Sales of Ethical Consumer Products in the US: Foods and Beverages - Research Paper Example

Academia- Research d 24th November 09 Prospectus of Fair Trade products in Recession 'Fair Trade' products are just priced products mainly agricultural based such as bananas, cocoa, coffee, cotton, flowers, fresh fruit, rice, herbs and spices, sugar, tea and wine. This is well organized and trusted product range popular in most of American and European markets. In spite of recession set in this part of the world since 2008 Fair Trade has been struggling to maintain its position in the market. They have earned a 23% rise in the worldwide sales with annual sales of over $4 billion for the year 2008. Fair Trade consumers are located in the US and Canada, Europe, Australia and New Zealand, and Japan, where a rise of 44% in sales are noted in 2008. South Africa and Mexico are other growing markets for this label Fair Trade brand belong to FLO Germany. They licence other outlets to sale this brand and provide all sorts of support. The brand has entered the growth phase from its low neigh position in 2000. The brand is well recognised for its value and has been darling to the global consumers. There are over 6000 Fair Trade certified products from 60 countries available to buyers at present. About 1.4 million people are engaged in producing goods and commodities for fair trade. Many global companies are introducing 'Fair Trade' in their network and included it in their procurement list. The retailing giant Tesco in UK has introduced Fair Trade successfully in its outlets. Starbucks, Ben and Jerry's, Candico Sugar and Cadbury's chocolate including Fair Trade certified ingredients into their mainstream products. These big brands don't take Fair Trade as competing product but accept it readily in their shelves. The brand Fair Trade is so strongly embedded in the minds of consumers that they prefer buying this brand on the price this is sold as they perceive it as Fair and value lade, Other brands are match their prices to that of the prices offered by Fair Trade. Price differential between the Fair Trade and non-Fair Trade is gradually narrowing in favour of the former. There are doubts expressed in some quarters that Fair Trade is also not able to maintain its pre recession position in recession period. Fair Trade is not recession proof. The industry which was growing at a rate of 40-50 percent per annum for about last nine years is gradually slowing down particularly in the traditional retail market. But the fact is that big brands which are slowing down have courted the Fair Trade outlets for a place. This trend is an indication to the Fair Trade to remain firm during recession. Fair Trade suppliers who are mainly growers get losses on account of the currencies of their country being devalued that results in their payment to be lower in return of their supplies. Ruben Ravera, spokesperson for the Argentine Fair Trade Network, is among those who see a gloomy outlook. According to him it is very likely that because of economic contractions "the consumer's commitment to fair trade will decline," According to Latin America regional director for the World Fair Trade Organisation, some groups that sell in Europe, Canada and the United States have reported a five-percent decline for last year. Love for ethical products thrives even in the period of recession. This has been found in one important research conducted by a research organisation. Ethical food and beverage, personal care and household products that fall in the ethical products and certified as organic food are frequently purchased by adult shoppers in United States and remain ready to pay more. Recession does not bother them. The survey indicates that more shoppers understand the environmental, social, and economic implications of their choices. Sizeable number of consumers who will purchase typically more expensive ethical products even in economically challenging times are from the country that is most affected by recession. According to the report from Packaged Facts forecasts, for last five years US market for ethical products has been growing up and is projected to grow up to about $38 billion by 2009. The market is likely to grow up to $62 billion by 2014. Foods and beverages dominate retail sales of ethical consumer products in the U.S., accounting for nearly 75% of retail dollars through all channels in 2009. Non-food products-mainly personal care and household products-represent the remaining quarter. However, through 2014, Packaged Facts projects that non-foods will grow at a considerably faster pace than food, with an 80% versus 57% growth rate. Nevertheless, non-foods will still represent a smaller portion of the overall market. Tapping into the trend are major marketers and retailers who are offering more ethical products, upping their corporate responsibility efforts through energy-efficient "green" facilities and sustainable business practices, and increasing their cause-related marketing efforts. Meanwhile, supermarket chains are entering the fray by developing private-label lines of organic foods and natural household products. There are a large number of affluent Americans and many rich people in other parts of the world who are not bothered about recession. They remain engaged in making, borrowing and spending money to buy any thing of his choice. Fair Trade products attract them because they are favourite organic products which bother about green and environment which is in fashion today. Male products as shaving cream, gel, cream, body wash, deodorant, moisturizer and other grooming items are favourites and these affluent classes of people are ready to pay any price irrespective of recession. Ethical grocery products are ready to make headway in the market, and demand is increasing for eco-friendly, natural, organic and humane products that are fairly priced in contrast with the market for conventional groceries. Food and beverages products that offer health advantage beyond basic nutrition value and therapeutic benefits are preferred in the market and continue to drive pushed up by the specific marketing positioning for the specific class. Thus recession has no sizable affect on the health -oriented, organic specific products of Fair Trade kitty. Fair Trade is likely to outlive the recession and and touch a new height in future. Dr Davies. Iain, Fair Trade in the Recession www.cranfieldknowledgeinterchange.com/kihtml/.../Transcript.pdf http://www.ipsnews.net/news.aspidnews=45840 LATIN AMERICA: Recession Challenges Fair Trade by Diego Cevallos* - IPS/IFEJ Recession Challenges Fair Trade - alt.fan.noam-chomsky | Google Groups groups.google.com/group/alt.fan.noam. Jenn Tekin Packagedfacts.com jtekin@packagedfacts.com Packaged Facts: Despite Recession, the Market for "Ethical ... 5 Oct 2009 ... New York, October 5, 2009 - www.packagedfacts.com/about/release.aspid=1476 http://www.complusalliance.org Read More