Fairtrade sales in most product categories continued to grow steadily in 2016, despite an increasingly competitive environment, with a growing number of certification systems and a number of retailers setting up their own ‘in house’ sustainability schemes. This demonstrates that our certification model, with its unique value proposition, continues to be trusted and valued by companies and consumers alike. We will continue to expand the portfolio of services we offer beyond standards and certification to meet industry demands and to continue driving sales for producers. In doing so, we will ensure that more farmers and workers will have the opportunity to enjoy the benefits and increased empowerment they receive from being part of the Fairtrade system.
A distinguishing feature of the Fairtrade system is the Fairtrade Premium, which is paid to Fairtrade producer organizations – groups of certified producers – on top of the Fairtrade price, and is invested in business or community projects selected by the producer organization to benefit all members. Fairtrade continues to provide the highest premiums of any global certification label, and last year more than 1.6 million Fairtrade farmers and workers benefitted from estimated premiums of €150 million for sustainability or training initiatives, community education or health resources, or equipment. Premium payments enable Fairtrade producers, workers and their communities to invest in long-term sustainability in a way they couldn’t if they were receiving just the price of their produce, or if payments were made outside a collective system. And it’s another way Fairtrade consumers can be certain their purchases have an ongoing benefit to the people who produced them.
Coffee is probably the best-known product in the Fairtrade range as it was also the first one that hit the shelves when our certification model was first launched back in the late 1980s. In 2016, year-on-year sales increased by a steady three percent. Leveraging Fairtrade’s profile in the global coffee community, we have been advocating strongly over the past year for decent prices in this sector. A recent study published by Fairtrade and True Price revealed that although overall coffee household income depends very much on the regional context and local factors, a higher coffee price is the key to increasing incomes to a sustainable level. The need to increase the focus on pricing and trade fairness to improve the sustainability of the global coffee sector was emphasised in the Final Declaration of the First World Coffee Producers Forum in Colombia last July. Fairtrade will continue to work closely with stakeholders in this sector to deliver better lives for coffee farmers.
In 2016 we saw impressive sales growth for Fairtrade cocoa, which rose 34 percent on the previous year. Besides increasing sales, the Fairtrade system has been extending the support provided to cocoa farmers, especially in West Africa, which is the source of 70 percent of global cocoa production. A well-resourced Fairtrade team is now in place in West Africa, with the capacity to provide core Fairtrade certification support to the approximately 180 small producer organizations (SPOs) in the region. In addition, there are sustainability-focused interventions with key SPOs to enable them to become stronger and more viable organizations, responding to members’ needs and the demands of business customers.
Bananas are one of the most successful Fairtrade products, with 579,081 metric tonnes sold in 2016, representing an increase of five percent over the previous year. Under our Global Banana Plan we are seeking to support producers to increase their productivity levels and ensure that hired labour benefits from the increase in sales. Two examples of successful projects in this sector this year have been:
After experiencing negative growth in 2015 due to European Union policy changes, Fairtrade sugar is back on a positive trajectory. Despite a difficult political environment with the abolition of the EU sugar beet quotas, Fairtrade sugar sales grew by seven percent in 2016. One strategy we are currently exploring to support farmers is diversification into sugarcane-based bio-materials, a project in partnership with the Roundtable on Sustainable Biomaterials (RSB). We have also recently initiated a pilot project with Bonsucro, financed through the ISEAL Innovations Fund, to carry out a standards benchmark, and develop a single market offer Bonsucro-Fairtrade aimed at increasing Fairtrade sugar sales and income.
Fairtrade flowers, mostly produced in Eastern Africa, have become a very popular product in many markets over the past decade. In 2016, customers bought more than 829 million stems, representing an increase of five percent over the previous year. Last year also saw enhancements in the support provided to certified flowers farms, with the establishment of a dedicated Fairtrade Africa Flower Team, which is helping farms address compliance challenges and improve their practices.
We are also developing strategies to continue increasing the market for Fairtrade flowers. For example, we have recently introduced the bouquet composition pilot into our standard, which allows 50 percent non-certified foliage and flowers in a bouquet, as long as it is not available as Fairtrade certified. A new Trade Manager for the sector has also been appointed to develop a strategy to access the florist and auction market and explore new business options for flowers.
Despite a difficult business environment, with sales of standard black tea declining rapidly, sales of Fairtrade products grew by five percent in 2016. This is great news for the 345,000 tea farmers and hired labourers employed by Fairtrade-certified tea plantations. Over the past year our Global Tea Plan has focused its efforts on improving support for certified producer organizations in meeting Fairtrade compliance criteria and addressing key risk areas such as occupational health and safety and financial literacy. In order to continue to drive tea sales in the future, we are currently developing a specialty tea strategy to access new market niches.
Cotton is a growing category for Fairtrade, with increasing opportunities for producers to sell via the Fairtrade Sourcing Programs and under the new Fairtrade Textile Standard. Moreover, currently only 11 percent of the world’s cotton is sustainable, and there is an increasing interest in the industry to push for ambitious sustainability targets. External pressure and campaigning by NGOs targeted at the industry have helped increase momentum and we are confident there is a significant opportunity to extend market share for Fairtrade-branded products in this sector. Based on our extensive experience, Fairtrade is an ideal partner to address the challenges the sector faces around supply chain transparency, traceability and credibility. Demand for Fairtrade cotton remained steady last year but delays in delivery to buyers led to a slight fall in sales.