Fair trade can shake things up — in a positive way — across the supply chain.
Mexican avocado grower-exporter Grupo Los Cerritos made headlines in 2023 — not for the many problems that plague the country’s avocado growers, but rather for winning a regional sustainability recognition for the fourth time in a row.
The award added to a swath of certifications that Grupo Los Cerritos, based in Ciudad Guzmán, a small, rural city surrounded by mountains in the south of Jalisco state, has gained over recent years, highlighting the increasing importance of fair trade and other standards for exporters across the produce industry.
Fair trade, on both sides of the Atlantic, sets economic standards for manufacturers to more equitably distribute the benefits of trade. The guaranteed minimum price — or fair trade premium — acts as a safety net for farmers and producers when prices are low.
As detailed on the Fair Trade USA website, the organization’s certified standards ensure safe conditions for workers, fair compensation, environmental protections and product traceability.
But what does all of this mean in practice?
For Jennie Coleman, president of Montreal, Quebec, ethical-trading banana specialist Equifruit, it’s all about changing the way we do business — and for the better.
“The banana industry has been stuck in the same rotten business model for over a century, and no one is happy about this,” she says.
Fair trade offers a new business model, one based on shared responsibility for a sustainable supply chain.
PHOTO COURTESY OF EQUIFRUIT
“Retailers have used bananas as a loss leader, imagining consumers will judge overall store affordability on the price of bananas, which puts price pressure on the supply chain to keep bananas coming in at the lowest price possible,” Coleman says. “The knock-on effect of this at plantation level is devastating: poverty wages, poor working conditions and cut corners on environmental practices to increase yields.”
Fair trade, she adds, offers a new business model, one based on shared responsibility for a sustainable supply chain.
Equifruit, which started life as EquiCosta over a decade ago, was acquired by former rail executive Coleman in 2013, and has since evolved into a fair trade banana powerhouse, becoming, in Coleman’s own words, synonymous with the certification standard.
“Fair trade is our whole thing,” she says. “We are laser-focused on changing the banana industry to ensure small growers and plantation workers get a fair shake of the value along the supply chain, and Fairtrade International’s framework is the best way we’ve found to do this. We’ve been 100% fair trade since Day 1.”
Equifruit is certified by Fairtrade International.
“Our impressive growth is the most pure indicator of demand for fair trade bananas,” she says.
Fairtrade America reveals shoppers are willing to pay more for Fairtrade-certified products, despite rising cost of living in the U.S. Results also noted that carrying the Fairtrade label positively impacts brand perception.
PHOTO COURTESY FAIRTRADE AMERICA/ANGELA WU
“The vast majority of consumers barely notice the higher price point, and yet feel good about being part of a solution, particularly when this solution comes packaged in Equifruit’s humorous, impossible-to-ignore messaging.”
Another company that has heavily invested in fair trade is one the industry’s biggest players — Dole. Certified by both Fair Trade USA and Fairtrade International, Dole’s fair trade sourcing in Costa Rica, Colombia and Ecuador generates an estimated $4 million in funds each year that go back to the source for social investment.
“This is a very important area for Dole. We believe in Fair Trade/Fairtrade as we see the results of the contributions in our operations in Latin America,” says William Goldfield, Dole’s Westlake Village, CA-based director of corporate communications.
“It is one of the few programs that directly links the farms and workers to the supply chain and retailers.”
In the case of Dole, the company acts as a link between growers and the market, supporting the former in understanding the standard and achieving certification, and working with fair trade organizations and retailers to introduce the product to the consumer.
Goldfield says Dole has been participating in the fair trade system for over 20 years in bananas and pineapples, and estimates approximately 4% of its volume to all markets was sold as fair trade in 2023. He says growth has been constrained due to the impact of economic conditions on consumer spending for what is a more expensive product.
There are two versions of fair trade standards currently in operation in North America: Fairtrade International — based in Bonn, Germany — and Fair Trade USA, in Oakland, CA. Fair Trade USA split from its former parent organization in 2012 to expand its reach beyond cooperatives and small farmers to large-scale producers and exporters.
To muddy the waters further, Washington, D.C.-headquartered Fairtrade America launched in 2013 as the new, official representative of Fairtrade International in the U.S.
Central to both versions, however, is the fair trade premium, a set amount — which varies depending on standards, commodity and country — added on top of the price, which filters back to growers and plantation workers to invest in productivity and quality improvements, as well as community development projects, according to Coleman.
In the case of bananas, conventional and organic alike, this amounts to $1 per standard 40-pound case under the Fairtrade International standard.
THE FAIR TRADE JOURNEY
Not all companies take the same route to fair trade certification.
In the case of Grupo Los Cerritos, the company’s sustainability journey began in 2012 when a Risk Reduction Analysis carried out by Mexico’s National Service of Agro-Alimentary Health, Safety and Quality (SENASICA) highlighted the importance of measuring and documenting its activities.
According to Giovanni Cavaletto, chief executive of the group’s Oxnard, CA-based subsidiary, GLC Cerritos, the grower-exporter moved to obtain GlobalGAP certification in 2014, followed by the implementation of Rainforest Alliance standards in 2017, and Sedex Members Ethical Trade Audit (SMETA) social responsibility certification for its packing houses. In 2023, it became the first Mexican avocado company to have a dedicated sustainability director with the hiring of Armando Garcia Angulo.
A global social compliance scheme based on the Ethical Trade Initiative (ETI) Base Code, SMETA is used to monitor suppliers’ working conditions across labor, health and safety, environment and business ethics. GlobalGAP, meanwhile, is used to demonstrate compliance with good standards for farm workers’ health, safety and welfare.
The newest addition to GLC Cerritos’ list has been the certification of all the company’s U.S.-exporting orchards in 2024. Cavaletto estimates as much as 20-30% of its sales are now likely to be fair trade certified, though he emphasizes they are just getting started.
A company with a similar experience is Amado, AZ-based, Wholesum Family Farms, a business that draws volumes from greenhouses and shadehouses across the southern U.S. and Mexico, covering locations from South Carolina and California to the Mexican regions of Guanajuato, Jalisco, Sonora and Sinaloa.
Wholesum marketing manager Joanna Jaramillo describes fair trade as a framework that aligns with the company’s values and commitment to social and environmental responsibility.
“When we say ‘healthy,’ we mean it for all who make up our stakeholder community, including the consumer, the environment, the workers who grow it, and the communities where we operate. Fair trade certification is a key tool in helping us achieve this mission,” she says.
“For us, incorporating fair trade into our strategy isn’t just a business decision, it’s a way to amplify positive impact across our entire supply chain. Increasing the reach of fair trade certified produce, as well as spreading education about its impacts, are among some key strategic efforts we make.”
Jaramillo identifies fair trade as part of a growing movement characterized by increased awareness of social and environmental issues, in part driven by social media influencers and content creators bringing to light injustices in the supply chain.
“More consumers demand transparency and accountability, and fair trade is leading the charge to make supply chains more ethical,” she says. “Fair trade offers a tangible way to make a difference.”
“Fair trade not only improves the lives of farmworkers, but also fosters a more equitable and responsible global marketplace.”
— Suzanne Barkley, NSF, Ann Arbor, MI
Working adjacent to fair trade, Ann Arbor, MI-headquartered NSF is an independent public health organization that has focused on improving human and planet health for the past 80 years.
According to Suzanne Barkley, NSF’s director of food supply chain certification, the organization delivers its mission by leveraging the power of science, innovation and partnerships to enable safe and sustainable food, clean water and life-enhancing products.
“We support fair trade practices in the produce industry by providing social audits that help companies to both produce and source goods that have been grown and processed with sound ethical practices,” she explains.
“Services such as social audits help ensure food quality and safety through reviews of labor standards, health and safety practices, universal rights and responsible recruitment processes, business ethics, environmental management and more.”
According to a 2024 global survey from NSF, The Real Impact of Food Safety Certifications, 26% of global food businesses say dealing with social and ethical issues in their supply chains is one of the greatest challenges they face. Meanwhile, a lack of visibility along the supply chain was identified as an “obstacle” by 32% of respondents.
THE WIDER BENEFITS
According to Coleman from Equifruit, implementing fair trade practices is one way of tackling this lack of visibility.
She advocates that retailers not only raise banana prices, but also communicate to consumers that this is in line with a responsible procurement policy. Coleman argues such a move would enable retailers to make a profit on the products, while enabling growers and workers to climb out of generational poverty.
“[Consumers] see everything else going up, and while there might be grumbling at first, higher prices will become the new normal,” she predicts. “Let’s not forget that even respecting fair trade minimum prices at origin, bananas will continue to be the least expensive item in the produce department, just a little less cheap.”
Coleman argues fair trade could also have a positive influence on two major global issues: food security and immigration.
“If we don’t make bananas an interesting career option for young people, who is going to grow our favorite fruit? Just as there is a lack of interest here in North America from younger generations to continue the hard work of farming, so it is in Latin America where our bananas are grown,” she says.
Secondly, on the issue of migrants, Coleman claims low wages and poor working conditions in countries like Guatemala are driving people to try and reach the U.S. southern border, adding that on some farms, workers can earn as little as $1.05 per hour for 68-hour weeks.
“Retailers will pander to consumers by proudly stating that they have a ‘low price guarantee’ on bananas,” she says. “We can’t imagine that one isn’t related to the other.
“By paying a fair price per case, we can ensure sustainable production, an attractive option for young workers to ensure food security for us and a better future for them — in their home countries.”
Fair trade not only improves the lives of farmworkers, but also fosters a more equitable and responsible global marketplace.
PHOTO COURTESY OF EQUIFRUIT
At Dole, fair trade offers continuous market access and significant support to small holder farmers who are particularly vulnerable economically, Goldfield says.
“Fair trade has been a concrete way for Dole to complement its corporate social responsibility efforts by providing the link between retailers and certified growers and farms, creating value for all three partners.”
“We have seen the tangible benefits for our workers and the local communities around our farms. Our fair trade programs have allowed for positive impact, for example with community centers created on Dole pineapple farms in Costa Rica, thanks to the fair trade premium.”
In addition, Goldfield believes the fair trade model has created a “new” product, distinct from the sale of conventional commodities, which provides more choice for consumers, while generating funds for social investment at product origin. “It is important for us to deliver what consumers expect, and there is a growing demand for those products.”
Jaramillo from Wholesum says funds generated from Fair Trade Certified purchases help implement community projects focusing on access to education, housing, transportation and health services.
As well as having the entirety of Wholesum’s company-owned farming operations Fair Trade Certified by Fair Trade USA, Jaramillo estimates that between 60% to 65% of sales from partner growers are also certified. In cases where allied producers haven’t yet achieved Fair Trade Certification, Wholesum offers support to help them reach the required level within two years.
“Fair trade is also a choice made by customers and consumers,” Jaramillo adds. “We are fortunate to work with partners like Whole Foods Market, Costco and Sprouts Farmers Market, as well as wholesalers who have made fair trade a central part of their sourcing strategy. These companies consistently choose to stock fair trade produce, carrying that commitment through to their messaging and helping us advance our mission.”
Cavaletto says the concept of fair trade forms part of GLC Cerritos’ continuous improvement culture, arguing that having such certifications allows the company to “share the good that the avocado industry does in the communities where we live and work.”
The presence of fair trade labeling provides consumers with the assurance the product they buy comes through a fair supply chain, according to Cavaletto.
“Agriculture gets a lot of bad press, and as today’s consumer is further removed from agriculture, it is difficult to know which stories to believe and which not to,” he says. “This platform gives the consumer the confidence that the supply chain for the product was studied and approved by Fair Trade USA.”
Although Barkley from NSF says the definition of “fair trade” can vary depending on if you are a grower, retailer or consumer, it is generally taken to mean produce that has been grown and handled under fair working conditions that do not involve exploitation.
“For growers, ensuring fair trade can support a stronger work culture and relationships with buyers,” she says. “Furthermore, as goods that are marketed as fair trade can be sold at higher price points, it can mean greater financial stability for workers in an industry that sometimes lacks stability due to market fluctuations.”
For retailers, Barkley says sourcing and selling fair trade products can enhance brand reputation and support demand from socially conscious consumers, leading to greater differentiation from competitors.
Lastly, for consumers, she believes the presence of fair trade certification provides added value to products, and allows consumers to play an active role in supporting positive social and environmental practices.
The Fairtrade Mark signals to consumers that the products are made following Fairtrade’s economic, social and environmental standards.
PHOTO COURTESY FAIRTRADE AMERICA/ANGELA WU
“Fair Trade Certified is a model based on responsible business, conscious consumerism and shared value to eliminate poverty and enable sustainable development for farmers, workers, their families and communities around the world,” Barkley adds. “Fair trade not only improves the lives of farmworkers, but also fosters a more equitable and responsible global marketplace.”
FAIR TRADE STANDARDS IN ACTION
Fair trade works by having a fair trade premium, which is tied to the sale of the fruit, explains Cavaletto at GLC Cerritos. “You sell the case of avocados at a certain FOB and the fair trade premium is a line item on the invoice over and above the FOB.
“The fruit is then packed with fair trade labeling, so the consumer knows it’s a fair trade product, then both sides are audited by the organization to confirm that the marketed fruit was fair trade, that the premium was paid, and that the funds flowed back to the supported farm workers and community projects.”
To make sure this flow of money takes place, GLC Cerritos set up a farmworker committee, while fair trade audits also make sure the funds are allocated appropriately.
Coleman from Equifruit regards Fairtrade International’s standards, which feature a prominent yin and yang-type mark, as being the gold standard and the most rigorous regulations for growers and traders alike.
On the production side, she says Fairtrade International’s standards cover economic, social and environmental aspects of a business, with the organization working with growers to analyze production costs and margins. The fair trade minimum price for a country and commodity is set by taking an average from these costs and using that as the cost of sustainable production.
Coleman says traders like Equifruit also must follow their own set of standards to respect the fair trade minimum price. “This is really the anchor of the fair trade system,” she says. “An acknowledgment that bananas aren’t somehow magically immune to inflation, and that you can’t wag your finger at growers about poor labor practices, unless you’re paying a fair price to cover fair wages.”
Of course, with several differing versions of fair trade certifications in existence, produce companies are not limited when it comes to choice. Jaramillo from Wholesum recommends choosing the version that best suits a business’ industry, operation and needs.
“Fair Trade Certification is a way for us to solidify the values that we stand for as a company and do so at a globally recognized scale. It helps us partner with other businesses who also subscribe to an ethical way of sourcing,” she says.
“At a more granular level, it has helped us make an impact in individual people’s lives. In our 11 years of certification, sales of Wholesum Fair Trade Certified produce have brought over $10.5 million back to our farming communities.”
To become fair trade certified, Cavaletto at GLC Cerritos recommends contacting a listed fair trade certifying agency that can guide interested companies through the application. “In my experience, it can take as long as a year, because there’s a lot of steps in the process,” he says.
“A lot of farmers might look at this as extra work, and it can be very daunting, but our approach is to see these as investments in the future, rather than costs in the short term.”
For Coleman, Equifruit’s 100% Fairtrade brand promise is a major point of differentiation in a market dominated by players “carrying the legacy of the last century’s banana business model.”
“We want to be a 21st century banana company, one based on respectful trading relationships and sustainable production practices,” she adds.
“Only 4% of the global export banana market is bought and sold on fair trade terms. We’re looking for banana badasses, those people who see the need for change and know it’s in their power to do something about it.”
Jaramillo from Wholesum believes the concept of fair trade represents “conscious capitalism,” where consumers pay a fair price for the work invested in a product.
“It’s about bringing universal standards of equity where producers are treated in a dignified manner,” she says. “I personally believe in the power that Fair Trade Certification has to impact communities in a very meaningful way because I have personally seen it.”
• • •
What is Fair Trade?
The concept of “fair trade” can be defined as “use of ethical, equitable conditions in producing and trading goods, especially in developing countries,” with certifications helping demonstrate a business’ commitment to these practices, according to Suzanne Barkley, director of food supply chain certification with NSF, a global public health and safety organization based in Ann Arbor, MI.
In general, she says, the certification process involves an application and assessment by an independent third-party certification body. This can involve a technical review of documents, as well as an on-site audit.
“If the producer meets the standards, which can include fair wages, safe working conditions and sustainable farming methods, the certification or audit is approved or deemed compliant,” continues Barkley.
“Once certified, the business can then market the certification or share the audit report, and must regularly undergo assessments to ensure ongoing adherence to the standard.”
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Publish date : 2024-09-26 02:40:00
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