Fracas brewing over Fairtrade coffee

The two largest coffee roasters in the United Kingdom, Nestlé and Kraft Foods, are planning to launch their own ethically aware brands next year in the hope that some of the success enjoyed by Fairtrade-certified products will rub off on them.

The United States food combine Kraft — which owns Kenco, Carte Noire and Maxwell House — is preparing to add a brand likely to be called Kenco Sustainable Development to its regular product lines on supermarket shelves.

Kraft is proposing to pay farmers who adhere to its ethical criteria a 20% premium on the price of green coffee beans on the open market, which this year was about $1,43 a kilogram. The payment would be significantly less than the flat rate of $2,66 paid to farmers under the Fairtrade scheme.

Kraft’s plans have outraged the Fairtrade Foundation, set up 12 years ago by a group of charities that saw multinational roasting firms squeezing profits made by small-scale farmers in the developing world. About 70% of coffee comes from small farms.

Fairtrade believes a proliferation of rival certifications could damage the consumer appeal of the niche market for coffee produced to high ethical criteria.

“We think it is bound to confuse people,’’ said the foundation’s deputy director, Ian Bretman.
“When people suggest these initiatives are ‘like Fairtrade’, we have to point out they are, in fact, not Fairtrade.’‘

Kraft is racing to beat market leader Nestlé to market with an ethically branded coffee. Nestlé,is understood to be preparing its own Fairtrade-style product under the Nescafe brand.

With the UK’s coffee consumption having shrunk by 2% in six years, the success of Fairtrade brands such as Cafedirect has been watched covetously by the multinational roasters. Nestlé and Kraft, have, however, refused to launch a Fairtrade-certified brand, despite lobbying from charities and a stream of requests from customers.

Instead Kraft, which also makes Philadelphia and Dairylea cream cheeses as well as Terry’s Chocolate Orange and Toblerone, has asked New York-based charity Rainforest Alliance to provide its cut-price ethical certification.

The US food company has already begun pilot marketing of Kenco Sustainable Development to the British catering trade. It plans to double the amount of ethical coffee it buys to more than 6 000 tonnes next year.

One draft marketing statement for Kenco Sustainable Development reads: “By having their farms independently certified as being on the path to sustainability by the Rainforest Alliance, the farmer gets more value for his coffee, manages a farm he can be proud of and increases his independence on the open market.’‘

Shown this statement and others, Bretman said: “It all looks rather aspirational to us. I don’t see how you can separate environmental sustainability from economic sustainability. If people are not making enough to send their children to school they are not going to be preoccupied with long-term issues around damage to the environment.’‘

Asked why Kraft is proposing to offer farmers substantially lower returns than the Fairtrade scheme offers, the US company said: “We believe the majority of consumers are not willing to take the premium we would have to charge if we were to convert to the Fairtrade system.’‘

Nestlé said: “We believe in a sustainable approach to coffee production and ... aim to reflect our beliefs in our product development. Nestlé is always looking at ways to innovate and re-energise products.’’ — Â

Client Media Releases

Fempreneurs shine during EWP gala event
Might as well face it