules. By 2022, 100% of Target’s Good & Gather coffee in bags and pods will be certified sustainable according to the Fair Trade USA standard or an equivalent.
- Aldi committed to increasing its share of certified coffee products to over 50% by 2025 to support its growing communities and protect biodiversity. Right now, the retailer offers more than 40 coffee products that are certified as sustainable by third-party organizations, including Fair Trade USA. Aldi will take this commitment all the way, certifying all of its private label Barissimo and Simply Nature coffees by the end of 2022.
- Sam’s Club’s Member’s Mark is the largest single Fair Trade Certified coffee brand in the world by impact. They have sent back over $3.7 million in premiums back to coffee farmers in Colombia alone.
- Rounding out the commitments from large retailers, Kroger will uphold its commitment to sourcing 100% Fair Trade Certified coffee for its Private Selection brand from international growing regions by the second quarter of 2022. The company will also add new pods and bags into its product lineup.
Companies made major strides in transparency beyond the Sustainable Coffee Challenge as well. CVS became the first-ever drugstore to carry 100% Fair Trade Certified products in its exclusive store brand. Gold Emblem, the retailer’s exclusive grocery brand, now offers nine Fair Trade Certified coffee products in a variety of blends and roasts. They have spent the last six months celebrating this with customers in store with signage, promotions and even shippers.
SB: I know Molly will address this more during the Store Brands Industry Forum on Beverages but briefly describe the new program with Chobani.
AA: Fair Trade USA and Chobani have launched a groundbreaking certification program for U.S. dairy farms and cooperatives that provides financial premiums to dairy farmers and workers, which will help protect and empower them while raising sustainability standards.
The announcement is an outgrowth of Fair Trade USA’s partnership with Chobani, which announced its Milk Matters program in 2019 to further its commitment to support economic, environmental and social standards throughout the company’s milk supply chain. The fair trade certification program is available to milk producers throughout the U.S.
Fair Trade Certification provides farm owners and cooperatives with an opportunity to differentiate, increase engagement with consumers and receive a financial premium for their investments. Certification also provides greater support for farm workers in an industry that can face challenges in workforce availability, working hours and farm safety. An immigrant workforce, which makes up an estimated half of the U.S. dairy workforce and is especially vulnerable to these issues because of limited legal protections, will also benefit from Fair Trade USA’s new dairy program. In collaboration with experts and organizations already working in the space, Fair Trade USA plans to develop an environmental component to this program which will address the unique challenges of the dairy industry.
SB: And how can private brands address get involved in this segment?
AA: The dairy program is now open to all private brands in this space. Fair Trade USA certifies raw milk at the source and can therefore be a certification for fluid milk or any value-added dairy based product. The program is open to all supply chain structures, from cooperative to direct, organic or conventional.
Private brands can join this innovative initiative by contacting Fair Trade USA to start scoping the impact for farmers and workers in their supply chains. Together we can understand your market goals and current structure to start the conversation with your suppliers and manufacturers.
SB: What beverage categories could use more private brand involvement, and what are the challenges holding back retailers?
AA: Beverage was the second fastest growing category (behind frozen foods), gaining over 10%, year over year. Retailers have really stepped up to the challenge of supporting the industry-wide initiative to make coffee the first 100% sustainable commodity — converting their pods, instant and bagged lines. There is still an opportunity in coffee for refrigerated and RTD. Other sub-categories we are seeing big gains in beverage, according to IRI, are cocktail mixes, energy, sports drinks, carbonated soft drinks and refrigerated juice — all that could use Fair Trade Certified Cane Sugar.
Some challenges with these sub-categories tend to be they are often on pricing programs, making it hard to compete with national brands and they are competing with brands with strong brand awareness and following. As retailers continue to consolidate SKUs to offer the most productive items and reduce assortment, it will be important for retailers to find ways to differentiate from their national brand competitors and to get in front of more customers. Fair Trade is a great way to kill both of those birds with one stone.