Percentage of total Cost of Sales (or Sales) that is spent in the developing world

This indicator gives a measure of what overall percentage of our direct Cost of Sales is from the developing world.

The three-year rolling average is a better measure due to the volatility of purchases in any one year, which may be used in subsequent years.

We can also estimate an average proportion of our final sales prices to customers of our fair trade goods, which is developing world spend. It should be noted that this is averaged across all product and customer types.

Proportion of final sales price of fair trade goods to our customers, which is spent in the developing world.

Indicators A and B together, show an overall picture which helps us to monitor the trend of our expenditure in the developing world.

They show that over the last 5 years, broadly around one third of our direct Cost of Sales has been spent with these producers.

In 2005 we changed the way in which we sell some of our composite products such as the "Geobar" which contain a mixture of developing world and UK sourced ingredients. These are now being handled by a third party who buys the fair trade contents from us and then sells the finished product under licence.

As the table shows, this means that a slightly lower proportion of our total costs is spent with producers from the developing world. (The balance of spend in Cost of Sales includes UK and European goods, duty, freight, UK manufacturing and packaging, etc).

Our aim remains that as high a percentage as possible of any product is sourced from the developing world, as long as this does not cause problems with commercial viability or risk food insecurity for the producers in question.

The difference to the producers

We are often asked "what percentage of the selling price of our fair trade products goes to producers?" and Table 2 above gives a feel for this (though we do not know what margin retailers and wholesales add to the purchase price therefore it is impossible to truly calculate this figure).

In reality of course, we sell many hundreds of different types of products and through several different sales routes – so this is just an average and the exact proportion for each product will be different.

Perhaps the key question though is "what difference does it make buying from Traidcraft as opposed to a non fair trade commercial brand?"

Again this question has a different answer for each type of product and especially on craft items it is very difficult to compare like-for-like.

However, taking key food products which Traidcraft sells, and looking at the percentage of catalogue price which goes to the developing world compared with high-street equivalents is illustrative of the difference.

Coffee

• Traidcraft sells its own label instant coffee and the proportion of the final selling price that goes to developing world producers is about 40%.
• Traidcraft also sells Cafédirect coffee (for example 100g jar) and the proportion here is around 17.5%, because the processing takes place in Europe.
• The proportion of selling price that goes back to producers from a typical non-Fairtrade coffee is only about 5-7%.

Chocolate

• Traidcraft sells its own brand chocolate (for example 100g Organic Swiss Plain). For this product about 10% of the selling price is spent in the developing world (because of high manufacturing costs which currently all take place in Europe, due to tariff barriers).
• A typical non-Fairtrade bar of chocolate would again contain only about 5-7% developing world content.

Back to information on trade.