From its humble beginnings in the 1950s, fair-trade has developed into a global movement. A new report by Datamonitor reveals that fair-trade sales across Europe, the US, Australia and New Zealand, and Japan have experienced double digit growth since 2002. This growth is being driven by an increased consumer awareness of ethical issues and environmental concerns.
Ethical consumerism will increasingly come to the fore as people shop for products that they feel akin to politically, ethically and aesthetically. Indeed, consumers will choose brands that are actively making a difference in a transparent and trustworthy manner. This is reflected in Datamonitor's forecast that fair-trade purchases will see double-digit growth of 15.7% in the five years between 2007 and 2012 in France, Germany, Italy, the Netherlands, Spain, Sweden, the UK, the US, Australia and New Zealand, and Japan.
Of these 11 countries, Brits' spend per head on fair-trade products outstrips that of the rest of Europe, the US, Australia and New Zealand, and Japan. Meanwhile, the US fair-trade market, which is worth GBP455.3 million, is the largest market of the 11 countries.
In Europe, the UK remains the largest market for fair-trade products with a value of GBP395 million (GBP6.50 per capita) in 2007, followed by France and Germany with a value of GBP152 million (GBP2.50 per capita) and GBP99 million (GBP1.20 per capita), respectively. By 2012, Datamonitor expects the UK market for fair-trade goods to exceed GBP800 million. At the other end of the spectrum, with per capita expenditure at 50 pence and under, consumers in Italy, Spain, New Zealand and Japan spend the least on fair-trade goods.
Across all of the 11 countries, beverages account for the largest share of fair-trade product sales. In the UK, for example, fair-trade coffee and tea have become hugely popular and are widely available in many supermarkets and coffee shops.
This growth in fair-trade purchases is being driven, in part, by environmental concerns, which represent the most important issue in ethical consumption today, helping to drive the growth of ethical markets such as fair-trade. Consumers are becoming more concerned with how their actions are affecting the world around them, even eclipsing general concerns about society, economic and animal cruelty issues. Indeed, recent high-profile natural disasters are causing consumers to become increasingly concerned about climate change and, as the threat becomes more 'real' to western consumers, the trend will become increasingly important.
As ethical and environmental consciousness grows, so too will certain types of buying behavior. This is reflected in the growth of key product segments, notably fair-trade and organic consumption. As more businesses adopt more ethically sound policies, transparency and trust will become an increasingly important currency as manufacturers attempt to cool a potential consumer backlash to 'greenwashing' in the search for clear, honest and effective environmental benefits.
Fair-trade products meet both social and environmental standards set by this consumer group, creating a fair deal for producers and minimal environmental impact. Another important driver of fair-trade purchases is the perceived authenticity, detail and overall sense of provenance associated with such products. Consumers increasingly want to become engaged with issues such as origin and production details, and fair-trade labeling is something that gives them a degree of confidence over these issues.