I shared a panel on sustainability with two very smart guys: Peter Thum of Ethos Water and Andy Ruben of Wal-Mart. Part of our discussion centered on the relationship between NGOs (like TransFair) and industry. Simply put, while we both think about consumers, NGOs focus on environmental and social well-being (aka impact), and industry focuses on business well-being (aka profits). When these objectives align, great things can happen for consumers, workers, and the planet.
In another panel, Stephen Quinn (also of Wal-Mart) stated that 70% (!!) of purchase decisions are made at the shelf. His on-stage partner, Dina Howell of Procter and Gamble, added that this is particularly concerning since there are more choices for consumers than ever. Giving consumers consistent, reliable tools for shopping comparison at the shelf has never been more important.
When you have Wal-Mart and Procter together discussing how to influence consumer choice, it doesn’t require much of a leap to imagine how sustainability would play out in a non-third party standardized world. They would no doubt define their own versions of “green” and “fair”, as well as their own systems for measuring impact. No matter how much we like particular brands, most of us don’t think that self policing works. Fortunately, both Procter and Wal-Mart - as well as firms such as Green Mountain and Whole Foods - are acknowledging the benefit of an independent, standardized system and engaging with NGOs to find the impact/business balance necessary for mainstream sustainability to succeed.
I’ve learned this isn’t just an issue with the aforementioned ‘big dogs’. Some smaller roasters and marketers don’t believe that third party certification is necessary. Several have come up with versions of “fair-trade” of their own, despite the issues of consumer confusion, trust, and the potential conflict between what’s good for business and impact. For Fair Trade to have greatest impact, a unified approach is needed. It is not about individual egos or agendas; it is about working together on a market-based model of sustainable, transparent commerce.
This approach includes a single transparent set of standards, third party certification, collective promotion, and participation in the funding of the system. The larger elements of the food industry have managed to work together (and with government and NGOs) while still competing. There is even a word for it – “coopetition”. Standard UPC codes, recyclability, pallet systems, and ingredient labeling are some of the results. Someday, I hope Fair Trade will be as well.
With Fair Trade capturing greater consumer interest, and so much decision making happening at the point of sale, I hope that the industry continues to stand behind a common label, provided by an independent and non-profit-driven certification system. Impact and commerce will grow, and we’ll all win.
Next week: Challenges in helping cocoa farmers – a report from the World Cocoa Foundation.