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As In-house Sustainable Sourcing Schemes Soar, Will Fairtrade Fade?

In-house sustainable sourcing programs may offer more benefits to large food companies and retailers than third-party standards such as Certified Organic or Fairtrade, according to Ecovia Intelligence. Apart from providing greater control and less bureaucracy, such schemes can easily be integrated into a company’s wider sustainability programs. Ecovia says such independent sustainable sourcing schemes are gaining traction, but that there is concern about in-house schemes among some companies because they are not subject to the same scrutiny.

Chocolate brand Green & Black’s, for example, launched a new Velvet Edition bar this month in the UK. It is its first product that is not Certified Organic and/or Fairtrade. The brand decided to source cocoa beans from the Dominican Republic according to its parent company’s Cocoa Life sustainability program. Mondel?z Foods has already dropped Fair Trade certification for its Cadbury’s Dairy Milk chocolate. By 2019, all Cadbury’s chocolates in the UK and Ireland will carry the Cocoa Life logo, Ecovia reports.

Also in the UK, Sainsbury’s recently decided to drop Fairtrade certification for its private label teas. The supermarket chain decided to work directly with African tea groups and co-operatives to develop its own ‘Fairly Traded’ scheme. Sainsbury’s is one of the largest retailers of Fairtrade products in Europe. The company’s Fairly Traded scheme may also be extended to its private label coffee, bananas, and other products.

Similar developments are taking root in the cosmetic and personal care industry. L’Oreal received the Sustainable Beauty Award last year for its ethically sourced quinoa husk extract; the ingredient is a by-product of quinoa that is sustainably farmed by Bolivian farmers. The cosmetics brand Lush sources raw materials according to its own ethical charter. Although many of its ingredients are Fairtrade and/or organic, the company prefers not to adopt third party standards.

Ecovia says the number of third party standards or charters is continuing to grow, especially for single ingredients. The Roundtable for Sustainable Palm Oil (RSPO) is now highly established for palm oil. New sustainability roundtables have now been developed for soya beans, beef, cocoa and cotton. New schemes are also emerging for non-agricultural commodities. For instance, the Responsible Mica Initiative was set up in February to ensure mica mineral is ethically sourced from mines in northern India.

Some Voice Concerns

With growing proliferation in sustainability standards, charters and similar schemes, it is perhaps not surprising that companies are opting for in-house schemes. The concern among organizations like Oxfam GB is that companies like Mondel?z Foods and Sainsbury’s are adopting third party standards as a “rite of passage” into sustainable sourcing. The knowledge and expertise gained is then used to develop their in-house sourcing programs which are not subject to the same scrutiny as independent schemes, says Ecovia. Another concern is consumer confusion. “There is a risk of shoppers being left confused as some brands and retailers move away from the Fairtrade scheme to introduce their own certification schemes. With the Fairtrade mark on products, consumers are clear about what they are getting,” said Rachel Wilshaw, ethical trade manager for Oxfam GB (via The Guardian).

The Guardian article states that such in-house programs will “further undermine the Fairtrade movement.”

And Yet Fairtrade Is a Partner…

In response to Green & Black’s new product launch, however, the Fairtrade Foundation released a statement earlier this month pointing out that the Fairtrade Foundation is actually a partner in the chocolate company’s in-house Cocoa Life program. The organization maintained that “as a part of the partnership we are bringing our expertise of working with farmers to support the sustainability scheme across the previously Fairtrade certified Cadbury Dairy Milk range, all other Cadbury chocolate and the new Green & Black’s Velvet Edition range.”

When the Fairtrade Foundation announced its global partnership with Cocoa Life in 2016, it said it was a $400 million program which aims to reach 200,000 cocoa farmers by 2022.

Whatever the Certifcation, Sustainable Products Soar


Although critics question the commitment of large companies, Ecovia Intelligence believes a positive is that more raw materials are now sustainably sourced. Sustainable coffee now has a market share of over 30% of total coffee. Starbucks is the leader with its Coffee And Farmer Equity (CAFE) program. The market share of sustainable tea and cocoa is also above 20% because of similar commitments by large companies. Whether the future is with third party standards or in-house schemes, the market share of sustainable ingredients is only going in one direction.

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