In recent years our food, clothes and household goods have become coated with a layer of ethical labelling. Many products have been marketed with a Fairtrade, Organic or Rainforest Alliance stamp – but do we really know what this means?A global survey of Fairtrade was carried out by Nielsen in 2008 and found half of European consumers ‘always recognise Fairtrade products’. However the European Commission noted in a communication on Fairtrade that ‘the multiplicity of these schemes carry risks of consumer confusion.’ The challenge for consumers is to decipher what these labels mean and distinguish between the legitimacies of the claims.The purpose of labelling is to prove that the company producing the product is conforming to ethical best practice, as set out by whichever not for profit organisation is providing the labelling stamp. In addition, the company should be giving an amount of its profits to the not for profit organisation - but how much the organisation receives can vary greatly.The lack of trust in where and how profits are distributed has led some eco aware consumers to doubt the validity of commonly seen labels like Fairtrade and Organic. Companies such as Nestle have devalued the Fairtrade brand by using it as a tool to ‘green wash’ its brands. Uproar ensued in 2007 when Nestle received Fairtrade status for one of its coffee products, particularly from Monsanto, which supports GM crops and also has Fairtrade status.When launching a new product, it is wise for companies to consider carefully which ‘ethical label’ to support and investigate the legitimacy of the company and the work they carry out. Ultimately, this could have a strong negative or positive effect on the way a company is perceived.There is a danger that small companies looking to gain an eco or ethical status are beginning to suffer against the ‘fat’ labelling organisations and are being pushed out of the framework by large companies, which can afford to get accredited.There is some merit to suggest a new organisation could benefit from developing its own ethical labelling model. If a new product was launched that supported a new or alternative way of harvesting, farming or producing, a company should not be afraid to display its ethical credentials in its own way.Increasingly, many eco savvy consumers actively look for companies that are supporting more niche, tailored, not for profit organisations such as the Rainforest Alliance or Marine Stewardship Council.Regardless of some spikes of awareness in the sector, the mass market still seems to perceive the Fairtrade stamp as a ‘pat on the back’, allowing them to purchase their favourite Nestle coffee in comfort. When it comes to Fairtrade and Organic, consumers do seem willing to accept the premium price. But, they may not be paying for ideological reasons or even quality, but simply to provide peace of mind and massage the green ego of the parent organisation.
Amy Stobie, partner at TheAgency
Many Fairtrade products are now the same price as ordinary ones, in some cases even cheaper.. FFI's Fair Instant (they use to make Café Direct’s coffee) is a price match to Nestle and also has the benefit that 20p a jar goes to Save the Children. Rainforest Alliance, now there's something that sounds good but isn't as good as Fairtrade. Already there are too many labels and another would just get lost. Consumers want simplicity not another label. They want to defer responsibility not to have to look behind the label. In commercial terms, those that do are too few to bother with.
I’m not sure I agree with “many eco savvy consumers actively look for companies that are supporting more niche, tailored, not for profit organisations such as the Rainforest Alliance or Marine Stewardship Council.”How many is many? I’ve not seen any evidence that any more than a very small number are. And Rainforest Alliance is hardly a niche organisation.
In the Ethical Shopping Survey Fairtrade was the top winner for consumers when it came to ethics. A Grocer survey found it was the most recognised label. It’s all in the book, Ethical Marketing & The New Consumer (out on Amazon).
Or check out the Ethical Marketing Blog on Brand Republic
You make some interesting points Chris. I'm not sure more labels are the answer, and of course consumers will always want things to be kept simple, but life, products and ethics are not simple. Perhaps what is needed is for the authorative bodies to be clearer about their intentions and rating systems, and maybe they need to look wider than just a product, such as the manufacturers of that product. It doesn't seem right for corporates to be able to launch single products and attain accreditations, when the rest of their business may contradict those very practices. On the note of price points, maybe a premium is no longer available on these products, but what Fair Trade does do is enable companies to attain further market share from other brands (both Fair Trade and non).
I read a recent response to an ethical blog citing an Organic farmer in the UK who rears his herd on non organic farming, but let's them graze on organic pastures for the final weeks of their life prior to slaughter, enabling them in some way to attain Organic labelling. Maybe what is needed is a body that looks to close these ethical loop holes, to stop individuals and corporates taking advantage of them, and the consumers nature.
Amy Stobie
Member since: 09 Oct 2009
Last login: 16 Oct 2009
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