consumer attitudes to ethical trading fdin fairtrade conference 20th february 2008

Consumer attitudes to Ethical tradingFDIN Fairtrade Conference

20th February 2008

• The ethical shopping experience

• Understanding of Fairtrade and ethical marks

• Shades of Fairtrade

• Expectations for fair trade

• Issues and strategies for large brands

• Issues and strategies for small brands

contents

© Dragon 1 Craven Hill London W2 3EN +44 (0)20 7262 4488 2


Research and experience

• Previous research and experience working on ethical and responsible branding challenges for a range of clients.

• 6 groups in 2007 looking at sustainability, ethical branding and Fairtrade

• 2 groups in 2008 focusing on Fairtrade

• Recent work developing a Fairtrade proposition for a historic british brand

Research and practical application


Why Fairtrade

An ‘affordable’ added emotional benefit

“If I buy 4 things and it’s a

couple of quid on a

£70 bill then I don’t notice”

“I don’t mind spending

another 20 or 30p

on coffee or bananas”

“it’s the ethical thing to do”“Its like giving a bit more to the people who need it”

The ethical shopping experience


Guilt…

• As a result of growing awareness and understanding of the issues consumers feel a lot of guilt when shopping

“I think people, I know I do, feel constant guilt”

“If you think, Oh the other coffee is cheaper you feel guilty”

“the ethical thing to do is to buy Fairtrade”

Shopping for the aware is an emotional experience


… and confusion

“Do you choose the organic or the Fairtrade one? What do you do?”

“You have to have different priorities for everything that you buy. You have to go through a process of prioritising whats in the shops, what you need and what your present state of knowledge is”

“ I heard that Organic cotton uses so much water the local people don’t have enough”

“You need to take a PhD to get any sort of measure of getting it right”

Confidence in the end benefit is difficult to find

•Mixed choices, complicated shelf


A complicated buying process

“I think it’s the responsibility of the manufacturers to really take that guilt and choice away from us and really offer a good range of Fairtrade products, because how are we meant to know you know”

“Priority depends on the product or if there is an alternative available”

“I keep thinking of that program “A Good Life” well we should do that because it would take a full time effort to actually ethically shop properly”

“I try to strike a happy medium”

That they need you to make easier


Seasonal balance

• Consumers try to strike a balance between Fairtrade and seasonal food.

• Consumers would ideally like to buy more seasonal food.

“if you know its local then its likely to be seasonal”

“we are quite used to having so much choice so you try to limit yourself

• But in reality it is often impractical

“well if we wanted to eat seasonally we would be eating turnips right now”

“we all buy bananas and so we should, they are good for us”

“if its out of season I buy Fairtrade”

If you can’t grow it here then it should be Fairtrade

Seasonal veg, turnips


Understanding of Fairtrade

• The protected price is the most understood aspect of the Fairtrade guarantees.

• Active buyers had a deeper understanding of the Fairtrade premium and the sustainability commitments.

• Both groups of consumers struggled to accept and understand the Fairtrade guarantees of a closer link between consumers and producers and a stronger position in world markets for small farmers.

“I don’t know what that means”

“I don’t believe that”

• The most important was guarantee the price commitment and closely followed by greater respect for the environment.

“I don’t think it bothers me if there is a clear link or not”

Price and sustainability are most understood and

valued aspects


Understanding of Fairtrade

• When pushed passive buyers showed a limited understanding of how Fairtrade worked.

“it’s a way of cutting out the middle man”

“I’m not quite sure but I trust it, so I’ve not really looked into it that much”

• The Fairtrade mark has established enough trust that consumers don’t feel the need to interrogate the details of the Fairtrade promise.

Happy to buy despite not knowing the detail

•Hand picking up Fairtrade or something showing trust


Local Fairtrade

• Consumers can get a similar emotional/ spirtual benefit out of buying local food.

“buying locally is like a form of Fairtrade”

“It avoids the power of the supermarket, the local farmer is allowed to decide what he grows, be independent and set his own price”

• Both local and ethically traded food have add a human dimension to the buying experience

Respect for who and where our food comes from


Rain Forest Alliance

• Low awareness of and poor understanding of Rain Forest Alliance

“I’ve never seen it”

“I’d be interested if I saw it but I’ve never seen it before”

“its to do with wood”

“replacing trees that they cut down”

• Consumers are trusting but suffering from label fatigue

“I trust all of them”

“I think it’s a step too far for me”

“I’m trying to be so worthy with my shopping”

Limited understanding but good potential

•RFA logo


Rain Forest Alliance

• Consumers see having different marks as creating unnecessary competition

“I don’t understand why you need two companies why can’t they just join forces?

“It feels like competition, and the word competition shouldn’t come into it”

• Seen as easier to obtain than Fairtrade

“they couldn’t get Fairtrade”

“Fairtrade, they should have got Fairtrade on it because that’s what it means”

“Fair trade is very hard to get”

What is differentiated role?

•RFA logo on PG tips


Soil Association Ethical Trade

• General lack of awareness and confusion with the original organic logo

“ I haven’t seen the ethical bit before”

• Strong general trust of the Soil Association mark

“I’d trust the soil association”

“If it was organic I would probably go for the organic instead of the Rain Forest Alliance”

Trusted but too subtle


Shades of Fairtrade

• Consumers do perceive different degrees of Fairtrade and ethical trading depending on the partner brand.

“I didn’t know Nestle did Fairtrade”

“Nestle are just cashing in on Fairtrade”

“it means turning around their business practices and not just jumping on the bandwagon and marketing to a particular target group”

• The Fairtrade logo might support re-appraisal but is not enough to overcome other brand perceptions.

No short cuts


Ethical Ranking

Individual brand reputation a powerful driver, even with

ethical accreditation

•Most Ethical

• Trust known ethical brands first

• Mistrusted large known brands last

• Retailers and un-familiars in the middle

• Organic and Fairtrade seen as more ethical


A role for trusted leadership brands

• In this space of a lack of a clear path forward, confused messages, lack of information. There is space for a brands with a clear vision to lead consumers and win their trust and loyalty.

Fortune favours the bold


Navigation and choice editing

• There is an opportunity to simplify the buying process for the consumer and provide a clearer navigation of the ethical categories.

“some kind of system that says this is in this is out”

“people don’t have a lot of time so the information needs to be really accessible. If it was in the shop then that would be just amazing”

“They should mark the products that aren’t Fairtrade”

Make it easy (convenient) do consumers to get the

benefit


Change what is in front of us

• The primacy of consumer choice is changing. Its cumbersome and ineffective in delivering the optimum range.

“If you go to French supermarkets they’re not the same as British supermarkets, they don’t have so many ready meals or imported goods, why can’t we be more like them?

“A range of Fairtrade things at a fair price”

Take responsibility for the choices on offer

Wide selection


Whose Responsibility?

• Irresponsible business is unacceptable. Brands are expected to play their part in our society

“we are reaching the point where it can’t all be about profit”

“Its not really my responsibility, Its Tesco local and the retailers responsibility to pay a fair price”

“the industry should point things out and make people aware”

“That’s their business, they should do it in the most honest and straight forward way”

“Why should we pay 20p, let them pay 20p (retailers)”

Common theme: reframe the role of your business


Future of Fairtrade

• Consumers are very open to more Fairtrade products. In fact they expect it.

“everybody should be paid fairly”

“I want to see everything as fair trade”

“I’d like to see all commerce being fair trade”

“If you see Nestle doing it then anything is possible”

Mainstream opportunity


Size matters

• Consumers naturally distrust larger organisations and strive to support smaller independents.

“Its better not to buy the big names because you give them too much power”

“Nestle, you feel like they are taking over the world

Mistrust of centralised power


Mainstream paradox

• Consumers welcome more Fairtrade products but instinctively mistrust the motivations of large successful organisations

“They are part of the problem in the first place”

“If it indicates a big change in their processes then it’s a good thing”

“There is part of me that feels it actually devalues the Fairtrade logo, because there is a part of me that can’t believe they can be an ethical company”

“I used to buy Nescafe and stopped a year ago to buy Fairtrade. Now I’ve seen that (Partners blend) I might go back”

“I don’t feel cynical at all, I think job well done”

Have to work twice as hard to prove credentials


Issues facing big brands

• Huge lack of credibility to overcome

“Where is the logic, why can’t they have fair trade for all their products? If they believed in it why can’t they do it across the board?”

“They’ve got to make quite an effort to convince me that they mean it and its not just a marketing ploy”

“Its just tokenism”

• Opportunity exists for brand, consumer and producer

“they might gain some respect”

“Ironically they might be the ones who spread it to a wider number, it’s a difficult one”

If you aren’t part of the solution….


Strategies for big brands

1. Bring Fairtrade to the masses. Opportunity to deliver fair trade across mainstream everyday products at an ordinary price.

2. Prove your commitment. Launch fair trade across the whole range. Are your other products “unfair’? If you can’t explain your intentions, that you are on a journey and commit to paying a fair price anyway.

3. Redefine your proposition. This is part of being a modern brand. Evolve your values to be more responsible (read quality/ modern).

4. Reap the rewards. Tie your new found responsibility into the brand benefit.

This can’t be ignored and has to be addressed with

integrity


Issues facing small brands

• The most trusted but what role is there for the pioneer brands as the Fairtrade becomes mainstream?

“I do buy Café Direct but now I’m thinking about going back to Nescafe”

“The main thing that springs to mind is a kind of a loyalty thing”

“It would be a case of playing on we are the original”

“They’ve been beavering away at it whilst the others have been up to all sorts of shit. How many people are going to care about that after a few years of Nescafe doing Fairtrade”

“We trust them”

Ethical is no longer a differentiator


Strategies for small brands

1. Excel at key category benefits. Delivering against taste, quality, cost, convenience, performance etc is essential.

2. Take it to the next level. Innovate and lead on the issues in a way that larger brands can’t follow.

3. Evolve your proposition upwards to offer a spiritual or lifestyle benefit that can relevant in different ways. Tie it into the ethical approach to build an ownable support for the proposition.

4. Focus. Build loyalty amongst a niche group of core consumers. Educate, inform and develop advocates.

Evolve or die

time to trade fairlyLuke Vincent [email protected]

Telephone +44 (0)20 7262 4488 www.dragonbrands.com

consumer attitudes to ethical trading fdin fairtrade conference 20th february 2008

Documents

understanding of fairtrade

fairtrade seasonal

fairtrade shopping

fairtrade guarantees

fairtrade proposition

fairtrade premium

fairtrade mark

fairtrade promise