Is fair trade finished? Fairtrade changed the way we shop. But major companies have started to abandon it and set up their own in-house imitations – threatening the very idea of fair trade
This is quite an interesting article that reflects a trend that I feel has been happening in recent years. For the past decades, sustainable products have been a premium category that customers...
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This is quite an interesting article that reflects a trend that I feel has been happening in recent years.
For the past decades, sustainable products have been a premium category that customers have expected to pay extra for. However, with climate change now finally not only penetrating the wider public consciousness but having become the central global issue of the day, there is an ongoing shift in the market where customers have become more aware of their purchasing decisions' impact on the world around them. Little by little, sustainability has shifted from being a premium category towards becoming the new norm, while pushing non-sustainable products into the more bargain areas of our supermarkets.
This is a good thing, in theory. However, it poses a problem for the companies that make our products. With a premium product, there is usually less pressure on the price point, as what you are selling is a certain type of quality or image that your customer is willing to pay extra for. But with regular products, which sustainable products are now becoming, you need to be more able to compete on price with other producers within your market segment.
Third party certifications and schemes such as Fairtrade increase costs for producers and therefore drive up the price that you can ask your customers. This is a smaller problem when you operate within a premium category, as it's easier to bake that extra into the product's final price. But when you need to compete more on price alone, it becomes challenging. With this in mind, the move made by Sainsbury is understandable, as the company can do away with the costs involved with third party certification while also gaining more control over what sustainability goals are actually important for them. From the sales point of view, as long as they can launch a new brand or label that consumers value to roughly the same extent as the old one, and with the current over-saturation of such labels in the marketplace it is arguably easier than it used to be, these companies can remain competitive within the market, or even increase their competitiveness.
The flipside of the coin of course is that external oversight is lost. Even if you are operating with best intentions, in a competitive market it is very easy to slip into cutting corners and taking short cuts when you regulate yourself, and this quickly leads to your sustainable efforts becoming little more than empty marketing greenwash.
Yet, as I said, this is a direction that I notice companies moving towards. It will be interesting to see where it all leads. At a very basic level, the climate crisis is driven by global overpopulation and overconsumption of resources -- we actually just passed this year's Earth overshoot day two days ago. The market operates on profit and with sustainability now moving down from the premium category, as I noted, the market is changing. In order to fight greenwashing and such, the options would seem either to somehow educate the consuming public to make more informed purchasing decisions, or to regulate the market more heavily. Whether either can realistically happen, I'm not so sure.
This is quite an interesting article that reflects a trend that I feel has been happening in recent years.
For the past decades, sustainable products have been a premium category that customers have expected to pay extra for. However, with climate change now finally not only penetrating the wider public consciousness but having become the central global issue of the day, there is an ongoing shift in the market where customers have become more aware of their purchasing decisions' impact on the world around them. Little by little, sustainability has shifted from being a premium category towards becoming the new norm, while pushing non-sustainable products into the more bargain areas of our supermarkets.
This is a good thing, in theory. However, it poses a problem for the companies that make our products. With a premium product, there is usually less pressure on the price point, as what you are selling is a certain type of quality or image that your customer is willing to pay extra for. But with regular products, which sustainable products are now becoming, you need to be more able to compete on price with other producers within your market segment.
Third party certifications and schemes such as Fairtrade increase costs for producers and therefore drive up the price that you can ask your customers. This is a smaller problem when you operate within a premium category, as it's easier to bake that extra into the product's final price. But when you need to compete more on price alone, it becomes challenging. With this in mind, the move made by Sainsbury is understandable, as the company can do away with the costs involved with third party certification while also gaining more control over what sustainability goals are actually important for them. From the sales point of view, as long as they can launch a new brand or label that consumers value to roughly the same extent as the old one, and with the current over-saturation of such labels in the marketplace it is arguably easier than it used to be, these companies can remain competitive within the market, or even increase their competitiveness.
The flipside of the coin of course is that external oversight is lost. Even if you are operating with best intentions, in a competitive market it is very easy to slip into cutting corners and taking short cuts when you regulate yourself, and this quickly leads to your sustainable efforts becoming little more than empty marketing greenwash.
Yet, as I said, this is a direction that I notice companies moving towards. It will be interesting to see where it all leads. At a very basic level, the climate crisis is driven by global overpopulation and overconsumption of resources -- we actually just passed this year's Earth overshoot day two days ago. The market operates on profit and with sustainability now moving down from the premium category, as I noted, the market is changing. In order to fight greenwashing and such, the options would seem either to somehow educate the consuming public to make more informed purchasing decisions, or to regulate the market more heavily. Whether either can realistically happen, I'm not so sure.