Is Fairtrade a Phase or the Future?
In recent years, like most professionals with a young family, I’ve found myself becoming not so much a follower of fashion, as a follower of fairness. As a family we do our utmost to fill our shopping basket with fairly traded coffee and ethical chocolate, alongside all of the organic fruit and free range eggs.
As the recession bites it’s tempting to put the altruism to one side and refocus on price as many consumers around Europe are reportably doing. Does this spell the end for fashionable Fairtrade? Or do ethical brands have more to offer than a label that says ‘buy me and be a better person.’
The sudden rise in popularity of these obscure, premium priced products certainly hasn’t escaped the notice of the multi-nationals, many of whom have been keen to add a friendly faced brand to their balance sheet. First, those quirky American hippies Ben & Jerry sold out to Unilever, then Body Shop submitted itself to L’Oreal, later, in the UK, organic chocolate pioneers Green and Blacks were acquired by cocoa giant Cadbury and earlier this year the three college friends that founded smoothie pioneer innocent, were ‘guilty’ of inviting Coke to join their party.
The innocent team claim, that they chose Coke over other suitors, despite the businesses shaky human rights record because they liked the people they met and found them to be smart and honest. They also point out that the money came from Coke with no strings attached, while other potential investors wanted to take control or to limit innocent’s policy of donating 10% of profits to charity. Founder Richard Reed says
“We of course did a boat load of due diligence, it’s the single biggest decision we’ve had to make over the last ten years. We looked into all of the accusations, we spoke to a wide variety of different people and we got extremely comfortable ourselves, that it (Coca-Cola) is a decent business, that the people in it are decent folk and that the company, overall, is a decent company.”
So in this case at least it appears that the corporate giant behaved with integrity. I’d venture that Coca Cola’s motivation for investing in innocent was about far more that getting a return on the £30m invested, they also wanted to understand how ethics can be good business. By any measure innocent is a very successful enterprise, going from an idea and just £500 worth of fruit to a £100m FMCG business in just 7 years is a phenomenal achievement that even a mega brand like Coke could learn from. Especially, if that commercial success can be achieved with a conscience.
Like all listed businesses, The Coca-Cola Company is looking for ways to match it’s Corporate Social Responsibility statements with actions. Charitable donations and allowing staff to work in the community are a gesture at best that has little impact on the bottom line. Whereas doing business the ‘innocent way’ is perhaps, the very essence of entrepreneurship.
It’s possible that Coke have predicted that in future their great size may be a disadvantage. Post recession, consumers will tend towards smaller businesses they can trust, that wear their values on their sleeve, not carefully scripted into a policy statement. In a world in which a Google search often tells a different story than the official marketing, small is beautiful and big is risky. Maybe the meek will inherit the earth.
