Why Fairtrade products make good business sense

Fairtrade towels

The Fairtrade Foundation last week launched a new campaign calling for urgent action to support the 500m smallholder farmers who produce 70% of the world’s food, but are currently half the world’s hungry people.

The report to launch the campaign, Powering up Smallholder Farmers to Make Food Fair, says that, even when smallholder farmers are producing cash crops at the sharp end of lucrative international supply chains, the global food system still fails them.

A huge number of hotels already supply customers with Fairtrade products - mostly in the form of food and beverages. However, now's the perfect time to refresh your Fairtrade policy and find out what other products are on offer. In this article, we will look at the more ‘unusual’ Fairtrade Goods you can provide for your hotel guests and how this may prove beneficial to your business. The first step to understanding why making a Fairtrade commitment could be beneficial to your establishment is to understand the goals and values of the Fairtrade Foundation.

A quick guide to Fairtrade labels

Fairtrade products are made to standards set by the Fairtrade Foundation. These standards are designed to help improve the quality of life for producers in developing countries. Fairtrade products are produced according to a very specific set of criteria. Products with a genuine Fairtrade mark are certified by the Fairtrade Foundation.

However, you will also see products with “Fair Trade” labels. These products are produced according to a variety of policies, having been certified by a number of different foundations and organisations. The term “Fairtrade” and the Fairtrade Mark are trademarked by the Fairtrade Foundation. However, the term “Fair Trade” has different legal classifications. For example, in USA law the term “Fair Trade” is classed as a fair use term, meaning that other companies could potentially use the term for their products without certification.

The Fairtrade Mark by the Fairtrade Foundation has been around in some format since the late 1980s, with the first Fairtrade coffee being created by producers in Mexico and being sold in Dutch Supermarkets.

Since then, the brand and movement have been growing. In 1997, Fairtrade became a fully global movement, with the establishment of Fairtrade Labelling Organisations International (FLO) and a new, international Fairtrade Certification Mark receiving a trademark, allowing for global brand recognition.

In 2007, 21 different Labelling Initiatives were included as members of FLO International. As of 2012, this number was at 25. This means that there is a likely chance that your establishment will be near a Fairtrade provider and will be near consumers who recognise the Fairtrade mark. Click here for a map of the 25 FLO members.

Consumer awareness of Fairtrade has grown rapidly since the Fairtrade Foundation’s beginnings. According to Helen Riley, spokesperson at the Fairtrade Foundation, “recognition of the Fairtrade Mark is higher than for any other consumer label, at 78%”. In 2009, this figure stood at 72%. According to surveys1, 64% of consumers have a high level of trust in products that carry a Fairtrade Foundation logo.

All of this means that by providing Fairtrade products in a hotel, you are presenting consumers with an ethical mark that they can recognise and trust.

Why is offering Fairtrade products important?

Making a Fairtrade commitment in your establishment can help improve the quality of life for producers around the globe. With the rates of recognition and trust in Fairtrade on the increase, it is likely that guests, both new and returning, may feel that by staying at your establishment they are making a moral and ‘right’ choice.

A large part of the Fairtrade ethical process is setting a Fairtrade minimum price for produced goods. Buyers will pay this minimum price to disadvantaged producers. The aim of this is to protect producers against market price fluctuations. Furthermore, by providing this fair price, buyers are also making sure that disadvantaged workers are receiving a fair wage for their labour.

On top of this is a Fairtrade premium. This premium is a mandatory amount, separate from the Fairtrade price that is paid to producer organisations. These organisations then use the revenue from the Fairtrade premium to improve the quality of their community, for example by investing in farm improvements, in education, healthcare or in new processing facilities. Although the use of these funds are decided at a local level, the Fairtrade premium can only be used to invest in economic or social benefits for workers, their families, or their communities. The Fairtrade system currently works with 1.24 million farmers and workers across more than 66 developing countries. Globally, Fairtrade producers received a total of approx 53 million GBP as additional Fairtrade Premium in 2010-11.

In this way, by making a Fairtrade commitment, your hotel would be helping (in part) to bring growth to a whole community. Out of 33 case studies of producers of Fairtrade products examined in a September 2009 study by the Natural Sources Institute, there are 31 examples of Fairtrade providing positive economic impacts; a success rate of over 93.9%.

Common Misconceptions about Fairtrade Products

Due to the visibility of Fairtrade – with 96% of surveyed UK users saying they often see the Fairtrade Mark – it may be easy for misconceptions to crop up.

Costs

One common idea is that Fairtrade products cost more, both for the business and for the consumers of that business’ products. However, consider big chains such as Cadbury and Starbucks. As Helen Riley of the Fairtrade Foundation says: “People don’t pay more for Dairy Milks or Kit Kats since they switched to Fairtrade, nor did Starbucks and Pret increase their prices when they moved to Fairtrade.”

It’s possible for businesses to offer Fairtrade goods to consumers without increasing prices, but is this possible within a hotel environment?

One way to save money on the cost of Fairtrade products is to purchase them in bulk from reputable Fairtrade suppliers. Furthermore, you could also start buying a mixture of goods, some Fairtrade and some not, and offer your guests a choice. In the initial stages of making a Fairtrade commitment as a hotel, this would allow you to test the effects of providing Fairtrade goods, on cost and impact to your business, before making a full commitment.

Quality

Another common misconception about Fairtrade products is that they may be of a lesser quality than similar products that aren’t produced according to Fairtrade Policies. Many Fairtrade products have been determined to be as well-made as counterparts that aren't Fairtrade. For example, the Fairtrade Foundation says that, in terms of cotton products, “there’s no difference in quality between Fairtrade cotton and normal cotton”. As well as this, other Fairtrade products, including Tea and Coffee, have won independent awards for quality.

Part of the certification of Fairtrade products includes a series of technical standards. These standards ensure that Fairtrade goods you purchase for your establishment will be produced in regards to a prescribed standard of quality. Production and growing methods don't change when a product becomes Fairtrade, but the pockets that revenue goes into does.

Organic

Although Fairtrade products can be organic (and indeed, many are, and there is a higher Fairtrade minimum price for organic goods) a product being Fairtrade does not automatically mean that the product is organic. If your hotel does make a Fairtrade commitment, it may be advisable to train your staff on this aspect.

The business case for using Fairtrade products

Even though using Fairtrade products can be seen as an ethical choice, and the quality and cost of these products may be no different (or in some cases, better) than products sourced under different standards, there is still the question of whether it makes business sense to make a Fairtrade commitment. The Santander business guide points out that “offering Fairtrade products can be a good way of differentiating your business from its competitors” and that displaying Fairtrade products “can be an attractive selling point for your hotel and can help to attract ethically aware guests.”

When asked about the business advantages of switching to Fairtrade, Helen Riley says: “Customers are now much more aware and interested in where their food comes from, who grows it and how. This trend is putting businesses in the spotlight as consumers want to know that workers are not being exploited. It means ethical consumption is growing fast. It’s currently growing nearly 8 times faster than the economy as a whole. Fairtrade sales have doubled year-on-year since 2003.”

Displaying Fairtrade products can also help to gain custom from an increasing pool of conscientious travellers. According to an April 2012 Tripadvisor.com survey, 71% of surveyed travellers planned to make more eco-friendly travel choices in the next twelve weeks. At the end of February 2013 the Faritrade Foundation announced a 19% increase on 2011 sales, proving the increasing popularity of the products.

Fairtrade products are also only certified with the Fairtrade Foundation mark if they meet certain environmental standards, which includes a requirement for producers to work to protect the natural environment and to make environmental protection a part of their farm management.

It’s also not just guests who may be happier with your establishment using Fairtrade certified products. Your staff, both current and potential, may be as well. Harriet Lamb, executive director of Fairtrade, opened up the World Responsible Tourism Day by saying: “Companies have found that the more they invest in sustainability, the prouder staff feel – so helping with recruitment and retention of the brightest and best.”

(For further information on how being ethical can help you with your staff, see this Green Hotelier article on responsible procurement)

Different Fairtrade products

By swapping out only the standard products, such as teas and coffees, to Fairtrade products, it is possible that staff and customers may think that you are providing an incomplete ethical commitment. The aforementioned Tripadvisor.com survey says that only 44% of surveyed participants believe hotel claims of being ‘eco-friendly’. If you are marketing your establishment an ethical and green place to stay, it may be advisable to think about other, maybe surprising, places you can provide Fairtrade Certified products

Fairtrade in the bar and restaurant

It is possible to swap many bar items with Fairtrade alternatives. One example of an item that can easily be swapped for a Fairtrade version is wine. On many large wine plantations in developing countries hired workers are not protected from labour abuses. There are currently Fairtrade certified wine producer organizations in South Africa, Argentina and Chile. Fairtrade wines are one of the fastest growing Fairtrade products, with sales of Fairtrade wine up by 12% throughout 2011. Furthermore, Fairtrade wines were chosen to be the official wines of the London 2012 Olympics.

With this growth in Fairtrade wines, it may be best to contact your usual supplier to see if they have a Fairtrade selection. If Fairtrade wines are unavailable from your usual wholesaler, you can check the  FLO-CERT website, to find out which wine producers are certified.

Other bar items are also available in a Fairtrade format, including beers and spirits.

Spotlight on Asperion Guesthouse, Guildford, UK

This Hotel provides a range of Fairtrade items on their bar menu, including the Fairtrade spirits Utkins White Rum and Papagayo Spiced Rum. The website for Asperion displays a Fairtrade logo in the footer, potentially attracting guests who are seeking a hotel that provides Fairtrade products.

Manny Sawhney says of the success of his hotel: “When you have praise from people used to stay-ing in seven-star Dubai hotels you know you are doing something right.”

For more information, visit www.asperion.co.uk.

Fairtrade linens

The increasing use of synthetic fibres like polyester has had a negative effect on the cotton industry - pulling prices down to an all time low and reducing job security for millions of cotton growers around the world. Since the introduction of the first Fairtrade Minimum Prices for cotton in 2004, Fairtrade has demonstrated it can substantially improve the lives of cotton producing communities. By selling to the Fairtrade market, cotton farmers have the security that they will receive a Minimum Price which aims to cover their average costs of sustainable production.

Fairtade cotton producers are usually small family farms organized in cooperatives or associations which the farmers own and govern democratically. The only exception is in India and Pakistan, where some cotton producing communities are not organized in cooperatives, but are selling to a promoting body.  The promoting body is responsible for passing back to the individual farmers the extra benefits generated by Fairtrade sales.

Towels can be an integral part of a guest’s hotel experience and there are many excellent Fairtrade products. Whilst guests are often cynical about the environmental advantages of not providing fresh and clean towels every day, having Fairtrade towels can help assure guests that your goal is to make an ethical commitment. To expand the policy further, instead of throwing old towels away they can be donated to charities like 'Shelter'.

As with spirits, it can be best to contact your normal supplier to discover if they have any Fairtrade options for towels available. This will allow you to keep your current relationships active. However, if this isn’t possible, then other companies, such as King of Cotton can provide Fairtrade towels to trade customers, at wholesale prices. Other surprising linen items can also be found, including linen cushions, carpets and rugs.

Spotlight on Dorint Hotel, Amsterdam:

Targeted at the environmentally-conscious traveller, the Dorint Hotel in Amsterdam offers guests accommodation in a “Green and Fairtrade” room. Every aspect of this stay has been targeted towards presenting a green and ethical stay, with a Fairtrade Welcome Cocktail being presented to guests, as well as a free day pass for bicycle rental. As well as these green amenities, the Dorint Hotel also sets up entire rooms with Fairtrade linen products, including towels, bed linen and bathrobes. Attention to detail has been made to many aspects of this hotel’s Fairtrade commitment, with even the flowers being Fairtrade

For more information, visit www.dorint.com.

Fairtrade Decorative Items

A growing proportion of cut flowers are produced and exported by developing countries such as Kenya and Tanzania, in Africa and Colombia and Ecuador, in South America. In these countries, jobs in the flower industry are often insecure, with short-term contracts, offer low wages and no benefits. The industry is accused of paying workers less than $1 US a day for an 8- to 12-hour shift and housing them in crowded facilities (Kenya Human Rights Commission). Fairtrade aims to protect and benefit workers on flowers farms by certifying those farms which ensure safety and good working conditions for their employees.

Fairtrade flowers can be purchased for trade customers at different sources - it may be best for you to contact your usual provider to see if they have any Fairtrade flowers in stock. Failing this, however, it is possible for you to view Fairtrade flowers and find distributors for these products from places such as J&E Page.

There are plenty of other small, subtle accessories that can be Fairtrade. Some hotels get willing members of staff to go through an establishment and offer Fairtrade suggestions.

Spotlight on The Green House, Bournemouth, UK:

Attention to detail in sourcing Fairtrade certified items runs deep at The Green Room. As part of the Fairtrade commitment, the Green House Hotel has also provided its staff with Fairtrade Uniforms. These Uniforms, as well as being ethically sourced, also have the Green Room’s branding on them. This is in addition to using only Fairtrade coffee and tea and sourcing wine and juice from Fairtrade sources. Organic Fairtrade cotton is also used within the bed linen at The Green House. This hotel has been included in the exclusive Mr and Mrs Smith Hotel collection.

For more information, visit www.thegreenhousehotel.co.uk.

These are only a few examples. It can be hard to keep track of all the items that are being certified as Fairtrade. An easy way to follow updates on new developments is to keep an eye on your local Fairtrade Foundation website, which can be found through Fairtrade International. This way, the moment a new, business-effective practice (including new Fairtrade items) is put into place, you can be one of the first hotel owners in your area to know about it.

Next time you order supplies for your hotel, ask yourself if there is a way to replace that product with an ethical, Fairtrade alternative. You may be surprised at what can be replaced at no extra cost or loss of quality for your guests’ hotel experience.

Thanks to King of Cotton, suppliers to UK hotels, spas and consumers of cotton linens for their contributions to this article. For more information go to Fairtrade Foundation.

For more information on the stats provided check out the full results of the GlobeScan survey of Fairtrade , the September 2009 study by the Natural Sources Institute, the April 2012 Tripadvisor.com survey and the Santander business guide

Leave a Reply