Alex Nicholls & Charlotte Opal
Fair Trade is at a crucial moment in its evolution from alternative trading mechanism to mainstream economic model. This timely and thoughtful book looks at the strategic future for fair trade. Each chapter spearheads a key area of fair trade thinking and theory and the political, legal and economic context of fair trade is given careful scrutiny. Difficult questions are tackled such as
- `What is the role and value of corporate social responsibility?'
- `What is the brand meaning of fair trade?'
Throughout, Fair Trade: Market-Driven Ethical Consumption supports readers by:
- Revealing case studies and useful data analysis;
- Concise histories of different fair trade organisations;
- Chapter summaries and conclusions.
"Today, Fair Trade finds itself at a crucial point in its evolution from alternative trading mechanism to a mainstream economic model. As the only certifier in the largest Fair Trade market in the world, TransFair USA has observed the explosive growth in consumer awareness and business interest in Fair Trade certification. New research into the progress of Fair Trade to date and, crucially, its key future directions is urgently needed. Fair Trade is therefore a valuable and timely contribution.The range and depth of the book is considerable. It is international in outlook and engages with a broad spectrum of theory and thinking. Its style is approachable yet rigorous. I would strongly recommend it to industry, academics, students, policy-makers and the interested reader in general"
- Paul Rice, CEO, TransFair USA
About Alex Nicholls & Charlotte Opal
Biographies at the time of publication of the book:
Dr Alex Nicholls, PhD (King's College, London) and MBA (Saïd Business School, University of Oxford), is a university lecturer in Social Entrepreneurship at the Skoll Centre for Social Entrepreneurship within the Saïd Business School, University of Oxford. He has worked extensively on Fair Trade as a writer and researcher for the last five years and has published articles and spoken at international conferences whilst continuing to teach and research on the topic.
Charlotte Opal, M.Phil and MBA (both as a Rhodes Scholar at Oxford University), is the New Products Manager at TransFair USA, the Fair Trade certification and marketing agency in the USA. She has worked in Zambia, Swaziland, Mexico, South Africa, and Belize and at the World Bank headquarters in Washington, DC.
Table of Contents + Chapter Abstracts
Chapter abstracts have been copied from the publisher's website.
Part One: The Rise of Fair Trade
- Chapter 1: Fair Trade: The Story So Far - This chapter maps out the historical development of the international Fair Trade movement. The economic and social drivers behind the emergence of Fair Trade are then delineated and key objections to it explored. Fair Trade's aims and impacts are then outlined. The chapter concludes with a brief discussion of the likely future directions for Fair Trade.
- Chapter 2: The Economics of Fair Trade - Fair Trade is a development tool that uses existing capitalist supply chains to return more income to producers. It does this through improving tree-market mechanisms as well as through non-market measures such as price floors. This chapter will outline the developing country market failures that Fair Trade attempts to address, and explain how Fair Trade pricing works within Fair Trade supply chains. It then outlines some positive externalities of Fair Trade that may not be measured through typical economic analysis, and examines whether or not Fair Trade represents an efficient transfer of wealth to impoverished producers.
- Chapter 3: Supply Chain Ethics - This chapter explores the nature of the ethics of supply chain management as a context for the rise of Fair Trade. Firstly, it fills in the background to the current ethical discussion of supply chain actions and secondly, the nature of corporate responsibility in supply chains is reviewed. This is followed by a discussion of the philosophical frameworks that may be applied to supply chains and their analytical implications for Fair Trade. The key issues of social justice and human rights are explored in terms of their relationship to trade. Finally, business responses to the emerging ethical agenda are considered.
Part Two: Fair Trade Operations
- Chapter 4: Fair Trade Industry Structures and Business Strategies - This chapter analyses the structure of the coffee and banana industries and outlines the development of Fair Trade in each industry's supply chain. It then describes the business structures, missions and strategies of leading alternative trading organizations (ATOs) that were amongst the founders of Fair Trade, using case studies as examples. Finally, the interaction between ATOs and traditional players as they compete in an increasingly mainstream Fair Trade market is discussed.
- Chapter 5: Financing Fair Trade - This chapter reviews the role of finance in Fair Trade. First, it examines the weak agricultural financial markets in which most producers in the South operate and considers their difficulties in accessing finance. It looks at how Fair Trade and the provision of prefinance address some of the financing needs of small-scale farmers. Second, this chapter considers the capital challenge for Fair Trade companies in the North, and in conclusion explores whether new forms of capital are needed to enable the Fair Trade sector to reach scale. Although all Fair Trade producers need access to capital and have varied financing needs, this chapter focusses primarily on the Fair Trade producers, exporters and importers that deal in ‘soft’ commodities.
- Chapter 6: Fair Trade Certification - Having examined the need for Fair Trade to correct market imperfections and some specific examples of how Fair Trade business and finance actors have incorporated Fair Trade into global supply chains, we now turn to the involvement of third-party Fair Trade certification labels. This chapter will discuss the history of Fair Trade certification in Europe and its evolution into a global system of standards and trade audits, primarily under the umbrella of Fairtrade Labelling Organizations International (FLO). FLO's governance structure and the financing of certification are presented, as well as a critique of decision making in terms of growth and new product development. In addition there will be some final discussion of the role of other monitoring initiatives.
- Chapter 7: The Marketing of Fair Trade - This chapter will explore the key marketing issues for Fair Trade and trace the development of marketing communications strategies over the last ten years. There will be a particular focus on the UK market, as this is the most developed in terms of marketing communications, but other European markets and the USA will also be considered. The historical development of Fair Trade marketing to date is broken into three distinct phases and each is explored in detail. Using theory from social network research, the chapter goes on to show how establishing different levels of connectivity between producers and consumers lies at the heart of all successful Fair Trade marketing.
Part Three: The Impact of Fair Trade
- Chapter 8: The Fair Trade Market - Part Three of this book considers the growing impact of Fair Trade and plots its likely onward course, including a discussion of the important challenges facing it in the next ten years. This chapter begins by considering the significant shift towards ethical consumption that is evident in many developed countries. As part of this analysis it identifies who are the ethical consumers and how the Fair Trade consumer fits within this larger grouping. The chapter goes on to outline the extent of global Fair Trade sales and then conducts a country-by-country survey of the key markets. Next, the structure of the distribution channels for Fair Trade retailing is set out with a particular note on retailer end-pricing.
- Chapter 9: Measuring Impact - This chapter sets out the metrical landscape for Fair Trade. It begins by summarizing the existing research on the impact of Fair Trade and then continues by exploring the direct and indirect social impacts accruing to producers from selling to the Fair Trade market. Next, the chapter addresses the various models that may be used to measure the social impact of Fair Trade. Finally, it examines the social return on investment methodology in some detail.
- Chapter 10: Fair Trade Futures - The Fair Trade movement finds itself at a turning point. After years of functioning as an effective alternative trading mechanism, Fair Trade is now entering the mainstream, trying to balance being ‘in and against’ the market. The engagement of multinationals like Procter & Gamble and Starbucks and major retailers such as Tesco and Carrefour clearly signals the commercial opportunity represented by Fair Trade (Welford et al., 2003). However, future development remains highly contested. This chapter begins by summarizing the key points of the book thus far to provide a context for the broader discussion of future issues that follows. It then lays out some of the strategic opportunities to grow Fair Trade and identifies the challenges in obtaining those objectives.