A growing number of Canadian retailers are responding to rising consumer demand for ethical consideration in the goods they sell.
And while not all have the clout of a retailing behemoth such as Wal-Mart - which has recently included fair-trade coffee on its shelves in the United States - a pattern is emerging as the market attempts to cater to an emerging social consciousness among many consumers.
Following the growing popularity of organic foods, which have moved from the domain of speciality and health-food shops into mainstream supermarkets, an organized fair-trade movement is now tracking goods across entire supply chains and offering independent, third-party verification of its origins.
"Consumers are becoming increasingly concerned about where their products come from," says Rob Clarke, executive director of TransFair Canada, an Ottawa-based non-profit public education group that promotes fair trade-certified goods.
"Fair trade ensures factory workers, farmers and other producers receive a fair price," Clarke says. "It's about paying a minimum price that reflects the true value of the labour and allows people to continue what they're doing."
TransFair Canada holds Fair Trade Certified rights in Canada and is part of a growing global network established under the Fair Labour Organization, an international body that works to build networks of fair-trade suppliers and conducts detailed onsite audits to authenticate claims.
Workers in most western countries are protected by basic labour standards, yet compromises are sometimes made in order to import manufactured goods at a discount - a price paid by workers, some of them children, who toil in sweatshop conditions for scant wages.
Decades of protest and consumer boycotts have drawn attention to the plight of these workers, scoring occasional victories. Among the most recent was Nike's announcement in late November that it cut off a Pakistan-based supplier of hand-stitched soccer balls that violated the company's labour, environmental and health-and-safety rules.
"We are developing new sources with factories committed to upholding our standards and treating workers fairly," Nike president and CEO Mark Parker said in a statement.
TransFair Canada's Clarke says foreign producers of popular commodities such as sugar and cocoa are often at the mercy of protectionist western subsidies, which drive down prices and leave them selling goods for less than the cost of production. Products that are certified must meet prescribed standards governing worker rights, environmental protection and overall sustainable business practices.
"We have minimum-pesticide requirements, we're helping farmers move away from single cash crops to multiple products, and we're becoming more and more involved in helping people develop local domestic markets," Clarke says.
Producers have access to lines-of-credit of at least 60 per cent of the value of individual orders, and consumers who choose fair-trade goods ultimately pay a small social premium to be invested in communities where production occurs.
These funds are controlled by locally elected, independent bodies and spent on schools, healthcare facilities and other infrastructure improvements.
On the consumer-facing side, TransFair Canada counts hundreds of participating retail locations across Canada, from neighbourhood businesses to supermarkets.
One of the biggest is Loblaws, with 64 fair-trade stock-keeping units (SKUs) and a selection that includes coffee, tea, sugar and chocolate.
Loblaws spokeswoman Elizabeth Margles says the company plans to add a dozen more SKUs by year's end. "We have one frozen dessert made with fair-trade chocolate and we look forward to listing a rice in the near future. We keep a close pulse on what consumers want."
Margles says Loblaws stocks fair-trade items in its Natural Value section, along with organic products and ones that, while not certified fair trade, tout some form of social responsibility.
While the volume of fair-trade items is relatively low compared to conventional products - Margles wouldn't give numbers for proprietary reasons - she says shoppers buy a variety of products, so fair-trade items add to the draw.
Capers Community Market is decidedly mid-size, with four locations in Vancouver. Yet, it carries a substantial number of certified fair-trade items.
"We position ourselves as an organic and natural leader," says marketing manager Aron Bjornson. "We have an onsite bakery at each of our stores, and we switched to organic fair-trade cane sugar in more than 90 of our recipes. That was a really big move for us and not something we've seen from the rest of the industry to date."
Bjornson says fair trade has grown substantially in the past few years and he sees this trend continuing as people learn about working conditions abroad.
"There will be more traction in mainstream grocery. You will be able to walk into supermarkets on a regular basis and get an assortment of fair-trade products, and the numbers will continue to grow as fair trade goes into more commodities."
Even though the larger chains carry fair-trade items, pricing and quality are key in a competitive environment.
"There are ethical reasons for buying a product, but something has to taste good and be at a price point in line with what the business is," Bjornson says.
At Earth's General Store in Edmonton, owner Michael Kalmanovitch sees fair trade as a central business principle.
"We want to make the world a better place, and we can do that by changing people's lifestyles, attitudes and consumption levels," Kalmanovitch explains. "We introduce people to environmentally friendly products, reduce their packaging and change their mindset, so that they can become more socially conscious consumers."
Earth's carries a variety of fair-trade goods, from footballs to organic cotton clothing. There's even a coffee roaster in-house, and customers can bring their own containers to refill.
"A lot of stores sell green products, but they also carry lots of normal, not very environmentally or socially friendly products on their shelves. We take the benchmark of their best products and go from there."
Dean Neu, a business professor and director of the Centre for Public Interest Accounting at the University of Calgary, says time will tell how large discount retailers will incorporate fair trade into their operations.
"Large companies in the supermarket industry have been jumping on the bandwagon trying to provide more fairly traded products," Neu says.
"Their dilemma will be to figure out how price-elastic these products are. If people are willing to pay more, then there's really not a huge problem because they can just pass on increased costs to the consumer. But if the products are more price-sensitive, they will have to figure out how to meet certification standards and keep prices low."
Growth in the fair-trade market could result in economies of scale and help keep prices in line with conventional products.
However, Neu says fair trade need not be cost-prohibitive in the first place.
"A factory might pay 12 cents to sew a T-shirt, and a discount retailer might sell that shirt for $6 to $8. But a fairly traded salary for workers might be around 40 or 50 cents, depending on the country.
"It's not a lot but it would make a huge difference - it would basically quadruple their wages."
(Saul Chernos can be reached at chernos@businessedge.ca)
