Q: Helen Barrett, Key Contact, Brixham Devon
What is Traidcraft’s policy on relationships with supermarkets, and is it a coincidence that profits are down as we deal more with supermarkets?
A: Larry Bush, Marketing Director
Supermarkets are a big part of everyday life in the UK and a big opportunity for us as they offer a massive scale for producers. For example, 20 million Geobars a year are sold through supermarkets at the moment. However, they also have a massive range of own-brand Fair Trade products in direct competition with us.
To meet this challenge we are reliant on Fair Traders to sell Traidcraft products independently of supermarkets. Customers needed to be encouraged to Go The Extra Mile by buying through Fair Traders. The sale of Salay and Swajan cards through M&S had only been possible because of ten years of support from Fair Trader customers to get the quality right for the mainstream.
Q: Anonymous Mail Order Customer (read out by Melissa Duncan)
Is there any danger of saturating the market with fair trade products (especially crafts) so that fair trade will become a hindrance rather than a solution? Would more diversification be good to promote?
A: Larry Bush, Marketing Director
No, we want everything to be Fair Trade! We need to be able to compete and the Traidcraft brand adds the most value. Craft has not opened up yet in the same way as food, but more Fair Trade goods available to buy is good news for producers.
Q: Helen Barret, Key Contact, Brixham Devon
M&S are charging more than Fair Traders but other supermarkets sell for less. Our customers feel ripped off and exploited by Traidcraft.
A: Larry Bush, Marketing Director
We understand the feelings of Fair Traders on this matter, which reflects the way supermarkets operate, and the economies of scale they bring to bear in their supply chains.
We need to note that this issue is what lies behind the common experience of small shops and convenience stores having to charge higher prices than supermarkets for the same branded products – differing cost structures will always lead to an ability for the supermarkets to undercut the prices of other channels of distribution.
As suppliers we cannot control the price the supermarkets sell our products at, but we do offer the best possible price to Fair Traders after taking into account the costs of packing and posting parcels to our Fair Traders, and we always try to ensure that Traidcraft branded products can be offered by Fair Traders at the prices they are expected to sell at in supermarkets.
We cannot always match the special and promotional offers put on by supermarkets, and sometimes they will even take less of a mark-up than expected on the standard prices they set for products, but on the whole we do not perceive there to be a large price differential between our prices to Fair Traders and those available in supermarkets.
We do however recognise that there are greater problems with Cafedirect and Divine branded products, because we ourselves receive less good prices from these companies than they give to bulk-buying supermarkets - even before taking into account the additional distribution costs we then need to bear.
Even with these non-Traidcraft products, however, we have been trying to at least match the standard prices at which these are available in supermarkets, reducing our margins considerably. As we set our prices for each catalogue, however, these can sometimes get rapidly out of date.
Q: Unknown questioner
Do Fair Traders have to sell at the price Traidcraft recommends, or can they choose what price to charge at?
A: Larry Bush, Marketing Director
Fair Traders are free to charge at a price that will work for them, whether above or below the standard catalogue price.
Q: Celia Drayton, Fair Trader, Filey
For the last 14 months Somerfield have been selling Cafédirect, in both old and new jars, at 10p more than Traidcraft charges
A: Larry Bush, Marketing Director
Yes, different stores set different prices and some try to charge a premium. This is an example of how supermarkets control their own pricing. Prices in the Traidcraft catalogue are a good guide on what the price should be.
Q: Ann Emery, Fair Trader, Donor, Huddersfield (read out by Melissa Duncan)
How does Traidcraft view the situation of ethical businessmen in the coffee industry who find the conditions attached to the Fairtrade mark too astringent?
A: Joe Osman, Sourcing and Producer Support Director
As a member of the Fairtrade Labelling Organisation (FLO) Standards Committee, I spent three hours in a meeting discussing this issue earlier this week. We agree that certification is over-complicated which is why Traidcraft releases me to attend these meetings and work for change.
I hope we can simplify the certification system to assist producers to develop, yet be distinctive from organisations like the Rain Forest Alliance who set more basic standards and do not always provide sufficient extra income to enable producers to comply with them without cost.
Q: Ann Dale
Traidcraft works with a diversity of people, yet this is not reflected in its supporter base. We’ve heard much about Traidcraft being a Christian organisation, yet Christianity is not the sole purveyor of Fair Trade and not all producers are Christian. Why do we not include black churches and other communities not motivated by faith who want to promote fair trade?
A: Chris Stephens, Chairman
Yesterday at our Board meeting we heard from our Church Relations Manager that traditional churches are reducing in scale by 9% per year, whereas new churches were increasing by 11% per year, and were barely represented amongst our supporter base. This was something we had spotted and were seeking to address.
A: Paul Chandler, Chief Executive
This room was not typical of our supporter base as a whole. Delegates to the conference had the time and resource to attend, but there were many other younger supporters with children and other commitments who could not be here.
Yes, most customers were white middle class activists who could afford to buy Fair Trade and the church was our bed-rock. We were totally committed to working with people from all faiths and none, and many of our producers had different religious backgrounds. We would love our supporter base to be more diverse but this linked in with the challenge to address poverty in this country.
Our Church Relations Manager has been meeting with representatives from newer churches and black churches, but has found that their focus tends to be on evangelism and sending money back to families overseas.
A great number of people from non-Christian and other faith backgrounds still supported us in achieving the same outcomes and we are as welcoming as we can be.
Q: Janet Murchie, Fair Trader, East Peckham (read by Melissa Duncan)
I am a Fair Trader and put in an order once a month. As you now have a good computer system, if I order something and it is out of stock, would it be possible to keep it and add to my next order?
A: Mags Vaughan, Operations Director
We do have an enhanced computer system and we are often asked why this does not have a back order system. The reason is the differing stock availability situations.
Our primary focus has been to improve stock availability. We will be upgrading the system in the next 12-18 months. A facility for processing back orders is on the list of things to think through, but it would only be available on certain ranges.
It is complicated to explain and difficult to understand, but many non-food items are not repeated once a batch is sold off and the system would need to factor in the variations.
Q: Elaine Barbour, Key Contact, Bewdley
As customers become more concerned about the environment and seek to live simpler lives with fewer possessions should we be generating more ‘stuff’?
Craft items are good, but should we focus on everyday items rather than ornamental and unnecessary ‘stuff’. Since MakePovertyHistory people are buying less gifts, and more ‘gifts for life’.
A: Chris Stephens, Chairman
This point is noted, and we have been diversifying the types of product we offer for the reasons you state. Ultimately, however, our product range has to be based on what people actually buy from the catalogue, and our current ranges do remain popular.
Q: Unknown questioner
I understand that the ANC hub is in Stoke and orders often go down there and back again before reaching their delivery address. Is this not bad for the environment?
A: Mags Vaughan, Operations Director
ANC have a number of hubs, but the main one is in Stoke. We routinely talk with our carriers about such issues. ANC have been taken over by FedEx who are looking at the whole UK network and it seems likely that Gateshead despatches will go via Gretna in future, which is nearer than Stoke.
We are encouraged that FedEx seem to want to minimise vehicle miles and to do this in the most environmental and cost effective method. We are working closely with them to understand the implications of the take-over.
Q: Unknown questioner
Our deliverer works for a small organisation sub-contracted by ANC. He is serious considering leaving this organisation because good practices at ANC are not replicated further down the supply chain. How far down the line does Traidcraft ask questions?
A: Mags Vaughan, Operations Director
We have been concerned for a number of years of the need to assess UK supply chains. Paul Chandler mentioned in his review that we have invested in some new roles at Traidcraft, and one of these is an Ethical Sourcing Manager, whose task is to work more closely with organisations like ANC and ask questions.
It is an aggressive sector and there are a number of indications that practices in the industry differ between sub-contractors. Traidcraft is not a significant player, but we do punch above our weight and we are working toward a fresh outlook.
FURTHER QUESTIONS PLACED IN BOX (typed as written)
Q: A Austin, Shareholder, Fair Trader, Watford
I appreciate the good packaging for food deliveries, but have you considered alternatives to the crunched up paper used? Although it can be recycled, paper recycling is not the most environmentally friendly form available.
A:
The way in which we pack our parcels, and the environmental impact of the materials we use, is kept under constant review. We are very conscious that there can seem to be a lot of cardboard and paper in our parcels, but this is essential if goods are to arrive with Fair Traders and Mail Order customers in a good condition.
It is our view that the ex-newsprint paper and recycled cardboard we use are more environmentally friendly than the alternatives available, such as polystyrene chips or plastic poly-wrap.
Q: Gillian Graham, Fair Trader, Belfast
If I was an outsider looking in at this conference I would say that apart from staff this organisation is supported by church going people of a certain age. I admire them for being committed but you need younger blood - to show the public face of the organisation.
Fair trade is a much wider concept and can reach a much wider audience and to people of other faiths of none. To be honest, although I am a Fair Trader I feel a bit alienated from an organisation whose main volunteers/supporters are from an older age group in the main. They are mostly women/men who are retired / don’t need to rely on an income.
I am a single person in my early forties who knows for certain that there are opportunities to develop fair trade in my area / region and you should as a business be picking this up. Perhaps Sainsburys or M&S might listen.
A:
Fair Traders come in many shapes and sizes, and not all are the sort of people who have the time or inclination to attend conferences.
It is not surprising given the importance of our church base and the demographics of church membership that many of our supporters and Fair Traders are indeed women “of a certain age” – who have always been our most dedicated and energetic supporter group.
The age group of our activists also reflects the fact that younger supporters often have families and other commitments giving them less time or energy to run Traidcraft stalls.
Nevertheless, we are recruiting greater numbers of younger Fair Traders, and increasing numbers of youth groups, schools, colleges and businesses are also becoming Fair Traders or opening “Caterer” accounts – meaning our supporter base is becoming much more diverse.
We do what we can to identify and follow through business opportunities around the UK, but as a small organisation we cannot expect to do everything! We are active however in encouraging retailers like Sainsbury’s and M&S to list Traidcraft and other fair trade products, and we are seeing increasing success in this area.
