Fair Trade Coffee
Fair Trade Coffee: Ethics, Religion, and Sustainable Production
Global Marketing Management
International Summer University 2010- WU, Wien
Table of Contents
Introduction 3 Problem Statement 3 The Fair Trade vision 3 Background: The Fair Trade Foundation 4 Background: Fair Trade Labeling Organization International 4 Fair Trade Mark 4 Fair Trade Pricing 5 The Fair Trade Premium 5 Question 1. Why should Starbucks, Kraft, and Nestle create ‘ethical supply chains’? 6 Question 2: Do you agree with the finding that few consumers consider the impact of their purchase decisions on anyone or anything but themselves and their family? 7 Question 3: What recommendations would you make to help cure the ills of the coffee market? 8 Conclusion 9 References 10 Appendix 11
Introduction
Coffee is the world’s seventh largest legal agricultural export by value. Globally, 400 billion cups of coffee are consumed annually. The greatest players in the Coffee market are P&G, Nestlé & Kraft. Approximately 25 million farmers in 50 developing countries produce coffee (Facts & Figures 2010). This case study will look at the Fair Trade Foundation and the Fair Trade Mark’s role in alleviating the current issues in the Coffee Market. It will also aim to make recommendations on how the Fair Trade Brand could be strengthened.
Problem Statement
In 1999, the coffee price was $1.42 per pound. Various producers entered the market during the following two years and by 2001, the market had reached saturation. By 2001, 115 million bags of coffee were being produced and yet only 105 million could be sold according to the International Coffee Organization (cited in Keegan & Green 2008). Prices dropped to an all time low of $0.42 per pound. This excess supply and low demand brought devastation to the lives of 25 million coffee farmers in 50 poor developing countries around the world. Various farmers quit the market as the true cost of
Global Marketing Management
International Summer University 2010- WU, Wien
Table of Contents
Introduction 3 Problem Statement 3 The Fair Trade vision 3 Background: The Fair Trade Foundation 4 Background: Fair Trade Labeling Organization International 4 Fair Trade Mark 4 Fair Trade Pricing 5 The Fair Trade Premium 5 Question 1. Why should Starbucks, Kraft, and Nestle create ‘ethical supply chains’? 6 Question 2: Do you agree with the finding that few consumers consider the impact of their purchase decisions on anyone or anything but themselves and their family? 7 Question 3: What recommendations would you make to help cure the ills of the coffee market? 8 Conclusion 9 References 10 Appendix 11
Introduction
Coffee is the world’s seventh largest legal agricultural export by value. Globally, 400 billion cups of coffee are consumed annually. The greatest players in the Coffee market are P&G, Nestlé & Kraft. Approximately 25 million farmers in 50 developing countries produce coffee (Facts & Figures 2010). This case study will look at the Fair Trade Foundation and the Fair Trade Mark’s role in alleviating the current issues in the Coffee Market. It will also aim to make recommendations on how the Fair Trade Brand could be strengthened.
Problem Statement
In 1999, the coffee price was $1.42 per pound. Various producers entered the market during the following two years and by 2001, the market had reached saturation. By 2001, 115 million bags of coffee were being produced and yet only 105 million could be sold according to the International Coffee Organization (cited in Keegan & Green 2008). Prices dropped to an all time low of $0.42 per pound. This excess supply and low demand brought devastation to the lives of 25 million coffee farmers in 50 poor developing countries around the world. Various farmers quit the market as the true cost of