Discounters dent Fairtrade sales
Despite years of double-digit growth, Fairtrade posted a decline in sales of almost 4%, which it attributed to a consumer shift towards discount retailers.
Fewer Fairtrade products were stocked by the discounters than the big four retailers, which contributed to a fall in sales of 3.7% to £1.67bn, it added.
Aldi and Lidl now held more than 10% of the grocery market, according to Nielsen data.
The discounters had continued to draw cash-strapped shoppers away from the big four, which stocked a wider variety of Fairtrade products, said ceo Michael Gidney.
‘Aggressive behaviour’
“Our main concern now is that increasingly aggressive competitive behaviour in the grocery sector could undermine the volumes farmers and workers are able to sell on Fairtrade terms,” he said.
“This will result in real losses to hardworking families and communities in some of the poorest countries in the world.”
Sales of Fairtrade tea and cocoa fell by 1% and 2% respectively last year, despite efforts from the likes of retailers Waitrose and Marks & Spencer to innovate in the sector.
“For the first time in our 20 year history, the traditional grocery market has been contracting, and the value of food spending is declining,” Gidney said.
Given Fairtrade’s rise as a mainstream brand, it wasn’t surprising the retailing crisis had had an effect on the organisation’s sales, he added.
3% in sales volumes
However, some Fairtrade products had performed well, including bananas, which grew by 3% in sales volume last year. This was, in part, attributed to Tesco relisting them, said Gidney.
In a bid to reverse the decline, the organisation had developed a number of solutions, which would allow retailers to more easily and cheaply source Fairtrade products.
Attracting more large brands, such as Mars, to work with the foundation was also on the agenda, revealed Gidney.
Mars had struck a Fairtrade sourcing programme for the cocoa used in its Mars Bar, he added.
“Business appetite to collaborate with Fairtrade remains incredibly strong,” he added. “The move means that four of the UK’s top chocolate brands are now directly working with Fairtrade certification.”
Meanwhile, read the March issue of Food Manufacture to find out what the supermarket price wars will have in stall for food manufacturers in the future.
An Aldi spokesman said: "Fairtrade is important to Aldi, as it enables us to deliver great value in a sustainable way.
"Aldi is committed to responsible behaviour and integrity, and we work closely with all our suppliers to ensure that everyone in our supply chain is treated fairly and guaranteed their human rights."
A spokeswoman for Lidl said: "As an international retailer, we are aware of the responsibility we have when producing our products and we decide to introduce a number of Fairtrade products to our range in 2007.
"This range has been growing ever since and currently includes chocolate, coffee, wines, bananas, cookies and sugar."
