Two pieces of encouraging news - one out of Europe and the other from the U.S. - for the followers of what are widely seen as indicators of ethical consumer food trends.
In the first, the London-based Fairtrade Foundation released new research showing that global Fairtrade sales grew by 22% in 2008 as consumers spent an estimated 2.9 billion Euros on Fairtrade products.
In the second, the U.S. Department of Agriculture (USDA) published its analysis of direct-to-consumer food marketing from farms that showed a more than doubling of sales over the period 1997-2007.
Star performers in global Fairtrade certified products were tea, with sales more than doubling last year (up by 112%), and Fairtrade cotton products (sales up 94%). But the biggest Fairtrade products by volume remain coffee and bananas.
Fairtrade sales grew more than 50% in seven countries in 2008 (but from small bases in some cases); these included Australia and New Zealand (72%), Canada (67%), Finland (57%), Germany (50%), Norway (73%) and Sweden (75%). The largest Fairtrade market in the world is the UK whose sales of Fairtrade certified products increased 43% to 881 million Euros. Perhaps the disappointing news was from the U.S. which only managed a 10% increase in sales, but still remains the world's second largest market by value with sales of 758 million Euros.
The USDA analysis is based on data collected as part of the 2007 Census of Agriculture and although it shows farm direct-to-consumer sales growing by 104.7% over the decade to 2007 (compared to total agricultural sales only increasing 47.6% over the same period), using a special statistical calculation that takes into account agricultural sales that could not go directly to consumers, the USDA still estimate these direct-to-consumer food marketing sales to be only around 0.8% of total comparable agricultural sales.
Their analysis also shows marked regional differences across the U.S. in terms of the growth of direct-to-consumer food marketing from farms. The largest market, by value, is California with sales of $163m, followed by New York ($77.5m), then Pennsylvania ($76m). Growth rates over the decade in some states has been dramatic - Oregon, Wyoming, Vermont, Alaska, South Dakota, Colorado, and Mississippi all notched up growth rates in directly marketed sales of over 220%.
But as in other types of food markets it's the biggest players who gained the most market share by value. Total direct-to-consumer sales in 2007 added up to around $1.21 billion. But farms with more than $50,000 in direct-to-consumer sales accounted for only 2.8% of the total number of farms which sold directly to consumers yet captured 58.1% of all sales ($703.5m). Farms with annual direct-to-consumer sales below $5,000 accounted for 11.7% of sales ($114m) while representing 77.4% of farms engaged in direct marketing. Put another way, of the 136,817 farms involved in direct-to-consumer food marketing, 105,944 managed total sales of $135.2m while the remaining 30,873 farms took home around $1.08 billion.
While the Fairtrade and direct-to-consumer farm sales demonstrate consumer interest in these marketing practices, they remain stuck in the niche category. For example, the direct-to-market sales is not even close to 0.5% of total U.S. food retail sales.
These aggregate figures are also frustrating because they raise so many other questions - for example how does the direct-to-consumer farms relate to trends towards local foods; or how do Fairtrade certified products stack up against other labeling systems such as the Rainforest Alliance? Is the ethical Fairtrade consumer also the local consumer who likes to buy from farms directly? And of course the crucial economic questions remain: how far can these niches be scaled up without losing their point of differentiation and as markets grow how can the viability of new entrants and existing businesses be maintained and developed?
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