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Growing the craft business –
options to consider
Lawrence Watson
IFAT Associate, and Lead Consultant
to the Asia Fair Trade Forum,
Shareholder - Citizen Dream
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Growing the business
• Craft business is flat or declining – but not
the food business
Why ?
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The Fair Trade Journey
Skills
Time
Economic
dependency
Economic
Independency
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Skill development must translate into
higher value added products
Low
Med
Hi
Value-added higher price
Development phases
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Low
Med
Hi
Different Customers,
Markets – and
probably partners
That means:
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Today
Low
Med
Hi
80%20%
0%
…….Charity
Purchase motivation
Existing split
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Tomorrow
Low
Med
Hi
…….Charity ……Value……..
Purchase motivation
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Different niches –
different partners
Low
Med
Hi
80%
20%
50%
30% ???
20% ???
0%
Potential future split
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Alternative Strategies
• World-Shops to retain their niche – with
improvements.
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Alternative Strategies
• World-Shops to retain their niche – with
improvements.
• Separate, mainstream niches to be developed to
move up the journey
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The Doi Tung Development Project
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Doi Tung
Union of Myanmar
93,515 Rai
(150 Sq. km)
Mae Fah Luang
Thailand
Laos
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1988
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Today
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Doi Tung Coffee
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Coffee Bean $ 2 Per Kilogram
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Roasted Coffee $ 10 Per Kilogram
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Arabica (Retail) $20 per Kilogram
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Doi Tung Coffee Shop $ 100 per Kilograms
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Price per Meter
$ 20
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Placemat made from
Vetiver Grass $ 5 per piece
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Products in Doi Tung Development
Handicraft Centre
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Siam Discovery
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The bottom line
• In 16 years the per capita income on the
project has gone from $ 80 pa…….
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The bottom line
• In 16 years the per capita income on the
project has gone from $ 80 pa…….
• ….To $ 800 pa.
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The bottom line
• In 16 years the per capita income on the
project has gone from $ 80 pa…….
• ….To $ 800 pa.
• Are we having a similar effect?
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Alternative Strategies
• World-Shops to retain their niche – with
improvements.
• Separate, mainstream niches to be developed to
move up the journey
• Develop the local markets – retail and wholesale
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Craft:
• Craft sales are in a crisis – food is not.
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Craft:
• Craft sales are in a crisis – food is not.
• Craft mainly limited to the FTO/NGO
network (north and south) – food is no
longer.
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Craft:
• Craft sales are in a crisis – food is not.
• Craft mainly limited to the FTO/NGOnetwork (north and south) – food is nolonger.
• Challenge # 1- can the movement (N and S)recognise the crisis – and react?
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Old business model
• The business model in craft (not food) is
essentially the same, now as “then”.
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The market
• We do not even know the size of the FT
craft market.
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The market
• We do not even know the size of the FT
market.
• ….but in Europe it is probably around € 100
million (retail value)
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The market
• Conservatively – the mainstream gift
market in Europe is around € 6 billion
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The market
• Conservatively – the mainstream gift
market in Europe is around $ 6 billion
• Exports from Vietnam alone are $ 400
million = RSP $ 2.4 billion
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The market
• Conservatively – the mainstream gift
market in Europe is around $ 6 billion
• Exports from Vietnam alone are $ 400
million = RSP $ 2.4 billion
• India is $ 1.5 billion = RSP 9 billion
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Some alternatives
• Northern FTO’s finance and set up a
separate “Craft Direct” wholesaler to
mainstream.
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Some alternatives
• Northern FTO’s set up a “Craft Direct”
wholsaler to mainstream.
• The “up-market” Fair Trade private gift
shops or mainstream wholsalers
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Alternative Strategies
• .
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Alternative Strategies
• World-Shops to retain their niche – with
improvements.
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Alternative Strategies
• World-Shops to retain their niche – with
improvements.
• Develop the local markets – retail and wholesale
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Alternative Strategies
• World-Shops to retain their niche – with
improvements.
• Develop the local markets – retail and wholesale
• Private retail initiatives
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Alternative Strategies
• World-Shops to retain their niche – with
improvements.
• Develop the local markets – retail and wholesale• Private retail initiatives
• Private or FTO-financed “Craft-Direct”
wholesaler - labeled products to mainstream