UPDATE! about fair food
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CONTENTS 04 06
Foreword: We’re glad to see that more consumers are choosing fairly traded food, and we’re working towards a world in which everyone does that.
1. Our dream: Making fair food and drink accessible to everyone by developing international trading chains.
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2. Fairtrade trading chains: In 2015, we made new progress in our fairtrade trading chains. In this section we set out the most important results for you.
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3. Widely accessible: We pay special attention to product development and new product introductions. In 2015, we introduced nine new products.
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4. Future plans: In 2016, we are also working on fairtrade firsts, our social impact and fewer CO2 emissions. Are you with us? Together, we are making the world a fairer place.
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5. Our team: Fair Trade Original was founded in 1959 – that makes us the Netherlands’ first social enterprise.
6. Honest about coconut milk: In 2015, coconut milk was our fastest-growing product. Who are the makers in Sri Lanka, who makes sure that it is successful on the Dutch market, and who earns what? 7. Good question! We love critical questions, because they give us the chance to explain what we do, and how and why we do it. Here you can find eight questions and answers about the price of our products. 8. Our figures: The most important data from 2015.
Glossary: The ABC of Fair Trade Original. Describing ambition, certification, Fairtrade premium, impact, climate compensation, principles, recipes and profits.
Colophon FAIR TRADE ORIGINAL IN 2015
DESIGN Wunder Strategisch Designbureau
Fair Trade Original Multatulilaan 12 4103 NM Culemborg The Netherlands T: +31 (0)345 54 51 51 E: info@fairtrade.nl www.fairtrade.nl/english
TEXT Fair Trade Original, 2 in beweging PHOTOGRAPHS Charles Briscoe-Knight p 2; Dominique Felicity Chapman p 39; Zoran Djekic p 1; Sjoerd Eickmans p 17, 18; Saptak Ganguly p 5;
Suzanne Klaver p 24, 25; Remko Kraaijveld p 19-21; Joris Maatman p 14; Ma’s Tropical Foods p 28; Stacey Newman p 30-31; Meredith Novario p 16; Breanna Peterson p 6; Chantal Rison p 20; Hugh Sitton p 12; Spastonov p 40; Fokke Struiksma p 5; Fair Trade Original 3
FOREWORD
Happy with more than a million motivated customers Absolutely – Fair Trade Original had a good year! Our turnover grew by 8% and came to € 14.7 million. Even more important is the growth we saw in our supermarket clients, where we saw the turnover of Fair Trade Original products increase by 28%. One great result of this is that our products are even easier to find on the shelves. The number of customers who bought one or more Fair Trade Original product grew to more than a million. We’re very happy to see that more consumers are choosing fairly produced food, and now we’re aiming to increase this number even further, until eventually everyone does that. You’ve got to aim high, right? MORE PREMIUMS FOR FAIRTRADE FARMERS Our fairtrade partners in Africa, Asia and Latin America also profit from the growth of Fair Trade Original. Their purchase values increased, and as a result we were also able to pay more development premiums to the fairtrade farmers’ cooperatives. As well as the development premiums, Fair Trade Original invested in the growth of fairtrade through direct, local support for our trade partners and through the licence contribution to the Max Havelaar Foundation. Altogether, our investment in the growth of fairtrade came to almost € 1,000,000, equal to 7% of our turnover.
Bert Jongsma, Managing Director
NINE (!) NEW PRODUCTS With nine product introductions, we took the lead in the expansion of the fairtrade product range. This expanded our coffee assortment with three types of capsules. We also built on our already extensive line of Asian cuisine and introduced products including organic coconut milk and gluten-free rice vinegar and soy sauce.
TAKING ‘CLIMATE NEUTRAL’ FURTHER Fair Trade Original is focused on the growth of fair, international trade, but we are also committed to conserving our planet. That’s why, since January 2015, we have made our office, our packaging and our travel both at home and abroad climate neutral. We do this by compensating for our unavoidable CO2 emissions with charcoal oven projects in Uganda and Kenya.
The expansion of the Asian culinary line would not have been possible without the commitment of the farmers’ organisations and local processors in countries such as Thailand and Sri Lanka. This intensive cooperation not only leads to delicious new products, it also helps us strengthen the trading chain and increase our social impact.
We couldn’t have achieved these great results without the commitment of the Fair Trade Original team. It is very rewarding to work with a small but driven group of people, who really feel connected to our mission. And finally, of course, let me thank all the consumers who put their trust in our wonderful brand. Together, we can face the world!
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‘Do you think about the people behind your food?’ 5
1. OUR DREAM OUR DREAM Trade is fair and transparent, from farmer to consumer OUR STAKE By developing international trading chains, we make fair food and drink accessible to everyone OUR AMBITION • more fairtrade products in the shops • c reating opportunities for farmers and employees • m ore added value in the country of origin • t ransparent international trading chains • s timulating other brands and traders to contribute to fairtrade • g etting consumers involved in our mission
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Why do farmers lose out in many situations? What solutions can we see, and what’s in it for us? Here, we give a brief description of the core of the story. Behind this lies a world of poverty and development, of pioneers and stragglers, of opportunities and barriers, of working hard and keeping trying. If you would like to know more, we’ll gladly tell you! Small-scale farmers in developing countries provide a large part of our daily food and drink. Most of them are directly dependent on farming for their subsistence, but then when they want to sell their products on the international market, these hundred thousand farmers have a weak starting position because they lack the right knowledge and tools. A small group of large – and therefore powerful – companies buy their products and take most of the added value (the price difference between the ingredient and the end product) for themselves. YOU CHOOSE Ultimately, you, the consumer, decide which products to buy and which not to buy. In the Netherlands, more and more people are consciously choosing socially responsible products during their day-to-day grocery shopping. In this way, you give a voice to small farmers in developing countries. Using your purchasing power to promote a fairer division of power and money on the international market makes you – and many others like you – a force to be reckoned with. FAIR BRANDS The range of socially responsible food and drink is expanding. There are an increasing number of seals of approval and claims that guarantee that products are fair or otherwise responsible. Consumers want to be able to make a fast, good choice, so the required information about products must be easily accessible, transparent, complete and reliable. Brands that adhere to these conditions have an advantage.
A fair income and better living conditions for farmers and their families in developing countries: that’s what drives us at Fair Trade Original, and with good reason. Even though poverty has decreased worldwide in recent decades, today about 1.4 billion people still have to live on less than € 1 a day. Imagine that! Almost a billion people suffer from hunger, and at least 70% of them live in rural areas.
OUR APPROACH In order to make fair food and drink accessible, we develop new production and trading chains. We travel to orange orchards and rice fields, talk to cooperatives, visit processing plants, and we are committed to achieving good working conditions and fair prices whilst caring for the environment. GOOD PROSPECTS We make our organisation strong for the most vulnerable links: the farmers and employees. We offer them training, help them to achieve the Fairtrade certificate and pay them the fairtrade development premium. That gives them the opportunity to work towards a better position on the export market and a future with good prospects. LOCALLY PROCESSED Wherever possible, we work with processors, such as small-scale factories, in developing countries. In this way we increase the impact in the country of origin. These processors who have chosen social enterprise act as our ambassadors, which means that they are an indispensable link in the development of fair trading chains. The importers and processors we work with in Europe also work according to our principles. They are transparent and are prepared to invest in a long-term relationship TRACEABLE We are committed to ensuring that the ingredients in our products can be traced all the way from fork to farm. AND TASTY! We love good food and drink, and we’re always pleasantly surprised by the enormous variety of ingredients and dishes from the countries of origin. Curries from Thailand, honey from Guatemala, coffee from Ethiopia: we make products with the best fairtrade ingredients for every moment of the day, and we encourage people to enjoy them to the fullest. STRONGEST LINK We want to make fair food and drink widely and easily accessible for everyone, which means making it available at a reasonable price, because by buying our products you create the opportunities for the farmers who provide your food and drink. The strongest link? That’s you!
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CLIMATE CHANGE When it comes to climate change, the farmers who supply the fairtrade ingredients for our products belong to the most vulnerable groups. The climate has a direct effect on their harvest, so we believe that preventing climate change must form part of our working practices.
regarding environmental management, climate change prevention and protection from climate change. We help new farmers to gain the Fairtrade certificate, and to this end we organise training courses and supervision in collaboration with local consultants.
REDUCING OR COMPENSATING Almost all our business activities produce CO2. We can’t avoid this entirely, but we can reduce or compensate for our carbon footprint. As a 100% fairtrade organisation, we prefer to implement that compensation in developing countries. In 2015, we made our own business activities and packaging climate neutral by taking advantage of CO2 compensation. In the coming five years, we want to make a positive contribution to the fight against climate change. In order to minimise the damaging effects of the production of the products we sell, we seek to work with our stakeholders, from the farmer to the consumer.
2. MAKING THE PRODUCT In accordance with our organisational targets, we give precedence to improving the climate achievements of the processors in the countries of origin. We want to draw up a joint business plan with each of them in 2016, including climate considerations. For our contribution we will raise awareness, offer guidance and supervision and organise training courses.
WORKING WITH STAKEHOLDERS When setting our climate goals, we consider the level of influence we can exert on the activities and stakeholders in our trading chains:
3. PRODUCT PACKAGING An important consideration when choosing which materials to use in our packaging is how environmentally friendly they are. Other restricting factors include the purchase price, the processor’s practical considerations and the functionality of the packaging. We calculated the total CO2 emissions of the packaging of the products we sold in 2015, and we compensated for these emissions by purchasing carbon credits. That makes all our packaging climate neutral.
1. PRODUCING INGREDIENTS In order to grow the ingredients for our products, the farmers use land, water, energy, fertilisers and pesticides. They carry out these activities in accordance with the fairtrade standards
4. TRANSPORTING THE PRODUCT TO THE WAREHOUSE All the ingredients and products that we or our importers buy are transported to the Netherlands by sea. In 2017, we will gain more information about the CO2 emissions of the sea voyage
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PROCESS
STAKEHOLDER
LEVEL OF INFLUENCE
FOCUS
1. Produce ingredients
Farmer
Some influence
Raising awareness and training
2. Make products
Processor
Some influence
Supplier selection, raising awareness and training
3. Package the products
Processor
Considerable influence
Packaging policy
4. Transport the product to the warehouse
Shipping company or processor
Some influence
Purchasing policy
5. Store the product and transport it to the client
Logistics service provider
Considerable influence
Use of green electricity and more environmentally friendly transport
6. Sell the product to the consumer
Client
Very limited influence
Account Manager
7. Use the product
Consumer
Limited influence
Raising awareness
8. Business operations at the office
Employees, lessors and service providers
Significant influence
Organisational policy
and the transportation from the port to the warehouse, and we will develop a plan to reduce these emissions. 5. STORAGE OF THE PRODUCT AND TRANSPORTATION TO THE CLIENT Fair Trade Original has outsourced product storage and transportation to Simon Loos B.V. This company specialises in transporting products to large retailers, and in 2014 they received the Lean and Green Star Award for reducing their CO2 emissions by 20% over five years. 6. SELLING THE PRODUCT TO THE CONSUMER We have little influence on the climate policy implemented by our clients. We will inform them of our climate policy and the measures we take to improve our climate performance. 7. USING THE PRODUCT Consumers are increasingly aware of the contribution they can make to a better climate. We inform them of our efforts in this area through our own communication channels, and give them tips on how they too can make a positive contribution. 8. BUSINESS OPERATIONS AT THE OFFICE We set high sustainability requirements for our building, our office equipment and the journeys our staff take. This helps us to limit our CO2 emissions. Since 2015, we have compensated for the remaining CO2 emissions by purchasing carbon credits, making the business operations at our office completely climate neutral.
SOCIAL IMPACT As a social enterprise, our main goal is to maximise not profits, but social impact: to deliver the maximum social value with positive effects for people, for the environment and for society. By measuring our social impact, we can determine whether our approach is successful. In 2016 we will focus on the impact of the trading chains that enable our products to be processed locally. By examining our input structurally, we want to show the kind of positive result this brings to the farmers and processors. The goals we agree with the processors in order to do this also serve as the starting point for the collective annual plan.
LESS FUEL, BETTER HEALTH IN AFRICA By purchasing our Gold Standard carbon credits, we contribute to the proliferation of people-friendly and environmentally-friendly wood-fired ovens in Kenya and Uganda. These ovens use as much as 40% less fuel than the traditional method of cooking over an open fire, and they produce little or no smoke. This means fewer CO2 emissions: a benefit that can be transformed into CO2 credits. The sale of the credits finances the oven project. For example, about 90% of rural households in Kenya cook over an open fire. This leads to deforestation, and women have to travel further and further to collect firewood, often as far as 15 km in a single day. Thanks to the ovens, they have more time for other tasks and for their children. The woodfired oven is also more economical to use. Most importantly, cooking is now much less unhealthy: breathing in the smoke whilst cooking over an open fire has the same effect as smoking 40 cigarettes a day! The ovens are developed locally, and their production and sale take place throughout the country, so the project also provides important employment opportunities. For more information: www.goldstandard.org
STAKEHOLDER
Farmers’ cooperatives
Local processors
ACTIVITY
Fair Trade Original directs the purchase of fairtrade ingredients from farmers’ cooperatives
Fair Trade Original sources processing locally, and develops fair trading chains together with the processors
OUTCOME
Cooperatives sell more products that meet fairtrade standards and become stronger
Local processors make products for Fair Trade Original and maintain fair trading chains
OUTPUT
Cooperatives meet fairtrade standards and implement their development plan
Local processors adapt the sourcing and processing to Fair Trade Original standards and strengthen their trade relationship with farmers’ cooperatives
IMPACT
Cooperatives trade in export chains, and farmers have – or are on the way to having – a liveable income
Local processors earn more, generate profits, create local employment opportunities and grow with fairtrade production and export 9
‘Give someone else the same opportunities you have’
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THE IMPACT OF OUR LOCAL TRADING CHAINS Fair Trade Original invests a lot of time and energy in the development of what we call ‘local trading chains’. In 2015, because of this, 34% of our products were processed in the ingredients’ country of origin. This increases the social impact: it improves the living conditions of farmers and their families and offers the people in the factories good employment opportunities. 1. W e take the initiative to set up a local trading chain with a processor and farmers. We train them to be able to certify products for the Fairtrade Seal of Approval. 2. Together, we develop fairtrade products in the country of origin, using local ingredients, and export these products to the Dutch market.
3. W e supervise the processor as they develop and implement their export plans. 4. We successfully bring the product to the Dutch market. 5. N ew clients become interested in the processor’s fairtrade range. 6. This success enables the processor to develop new fairtrade products. This is how the local trading chain grows even more. 7. The farmers who supply the ingredients see their sales grow as a result, and they receive a larger development premium. 8. The processor and the farmers earn more: the local economy grows.
WHAT WE DO BUILD
DEVELOP
SUPPORT
SELL
LOCAL FAIRTRADE TRADING CHAIN
FAIRTRADE PRODUCTS
LOCAL PROCESSOR WITH EXPORT PLANS
FAIRTRADE PRODUCTS UNDER OUR BRAND
ENSURES MORE INTERNATIONAL INTEREST IN THE FAIRTRADE RANGE
INCREASED TURNOVER AND EMPLOYMENT OPPORTUNITIES FOR AND WITH THE PROCESSOR
INCREASED SALES AND FAIRTRADE PREMIUMS FOR FARMERS
INCREASED LOCAL PROSPERITY 11
2. FAIRTRADE TRADING CHAINS When purchasing our products, we use and improve existing fairtrade trading chains and develop new chains.
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World firsts
100% Fairtrade certified
Building local trading chains sociale impact
Giving new farmers access to fairtrade
Investing more in the growth of fairness
Greater transparency and better traceability
Personal relationships
The products we want to develop and the people we work with come first in our activities in the trading chains. We made continuing progress in 2015, and these are the most important results. WORLD FIRSTS In late 2014 we introduced the world’s first fairtrade sambal chili’s. Two tasty, spicy products that are the result of a long and intensive collaboration with our trade partners. The introduction of these new products contributed to the expansion of our range of fairtrade food and drink in the Netherlands. The farmers and processor came together in 2015, and our local consultant organised a training course in which both parties agreed sustainable arrangements regarding fair and transparent compensation for the fairtrade ingredients. Since then we have been working on new firsts. Together with the rice farmers of the farmers’ cooperative Nam Om and the processor President Rice, we successfully developed rice noodles which were introduced in March 2016. Our search for new Eastern culinary products continues – we expect to make new firsts known in 2016. 100% FAIRTRADE CERTIFIED Our ambition to put an independent Fairtrade Seal of Approval on all products has come a step closer. In 2015, the Fair for Life seal of approval was awarded to two table spice mills from South Africa and to the egg noodles from India. Fair Trade Original supervised and funded the entire certification process. The coconut milk from Sri Lanka
received the Fairtrade Seal of Approval. Because of the good market prospects for fairtrade coconut milk, the group of coconut farmers expanded to 36. At the end of 2015, only our chocolate sprinkles and flakes were not allowed to carry the seal of approval for lack of fairtrade cane sugar. Since Fairtrade International recently relaxed the rules, cane sugar can now be replaced with beet sugar under the seal of approval. However, we have decided that we will only apply for the seal of approval if we manage to use cane sugar in our chocolate sprinkles. We’ll be introducing our new and improved chocolate sprinkles in 2016. INVESTING MORE IN THE GROWTH OF FAIRNESS We want to increase our investment in developing our trade partners. The money we spend each year on fairtrade development premiums, direct support for our trade partners and the Max Havelaar licence fee has increased to almost € 1,000,000 (7% of net turnover). BUILDING LOCAL TRADING CHAINS WITH SOCIAL IMPACT Fair Trade Original builds fair trading chains. Wherever possible, we try to ensure that the fairtrade ingredients are processed into the final product in the country of origin, which helps us to create more added value locally. We work with ten local processors, who between them make 30 products for us. Last year we found a second supplier for our (organic) coconut milk in Sri Lanka. Considering the enormous popularity of this product, it was important to reduce our dependence and the pressure on a single supplier. Since then, within a year, Fair Trade Original has become the largest buyer of coconut
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‘We invested a lot of time in helping farmers in Ghana who are growing fairtrade oranges for our orange juice’ milk from this second supplier, BioFoods. For the same reason we decided to look for a second supplier for tinned pineapple, and Fair Trade Original is helping the supplier to obtain the fairtrade certificate. This process will be completed in 2016.
quality, food safety and volume of the orange concentrate that is the basis of our juice. This project will bear fruit in 2016, and we are also investigating the social impact for the farmers and the processor.
GIVING NEW FARMERS ACCESS TO FAIRTRADE We are also looking for new farmers who can supply fairtrade ingredients for our products. By offering farmers local support, not only can they obtain the fairtrade certificate, but we also help them to meet international guidelines for food safety, and they work on improving the product quality. By supplying ingredients for our products, they learn to do business at an international level.
GREATER TRANSPARENCY AND BETTER TRACEABILITY We have noticed that consumers are more and more concerned with the origin of the products they eat and drink, and we want to provide openness in our business dealings. What’s more, the origin is actually one of the most important ingredients in our products! From page 26 onwards you can see where our coconut milk comes from, what goes into its production and how we bring it to market so that it reaches you, the consumer, in pristine condition. We also explain how this translates to the pricing structure.
ORGANIC RICE AND GHANAIAN ORANGES We have begun to source fairtrade and organic rice from farmers in Cambodia, and this project will continue into 2016. We have invested a lot of time in helping farmers in Ghana who are growing fairtrade oranges for our orange juice. Setting up a well-run trading chain has been our first priority there. To that end, all stakeholders in the trading chain signed a partnership agreement with IFDC (International Fertilizer and Development Cooperation) with the aim of improving the
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Making all fairtrade ingredients traceable is a significant challenge for us. In some cases (cacao, sugar, juices, tea), international trade can be set up in a way that makes it more difficult to trace the product from the ingredient to the final product. We think traceability is important, partly because fairtrade farmers have to follow strict guidelines when using pesticides. We are glad to see the results of this in our products.
It also gives the trade relationship a more personal character. In 2015 we investigated the necessary adaptations to our trading chain to allow us to process traceable ingredients in our chocolate sprinkles and flakes. We have made progress, and we expect to be able to tell you more about this in 2016.
In 2015 we purchased products from 29 processors. They all work with a food safety system which has been externally certified, or which has been audited by our internal Quality Control Manager.
PERSONAL RELATIONSHIPS Sustainable collaboration starts with good personal relationships with our partners in the trading chain. Thanks to good personal relationships, participation is increasing, and that helps us to build successful and fair trading chains. There are many great examples of this from recent decades. Together with the coffee farmers of Fedecocagua, we imported the very first fairly traded coffee into Europe. 43 years later we are still selling coffee from Fedecocagua, and today, partly thanks to good personal relationships, we are continuing to successfully build new, fair trading chains. Without the personal commitment of and the close collaboration with the processors and farmers in Thailand, Sri Lanka and India, we wouldn’t have succeeded in further expanding our successful Asian culinary line. But the relationship we have with many of our processors in Europe also goes further than purely commercial contact. We travelled together with our new rice supplier, Reismuhle Brunen, to visit the rice farmers, and we’re working side by side to develop new fairtrade trading chains.
The number of suppliers per food safety system at the end of 2015
FOOD SAFETY Fair Trade Original aims to make tasty fairtrade products that consumers can enjoy effortlessly. That’s why product quality and food safety are so important. Food safety includes the requirement that our products meet the common European food safety standards. This means that we systematically check this aspect of our products. We make sure that customer and consumer complaints are suitably followed up and processed. If, despite these measures, products are sold which do not meet our strict quality and food safety requirements, we react quickly and efficiently.
ISO 2200 certificate (5)
BRC certificate (10)
HACCP checklist (2)
BRC and IFS certificate (7)
IFS certificate (5)
We achieved our aim to receive fewer complaints about products last year. The complaints we received often related to the quality of the chocolate sprinkles, and some said one red and yellow curry lot was too spicy. As a result, we have taken steps to deal with the cause of these complaints. Twice in 2015 we withdrew products from shops. Neither of these cases had anything to do with food safety, but the quality was not up to standard. In January we withdrew some herbal tea which did not meet our quality requirements, and in June we removed some types of red and yellow curry paste which were too hot, on account of a variety of chilli pepper being used that was too spicy. Although other comments on Facebook showed that some consumers actually really enjoyed this hot curry paste, for the average consumer it was really a step too far. People who complained that it had made their meal taste unpleasant naturally received a replacement to make it up to them.
CERTIFICATION We are ISO22000 certified, which means that we meet internationally accepted food safety standards. In 2015, our quality system was classed as ‘good’ by the DNV certification body. We also expect our processors to work according to our recognised food safety system. This also applies to companies which process fairtrade ingredients into a market-ready product in the country of origin. Where necessary, we support and train them in this area, which also increases their chances on the international market.
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3.WIDELY ACCESSIBLE TO EVERYONE Because we want to increase the fairtrade range in shops, we pay a great deal of attention to product development and introductions. We are always on the lookout for new products and additions to our range, especially in the categories of cuisine, warm drinks and sandwich spreads. Taste. Health. Organic. As well as the search for fairtrade ingredients, these considerations drive us to further develop our range and optimise our existing products. Wherever possible, we work without artificial additives. If that isn’t possible, for instance because of shelf life or flavour, we choose the best alternative. By giving clear information about the contents of a product on its packaging, we give the consumers the opportunity to make conscious choices about their food. In 2015 we introduced nine new products. CULINAIR Alongside our existing version, the new coconut milk answers the increased demand for organic products. The addition of 270 ml tins also serves smaller households.
The pineapple chunks build on the success of the pineapple slices. The chunks are tinned in their own juice, with no added sugar. This product enables us to increase the farmers’ sales of fairtrade pineapple by also finding a use for their smaller pineapples. The 227 g tin is suitable for small households, for different times of the day and for even more ease of use.
The soy sauce and rice vinegar are both organic, and make a logical addition to the Asian range. The soy sauce is also gluten free.
WARM DRINKS Capsules are taking up more and more space in the coffee aisle. To offer fairtrade a place here too, we introduced three varieties: two espressos and a lungo. We are investigating the possibilities to offer the next generation of capsules that are also compostable. The reactions to the flavour are very enthusiastic.
To stimulate the growth of our coffee beans, we added organic Extra Dark Roast espresso beans to the existing range. These characterful beans in 500 g packaging meet the demand for strong coffee.
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To round off the coffee and tea assortments, we offer cane sugar in various types of packaging. Our cane sugar sticks for the out-of-home market are now also available in a smaller box of 50 sticks for home use. We have noticed that some consumers have switched from sugar cubes to the new sticks.
SANDWICH SPREADS In the breakfast category, preparations have been made for new introductions in 2016 and a change to the chocolate sprinkles recipe. We will see the results of this in 2016. With the extra dark chocolate spread, we and the producer have succeeded in replacing the allergen soy lecithin with sunflower lecithin. Some reductions have also taken place, due to insufficient sales. This relates to our ketjap manis, two varieties of jam in pots and two kinds of wine. In 2015, some products which were previously reduced were definitively removed from the range.
The sticks contain light, fine Caster cane sugar. This is a finer variety than the coarser, darker Demerara in our loose cane sugar and cubes.
IN THE SHOPS As well as introducing new products to our range, in 2015 we renewed our efforts to make our products available in as many shops as possible, thus making them accessible to a larger group of customers. This was a success: in supermarkets, sales of products bearing our logo increased by 28% and we met our sales targets with our three biggest clients, Albert Heijn, Jumbo and Superunie. Growth was especially rapid in Albert Heijn. A number of basic products went on sale in more stores, and Albert Heijn customers reacted well to the new Fair Trade Original products on the shelves. Some of our classics, such as our coconut milk and chocolate sprinkles, increased sales on their own merits. We entered into a partnership agreement with Jumbo Supermarkets. Jumbo has sold the widest range of Fair Trade Original products for several years. As well as attending to the sale of our products, arrangements have been made regarding collective investments in projects we implement with farmers and producers, this time regarding the strengthening of the orange-growing sector in Ghana. At the same time, our sales at Jumbo grew considerably, especially thanks to the addition of new products. Deen, a member of Superunie, added a number of our products to their range, giving their customers easy access
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to our new lines. Hoogvliet, also a member of Superunie, displayed almost our entire range on their shelves in Wageningen and Ede. CLOSE-KNIT DISTRIBUTION NETWORK The World Shops and WAAR have traditionally been important buyers of our products. In the summer of 2015 we began a collaboration with a new distributor to better serve these small and medium-sized clients. Since then, these shops have been more flexible in the size and frequency of the deliveries. An early evaluation showed that they are satisfied with this, which may lead to our products being more widely available through these channels. In 2015, as well as an improved service to existing clients, cooperation has also brought us new customers. EXTRA ATTENTION FOR THE SHOP FLOOR We made recipe cards and a Christmas package leaflet for the World Shops and WAAR shops, meaning that these shops offer their customers an extra service. The recipe cards make a great addition to a gift package. We had a prominent presence in the house-to-house leaflets during the Fair Trade Weeks in the spring and autumn. These leaflets dropped into two million people’s letterboxes, and offered us the opportunity to draw attention to the special offers on our products during these Fair Trade Weeks.
SPICY SANDWICH EASTERN WITH MINCED CHICKEN MUSHROOM BROTH AND VEGETABLES WITH NOODLES SERVES 4
15 MINUTES
INGREDIENTS 1 tbsp vegetable oil 300 g (chicken) mince 1 small leek ½ pointed cabbage 1 large multi-grain baguette AND FROM FAIR TRADE ORIGINAL: ½ bottle Sweet & Sour Wok Sauce 1 tin Pineapple Chunks in Juice Chilli Pepper Sea Salt Mix Table Mill Peanut Butter Sambal Oelek METHOD • Heat the oil in a wok or frying pan, add the mince and fry until cooked. • Slice the leek into rings and the cabbage into thin pieces, and add these to the mince. Add the vegetables and fry briefly. • Add the wok sauce and the pineapple chunks and allow them to heat through. • Add sea salt to taste. • Meanwhile, slice the baguette into equal pieces and then open crosswise. • Spread a layer – thick or thin, depending on your taste – of peanut butter and sambal onto the bread. • Pour the stir fried mince/vegetable mixture onto the bread. Vegetarians: use vegetarian mince or vegetarian stir fry pieces.
SERVES 4
10 MINUTES
INGREDIENTS 200 g smoked tofu 1 tbsp ginger syrup 2 tbsp vegetable oil 250 g mixed mushrooms a dash of sherry 800 ml mushroom stock 1 spring onion, cut into rings 2 tsp sesame seeds AND FROM FAIR TRADE ORIGINAL: 2 tbsp Soy Sauce Sambal Oelek to taste 150 g Rice Noodles (white or wholegrain) METHOD • Marinate the smoked tofu in a marinade made of ginger syrup, soy sauce and sambal to taste. • Prepare the rice noodles according to the instructions on the packet. • Heat oil in a saucepan and briefly fry the mixed mushrooms. Add a dash of sherry and the rest of the marinade. Add the stock and bring to a simmer. • Pre-heat the grill. Remove the tofu from the marinade and grill it briefly on both sides. • Divide the rice noodles between the soup bowls and pour the hot soup over them. • Just before serving, add the grilled tofu and spring onion. • Garnish with sesame seeds.
CRUNCHY THAI SALAD WITH RICE VINEGAR SERVES 4
20 MINUTES
INGREDIENTS 1 small Chinese cabbage 100 g beansprouts 200 g sugar snaps 1/2 cucumber 2 spring onions 2 tbsp sunflower oil 2 tsp fish sauce 2 tbsp fresh coriander, chopped 2 tbsp fresh basil, chopped 50 g salted peanuts AND FROM FAIR TRADE ORIGINAL: 50 ml Rice Vinegar 1 tbsp Cane Sugar Sambal Oelek to taste METHOD • Cut the cabbage into thin pieces and mix with the beansprouts in a colander. Rinse with cold water. • Bring water to a boil, and blanch the sugar snaps for a maximum of two minutes. Drain over the colander containing the cabbage and bean sprouts, and rinse with cold water. • Cut the cucumber in half lengthways, scrape out the seeds with a spoon and cut into half-moons. • Cut the spring onions into narrow rings. • Make a dressing of rice vinegar, sunflower oil, fish sauce, cane sugar and sambal. • Mix the vegetables with the fresh herbs and the marinade, and divide between four plates. Garnish with coarsely chopped peanuts. 19
LOOKING FOR NEW FANS Many people still aren’t familiar with our products. When they hear how we work alongside farmers’ organisations and with processors in the country of origin, and then when they see and taste our products, most people are really enthusiastic. And we do a lot more than just purchasing according to the rules for the seal of approval. Hidden behind many of our products is the story of an intensive search to form new trading chains in which all the links succeed. The enthusiastic reactions to this story stimulate us to go looking for current and potential fans of our range, and to tell them who we are and what we do.
We tell our story to make even more people interested in our products and to increase our impact. We mainly deliver our message using our own tools: website, newsletter, blog and social media (Facebook, Twitter, LinkedIn). In addition, we use targeted promotions to try to inform people and to inspire them to choose our products more often. THE ‘WOK BIKE’ ON TOUR After a successful debut in 2014, in the summer of 2015 our Wok Bike went on tour again to food festivals around the country. The cargo bike, converted into a Thai street food stall and equipped with an enormous wok, was in action at the SonsbeekMarkt in Arnhem, the Feelgood Market in Eindhoven, the Smaakmarkt in Nijmegen, the Streekmarkt in Utrecht and the Snorfestival in Vuren. Again this year, preparing aromatic Asian dishes in the big wok was an easy, fun way to get people interested in our Asian products and our brand.
As soon as the chef begins to cook, the festivalgoers are attracted by the aromas. They are pleasantly surprised that they can taste the dishes for free, and they are easily persuaded to buy a taster kit of five Asian products.
20
Win a Street Food Party From April to August 2015, everyone’s attention was on our Asian range. By using promotional codes on nine different products, the customer was in with a chance to win a wok goodie bag. The first prize was a Street Food Party: a visit from our Wok Bike, including a chef who made the most delicious Asian dishes for the winner and their friends in the comfort of their own home. The idea was to stimulate taster purchases among new as well as existing buyers. We stimulated people to take part using our own communication tools, a radio commercial, promotions on the shop floor and adverts in various leaflets and magazines.
GIVE YOUR HONEST OPINION To introduce the fans to our new Coffee Capsules, in September we developed the Deliciousness Test. Coffee connoisseurs could request a free packet of three capsules and leave a review on the promotional website. Bloggers were also involved in this approach, which saw the social media campaign reach 560,000 coffee connoisseurs. All 3,000 available packets were sent, and almost 700 people left one or more reviews of the coffee capsules on the promotional website. This promotion enabled us to welcome 340 new recipients of our newsletter. To follow up on the promotion, each taster packet contained a coupon for a 15% discount on the purchase of one of the three flavours of coffee capsules at Albert Heijn.
About 1,400 people took part, and 17% of the participants bought a Fair Trade Original culinary product for the first time. The number of Facebook fans grew by 20%. The Wok Bike went on to Rotterdam for a successful Street Food Party: you can read the winner’s enthusiastic reaction on our website.
TIME FOR FAIRNESS The last week of October was Fair Trade Week, which included the Time for Fairness campaign. We wanted to use this campaign to bring more people – both newcomers and people who were only familiar with a few of our products – into contact with our broad range. On the promotional site, visitors could select a mealtime (breakfast, lunch, dinner, snack, light refreshments) and a suitable product. In exchange for a review on the website, the participants could claim back the purchase price. Thanks to attention from a range of media sources and a number of food bloggers, 14,500 people visited the promotional site. 1,700 test purchases were made, of which more than half were by new customers, so we were very satisfied with the campaign.
21
4. FUTURE PLANS FAIRTRADE FIRSTS, SOCIAL IMPACT, FEWER CO2 EMISSIONS Bye bye 2015, and good to see you 2016! This year we’re going to introduce more consumers to our products, making them widely available and even more visible. We’re focused on our fans, and on new enthusiasts who we want to inspire with our (new) products and everything we’re working on. In the area of business, the focus is on expanding our sustainable and personal relationships with our partners. Note: a lot of new products will also be added to our range in 2016. We’re aiming to have at least 10 new products on the shelves, including a few (fairtrade) firsts. Naturally, we go all out to make sure that these products are introduced into as many shops as possible. In addition, we’re working on improving the existing range – the fairtrade content of a number of products in particular is drawing special attention. We don’t rest on our laurels. DEEP IN THE CHAIN It’s five years since we introduced our successful line in Thai cuisine. Of course, that’s reason enough for a party, but it is also a good moment to demonstrate the social impact for our trade partners. That’s why we go deep into the chain and ask the farmers and our processor about their experiences. We’re not only doing this in Thailand, but also in Ghana, where we buy the orange concentrate for our orange juice. In Ghana we’re doing it for the social impact we have on the orange farmers. LOCAL RECIPE The development of a new, fair trading chain often precedes the introduction of new fairtrade products. Because we prefer local processing, we are always looking for new trade partners who can make products according to local recipes to expand our range. For 2016 we have journeys planned to various Asian countries to work on the development of new trading chains there. We will start preparations with new trade partners in order to introduce new products in 2017. We are also taking steps to contribute to the improvement of the climate. We want to make the CO2 emissions caused by the processing and distribution of our products more visible, and we want to reduce them. To do this, we are in conversation with our trade partners, suppliers and distributors, and together we are investigating the options for shrinking our carbon footprint.
Are you with us? We would like to invite you to help us to make our ambitions a reality. Together, we can make the world a fairer place.
22
‘Give someone else the same opportunities you have’
23
5. OUR TEAM Did you know that the Fair Trade Original foundation was founded in 1959? That makes us the Netherlands’ first social enterprise.
Supervisory Board
Managing Director Finance & ICT
Office Management
Marketing
Product Management
Marketing Communication
Sales
Sourcing & Development
Our foundation status sets us apart from other food brands whose shareholders have the final say. Our Supervisory Board is made up of members with a great deal of managerial experience and knowledge of the food sector. They safeguard the organisation’s mission, and supervise the director. In 2015, after two four-year terms, four members of the Supervisory Board reached the maximum time in office and left the organisation. We would like to thank them very warmly for their long commitment. Since March 2016, the Supervisory Board is once again at full strength:
Sales
Trade Marketing
SUPERVISORY BOARD AS OF 11 MARCH 2016 Margreet Oostenbrink (chair from 28 December 2015) Theo Roos (member since 26 February 2010) René Bakker (member from 11 June 2015) Simone Hertzberger (member from 11 March 2016) Bart Kroon (member from 11 March 2016)
SUPERVISORY BOARD ON 1 JANUARY 2015 Jeltje Schraverus (chair until 28 December 2015) Theo Roos (member since 26 February 2010) Maarten Delfortrie (member until 11 March 2016) Harry de Grooth (member until 11 March 2016)
L-R: Theo Roos, Simone Hertzberger, René Bakker, Margreet Oostenbrink, Bart Kroon
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Operations
L-R: Yvonne Janssen, Bert Jongsma, Felice Uiterwijk, Caspar de Vries, Katrien Kloos, Harold Goessens, Chokita Srisuwan, Ralph Vermeulen, Josée van Kesteren, René Wils, Ellie Tap, Saskia van der Laan, Richard Wijnands, Loïs van Erkel, Martin Boon, Karin Schat, Mark van Noord, Jan van der Heiden, Annemarie Govaerts, Maurice van Dort, Wendy Koelemij, Margot van Veldhuisen, Lisette Brouwers
The director is tasked with the day-to-day leadership of the organisation and chairs the management team meeting. The staff choose the staff representation body (PVT) from among themselves. The three members meet regularly with the director and, on behalf of the staff, they negotiate the working conditions laid out in their own legal status regulations.
SOME FACTS ABOUT OUR TEAM • In 2015, we said goodbye to four colleagues, which meant that the number of colleagues on a full-time equivalent salary decreased from 20.9 in 2014 to 18.4 in 2015. • The average age of our colleagues went down from 47.0 in 2014 to 46.3 in 2015. • The average length of service with us among colleagues who were working here on 31 December 2015 was 14.4 years. 2015 saw four colleagues celebrate their anniversary. • Sick leave (excluding maternity leave) was reduced from 5.5% in 2014 to 1.7% in 2015, mainly due to the reduction in long-term sick leave. • The staff satisfaction survey for 2015 gave us an overall score of 7.9 (on a scale of 0 to 10). We’re proud of that!
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6. HONEST ABOUT COCONUT MILK
6%
PR
IC
4%
1%
I LANKA
AGING / PRODUCTIO N ACK
P UTS CON CO
REMIUM ADE P RTR FAI
SR
26
E
3%
1%
TR AN SP OR T
VA T
STS S CO OU E N LA EL AAR SC I VEL M HA D X MA AN
ND ED € 1 . RE T 6 5 AI L
% 18
RET AIL ER
R PO IM
44%
M ME
42%
IR FA
L GINA I R O DE ES A UTI TR TD
58%
RECO
% 23
AN D
Where does the purchase price go to for a can of coconut milk I buy in the shop?
COCONUT MILK: OUR NUMBER 1! We’re always on the lookout for tasty food and drink. In 2015, coconut milk was the fastest-growing product in our range, a sign that the consumer appreciates both the taste and its fair origin. PARTNERSHIP We believe in long-term relationships, and since 2007 we have worked with the coconut milk factory and the coconut farmers in Sri Lanka. Together, we have worked intensively on issues such as food safety, social security in the factory, an efficient trading chain and the farmers’ fairtrade certificate. By ensuring that processing takes place locally, our increasing sales of coconut milk also offer more employment opportunities in the country of origin, and thereby a boost for the local economy. PRICE X VOLUME We pay the coconut farmers according to the rules of the Fairtrade Seal of Approval. The farmers’ income is the sum of the price and the volume, which is why we keep working to increase sales of the popular coconut milk. The fair price for the coconuts makes sustainable production possible, with special attention paid to issues such as good water management. The farmers use the development premium to invest in the continuity of their farming business, such as the planting of new trees. All this offers them more security and faith in the future.
HOW DO YOU MAKE COCONUT MILK? Our producer in Sri Lanka does it this way: the grated white flesh of a ripe coconut is mixed with steam and kneaded. Coconut cream is produced by pressing the mixture. The remaining coconut pulp is once again mixed with steam; the moisture this produces is less thick, and this is what is called coconut milk. The cream from the first pressing is mixed with the milk from the second pressing, so that the end product has a smooth, regular consistency.
DID YOU KNOW THAT: • Part of the coconut milk solidifies when the product gets cooler? If that happens, just give it a good stir, or wait a bit and the solidified part will ‘melt’ in the pan. • You can whip up the thick part of the coconut milk into cream? • And that you can use this part in baking? • If you store it in the fridge, coconut milk stays edible for a few days after you open the tin? • Coconut milk freezes very well? • Coconut milk is also really tasty as a (lactose-free) coffee creamer? • People sometimes ask if there is BPA (a material that can seep into the food) in the coating on the tin? We can reassure everyone that there isn’t. • The coconut pickers use bamboo poles if they can’t get at the coconuts themselves? • We have incredibly tasty recipes with coconut milk on our website? Do you have more facts about coconut milk? We’d love to hear from you at info@fairtrade.nl
27
KOKOS QUOTES
FROM THE PEOPLE OVER THERE
‘I asked Fair Trade Original if they were interested in our newest product. Yes, absolutely! was their answer.’ Mario, Director of the coconut milk factory
‘I work my land every day. I follow the entire production process, from sowing the seed to the harvest. Fairtrade has taught me new techniques for working the land. We’ve joined forces with other coconut farmers, which has made us stronger.’ Sriyani, coconut farmer in southern Sri Lanka
‘An extra cooling system has been installed, so it’s less hot in the factory now. I’m very happy to work there. The team is great and we have the freedom we need. What am I saving for at the moment? I’m putting money aside for a tuk-tuk.’ Udara, production worker in the coconut milk factory
28
FROM THE PEOPLE HERE
‘Every single Jumbo store has our coconut milk on the shelves. Jumbo also contributed financially to the renovation of a school in the coconut farmers’ village, and later the director of the coconut milk factory came to visit the supermarket.’ Saskia, Account Manager at Fair Trade Original
‘Together with the managers of the coconut milk factory, we prepared the farmers for the Fairtrade certificate. At the start of 2015 the seal of approval on the tins of coconut milk was a reality. A fantastic moment!’ Martin, Development Manager at Fair Trade Original
‘Meanwhile our range of products that complement the coconut milk is growing, such as the Thai curry spice pastes. Of course I hope they’ll become just as popular.’ Lisette, Product Manager at Fair Trade Original
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7. GOOD QUESTION!
We receive a lot of questions here at Fair Trade Original. Critical questions too, and we love those because they give us the chance to explain what we do, and how and why we do it. That’s why we think every question is a good question! This time the questions and answers are about the price of our products:
What happens to the profits Fair Trade Original makes? Fair Trade Original is a non-profit-making foundation. If we make a profit, as in 2015, we reinvest it in our work, both here and where our trade partners are.
Why is the price of a product different in different places? In law, a manufacturer’s recommended retail price cannot be binding. Each store chain sets its own prices on the shelf. That’s why the real retail price varies between chains, and prices can even differ between individual stores within a chain.
Does the recommended retail price change regularly? No, not even if there are constant fluctuations in the purchase price over the course of the year, which can happen if the commodity prices go up or down. This can be a result of changes in supply and demand or of speculation. The exchange rate can also make a product more or less expensive. Despite this, we try to keep the recommended retail price as stable as possible, by absorbing as much of the fluctuation as we can.
30
Couldn’t you pay the farmer more, so he can build a better life sooner? We pay the farmer the fairtrade price, according to fairtrade principles, plus the development premium on top of that. It’s a fair price that gives the farmer real compensation, security and a better foundation for the future. For example, we guarantee a minimum price for the coconuts, which gives the farmers security. If we paid more, that would increase the price in the shop, and consumers would choose other products. In practice, that also means that we pay a cooperative, which then pays the farmer. On top of the price, the cooperative receives a 15% development premium which the farmers can spend as they see fit. A separate part (23%) of the price of a tin of coconut milk goes towards production and processing in Sri Lanka. That means better employment opportunities and added value in that country.
Does the farmer earn more by selling his products to you? We don’t know if he earns more, because we don’t know what other clients pay. We do know that our farmers have more security against a price drop, and the certainty of a minimum price – even if the (world) market price falls. In addition, the farmers benefit from the development premium and in some cases we work with them on extra development programmes.
Why don’t you process all your products in the country of origin, so people can earn more locally? Our policy is to do as much of our packaging as possible in the country of origin, just as we do with the coconut milk. That is not achievable with some products. In that sense, each product tells a different story. Take coffee, for instance. It’s tricky to roast and package coffee in the country of production, because taste preferences and blends vary significantly between countries. It would be almost impossible for a coffee roasting plant in Africa or Latin America to find exactly the right flavour for each export country. It would also be impractical for us, since we order relatively small amounts. Another example is fruit juice. For one thing, it’s much more convenient to transport concentrate than to transport juice (which carries more risk of loss of quality during transportation). What’s more, the ingredients for the Tropical Juice – which come from all over the world – are combined here in Europe.
Why are your products more expensive than other brands? Trading fairly costs money. We spend a lot of money on fairtrade, because that is the basis for a fair price. Consider the licence to carry a Fairtrade Seal of Approval, the fairtrade development premium for the farmers, and other development expenses. In total, that’s 7% of our net turnover, and that makes our products more expensive. In addition, we are a relatively small player. The number of products we sell is much smaller than that of the large brands and multinationals. That means we have higher costs per unit, for example for product development and relatively higher packaging costs.
Do you also look critically at your own costs and salaries? Absolutely! We are a compact company with a small team. Our salaries match market rates and we have low overheads. We are a foundation and we don’t go after big profits. We are active in a competitive market, so we invest money and energy in our brand. A prominent position on the shelf and at home in the kitchen is of course good news for the farmers and suppliers.
DO YOU ALSO HAVE A QUESTION? SEND IT TO INFO@FAIRTRADE.NL
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8. OUR FIGURES FOR 2015 BALANCE SHEET AS AT 31 DECEMBER 2015 EUR
2015
2014
FIXED ASSETS Intangible fixed assets Tangible fixed assets Financial fixed assets ······················································
81,501 5,603 87,104
31,489 121,301 5,518 158,308
CURRENT ASSETS Stock Trade accounts receivable Advance financing of trading partners Other receivables and prepayments Liquid assets ······················································
2,527,724 2,842,133 104,354 107,273 1,002,121 6,583,605
2,211,032 2,026,710 120,267 142,679 4,500,688
TOTAL
6,670,709
4,658,996
2,211,651
1,848,686
13,078
23,230
982,434
982,434
SHORT-TERM DEBTS Trade accounts payable Current account Stichting Fair Trade Assistance Taxes and social security costs Other payables and accrued liabilities ······················································
657,180 2,124,850 185,580 495,936 3,463,546
610,948 295,906 162,323 735,469 1,804,646
TOTAL
6,670,709
4,658,996
EQUITY Other reserves PROVISIONS LONG-TERM DEBTS Interest-free loan
32
EUR
GROSS MARGIN Net turnover Cost of sales ······················································ Other income COSTS Personnel costs Amortisation Selling costs Costs for premises General costs ······················································ RESULT FROM ORDINARY OPERATIONS Financial income and expenditure OPERATING RESULT
2015
2014
14,700,453 10,937,436 3,763,017
13,655,155 9,531,125 4,124,030
32,669
55,070
1,623,294 77,697 1,308,760 116,071 289,635 3,415,457
1,874,436 79,990 1,568,886 147,828 334,444 4,005,584
380,229
173,516
-17,264
-6,079
362,965
167,437
Fair Trade Original’s Annual Accounts can be found at www.fairtrade.nl/english Our contribution to the development of fairtrade 1,000,000
In 2015, 6.5% of our turnover went towards the development of fairtrade. Here’s a summary of our expenditures: 1. Fairtrade premiums This is the fairtrade development premium that cooperatives of fairtrade farmers receive for the fairtrade ingredients supplied to Fair Trade Original. This amount includes estimates, but we have calculated it as accurately as possible.
900,000 800,000 700,000 600,000
2. Development expenses The development expenses include all costs we have incurred to support our trade partners, such as the costs for bringing in local consultants, travel expenses and the salaries of our Development Managers.
500,000 400,000 300,000 200,000 100,000 2015
2014
Max Havelaar licence fee Development expenses Fairtrade premiums
3. Licence fees paid to Max Havelaar and Fair for Life Fair Trade Original pays a fee to the certifying organisations. These organisations use this fee to cover costs such as local inspections, support for cooperatives, research, development of standards and the promotion of the seal of approval. Our goal for 2016 is to spend 7% of our turnover on developing fairtrade.
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GLOSSARY
A
AMBITION: We have been active since 1959,
necessary, and in that way you neutralise your
(fairtrade) ingredients, transport, packaging
and since the very beginning we have been a
own emissions. At the same time, you contribute
material and workers’ wages. To ensure that the
pioneer of fairtrade. We are keen to continue
to the fight against pollution, especially in
final product remains attractively priced when it
to fulfil this role in order to make our dream,
developing countries.
reaches the consumer, the key is to stay aware of
of ultimately making all trade fair and transparent, a reality.
the costs along the entire trading chain.
CLIMATE NEUTRAL: Being climate neutral means that you make no net contribution to
COSTS: All links in the chain incur costs. The
ANNUAL REPORT: In this Update! we provide
climate change. You can do that by restricting
farmers pay for seed and fertiliser. The
an overview of the most important activities and
your own CO2 emissions as much as possible and
cooperative buys farm machinery and employs
results from the past year, and we give a brief
by compensating for the remaining emissions.
people to do the administration and sometimes part of the initial processing. In the final
financial account of our income and expenditures.
CO2: Carbon dioxide (CO2) is a gas that is
processing stage, we supply our Fair Trade
ASSORTMENT: Our range is limitless. Whether
present in the atmosphere and is primarily
Original packaging design; the product is
for breakfast, lunch, light refreshments, dinner or
created when energy is generated from fossil
packaged, shipped and distributed; and we
of course for coffee and tea, there’s a flavourful
fuels. This is damaging the environment more and
advertise it and offer information about our
Fair Trade Original product for every moment of
more, which is why CO2 reduction is receiving
business practices. Each step is taken by people
the day.
more attention.
who are paid for their work. We strive to ensure that as much of the work as possible takes place
···········································
C
CARBON CREDIT: One carbon credit (CO2
COLLABORATION: Within a number of
in the country of origin, and that as many people
right) compensates for one ton of CO2 emissions.
trading chains there is very intensive collaboration
as possible benefit from that in the right
Organisations that sell carbon credits use the
between us and the farmers and processors.
conditions. That doesn’t change the fact that
income to finance environmental regulations
We visit them regularly; develop products
most of the costs are usually incurred in Europe,
which
together; work on (maintaining) certification;
which mainly comes about because the (staff)
make
with
costs here are significantly higher, but that
implementation, looking for financing for extra
doesn’t take away from the fact that the farmers
CERTIFICATION: To make a product eligible
investments, etc. Other fairtrade chains work
have received a good price and thereby also a fair
for the Fairtrade Seal of Approval of the Max
independently, or receive outside assistance,
income. See the Honest About Coconut Milk
Havelaar Foundation or Fair for Life, the parties
in which case our contacts are less necessary and
infographic on page 26.
(farmers, processors, traders) who play a role in
less intensive.
···········································
right (i.e. not contracted by third parties) must be
COOPERATIVE: People are stronger together,
‘fairtrade premium’, we also use the term
certified. Inspectors visit them to make sure they
which is why fairtrade farmers are always united in
‘development premium’, because that shows
are observing the rules. These inspections may be
a partnership. That is usually a cooperative or
where the money is intended to go: on projects
announced, or they may be surprise visits, and
association, in which each member has an equal
which contribute to the farmers’ development.
they focus on both what is confirmed on paper
say.
They use it to invest in production, their
(such as in minutes and contracts) and what
management board and decide on their plans
organisation,
actually happens in practice (interviews, visits to
during an annual general assembly. Sometimes
community.
farms). Fairtrade farmers are certified as a group
several cooperatives come together in a union or
···········································
(usually as a cooperative), which means that each
federation, which allows them to pool their
EMPOWERMENT: The goal of fairtrade is for
individual member must meet all the requirements.
activities and gives them more clout in market
small-scale farmers in developing countries to
Fair Trade Original is also certified.
negotiations.
strengthen their position in terms of production,
neutralise
the
emissions
they’re
compensating for.
development
plans;
and
help
DEVELOPMENT PREMIUM: Instead of
the production and trade process in their own
The
members
collectively
choose
a
D E their
families
or
the
entire
business operations and the sale of their
CLIMATE COMPENSATION: Not all CO2
COST PRICE: In fairtrade, the costs of
products. In that way, they have more say in their
emissions can be avoided. By buying CO2 rights
sustainable production (C.O.S.P.) are taken into
own life and in those of their family and the
you can compensate for the negative effects. For
consideration. That means that the cost price
community. If we buy from large fairtrade
example,
environmental
includes the costs for sustainable production. The
plantations, the empowerment is focused on
regulations in places where that is especially
most significant costs include the purchase of the
the workers.
you
can
finance
···········································
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···········································
FAIR FOR LIFE: Fair for Life is a fairtrade label.
FAIRTRADE PREMIUM: On top of an honest
HISTORY: Fair Trade Original was founded in
In the Netherlands it is less well-known than the
price for their products, farmers’ cooperatives
1959 by Paul Meijs. After fundraising for a number
Max Havelaar label, but in fact there are many
receive a fairtrade premium which allows them to
of years to benefit workshops and the like in
similarities between the two initiatives. In the case
realise their own projects. The amount of the
developing countries, he gradually realised that it
of products for which Max Havelaar has no
premium is set by Fairtrade International. The
would be more sensible to buy their products for a
standard, we choose the Fair for Life label, which
money is set aside in a separate fund within the
fair price. Trade, not aid: that would give the
you can recognise on our products by this logo:
cooperative, and the farmers collectively decide
producers an income, and they could build their
how to spend it. They may spend it on improving
own future. This was the start of the fairtrade
the harvest; more environmentally friendly crops;
movement. The first figurines came from Haiti in
investments in storage spaces, roads or buildings;
1967, and in 1973 the first fairly traded coffee in the
a contribution to environmental projects; or on
world arrived in the port of Amsterdam.
healthcare or education.
···········································
F
FAIR TRADE ORIGINAL: Fair Trade Original is
H
IMPACT: As an organisation with a social goal,
a not-for-profit brand with a 100% fairtrade range. The organisation was founded in 1959, and in 1973
FARMERS: Millions of small-scale farmers in
we want to set positive change in motion in the
our founder bought the world’s first fairly traded
Africa, Asia and Latin America grow the
lives of the farmers from whom we buy our
coffee from farmers in Guatemala. We still buy
ingredients – such as coffee beans, rice, coconuts
products. A snowball effect means that the social
coffee from the same cooperative. Since then, we
and sugar cane – which form the basis for the
impact we realise through our business practices
have achieved a lot of fairtrade (world) firsts, the
products we eat and drink here in the Netherlands.
goes further than the direct results of just our own
most recent being fairtrade sambal in 2014. These
They do the hard work and are often the weakest
activities. It enables many cooperatives to use the
firsts were possible because we develop our
link in the trading chain. Fairtrade farmers are
development premium to pay for education in
products ourselves, along with farmers’ groups
organised in cooperatives or other partnerships,
their village, healthcare or better roads. And with
and processors, and we set up fair trading chains.
and they can count on fairtrade conditions. Some
greater prosperity, a village can support new
We do this to encourage others to follow our
products, such as tea and wine, come from large
economic activity such as shops.
example and to gradually make fairtrade
plantations or farms. In that case, the workers
···········································
practices the norm.
benefit from the development premium, which
LICENCE COSTS: As a licence holder of
they can spend as they see fit.
Max Havelaar’s Fairtrade Seal of Approval,
FAIRTRADE: Fairtrade (eerlijke handel in
I
L
we pay licence costs per product sold. These
Dutch) is an international movement which is
FOUNDATION: Fair Trade Original is a
costs are included in the sales price. The Max
committed to better trading conditions for small-
Foundation. There are no shareholders to receive
Havelaar Foundation uses this money for the
scale farmers in developing countries, so they can
part of the profit. Whatever profit remains after all
promotion of the label and works with Fairtrade
invest in their future. These farmers - both men
costs have been deducted is invested in our
International to expand the seal of approval
and women - do the hard work and are often the
mission.
programme further.
their position, fairtrade contributes structurally to
FIGURES: You can see the figures for our
LOGO: You can always recognise our products
the fight against poverty. The farmers receive a
financial operations in the Annual Accounts at
from our logo on the packaging. The logo may
fair price for their product and a development
www.fairtrade.nl/english.
appear in various colours, depending on the
premium (fairtrade premium). The price makes
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product – after all, we have a colourful range!
sustainable production possible, from start to
GOLD STANDARD: The Gold Standard is a
In communications from our own organisation,
finish.
seal of approval for CO2 rights, to which a
nine times out of ten our logo is orange:
weakest link in the trading chain. By strengthening
G
fairtrade component is also added.
FAIRTRADE INTERNATIONAL: Fairtrade International is the international organisation
GROSS MARGIN: The gross margin is the profit
behind Max Havelaar’s Fairtrade Seal of
we make on our products after the direct costs
Approval. Fairtrade International determines the
(the purchase price) have been deducted. We pay
standards for the label, which include the rules
our indirect costs such as distribution, marketing
MARGIN: Everyone in the fairtrade trading
the farmers and the traders in the trading chain
and salaries from the gross margin. Our Annual
chain, from the farmer to the supermarket, adds a
must obey. The Max Havelaar Foundation owns
Accounts clearly set out our income and
financial margin when selling their product. This
the seal of approval in the Netherlands.
expenditures.
margin covers costs and creates space to invest
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M
in the company.
FAIRTRADE LABEL: There are several quality
GUARANTEE: The Fairtrade Seal of Approval
labels, which stand surety for their own fairtrade
on our products guarantees that the ingredients
MARKET PRICE: The market price is the price
standard. The vast majority of our products carry
have been produced and purchased according to
paid for a product at a given moment, and is
the label from Max Havelaar. A few products carry
fairtrade practices. Most of our products carry
dependent on supply and demand. If a product
the Fair for Life label.
the Max Havelaar label; some carry the Fair for
becomes scarcer, for example because the
Life label.
35
harvest is coming to an end, the prices go up. But if there is a good supply of the same product in another country, the prices will go down. And, surprisingly enough, if the price of sugar goes up, the price of honey also goes up, because they are both sweeteners. The market price continuously fluctuates like this, often outside the control of parties with direct interests. This can be disastrous for small farmers, because they can’t simply quickly grow a different product. That’s why fairtrade uses a guaranteed minimum price for most products. Even if the market price falls below that level, the minimum price must always be paid. If the market price rises, the price paid by fairtrade buyers rises too.
MASS BALANCE: The fairtrade ingredients bought for our products are not always actually included in fairtrade products. For example, sometimes some fairtrade cocoa beans will end up in a non-fairtrade chocolate bar, and vice versa. The trade-off between fairtrade and nonfairtrade ingredients is known as ‘mass balance’. The balance requires that there be a direct relationship between the amount of the fairtrade end product and the amount of fairtrade ingredients purchased. Fairtrade International’s guidelines facilitate the application of mass balance to cacao, cane sugar, fruit juice and tea. It is sometimes physically impractical – or too expensive – to keep the relatively small amounts of fairtrade ingredients separate from the nonfairtrade ingredients during the production process. Mass balance prevents fairtrade farmers losing out because of the practical requirements of a processing plant. It makes no difference to the farmers: in any case they receive the correct amount of the fairtrade development premium.
MAX HAVELAAR SEAL OF APPROVAL: The Max Havelaar Foundation is the owner of the Fairtrade Seal of Approval in the Netherlands The foundation grants licences for the seal of approval and promotes it. You can recognise the label on our products by this logo:
MIDDLEMEN: By purchasing as directly as
requirements for organic farming. These products
possible from our trade partners, we avoid those
are recognisable by this logo on the packaging:
middlemen whose only goal is to make large profits at the expense of the farmers. That does not mean that we always purchase directly and in person from the farmers or processors; when purchasing some products (such as coffee, tea
ORIGIN: The fairtrade ingredients in our
and fruit juices), we call on the support of
products come from Africa, Asia and Latin
specialist companies. Their expertise lets us know
America. Wherever possible, the ingredients are
for sure that we can deliver good, consistent
processed into the end product in the country of
quality. The scale at which they work also delivers
origin. When that is not possible, we look for a
a price advantage in the areas of transport and
partner in Europe who at least has a favourable
storage. The specialist companies naturally make
attitude towards fairtrade and offers maximum
purchases from the right cooperatives, according
openness in business.
to the fairtrade guidelines and in collaboration
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P
PACKAGING: All our packaging displays a
with us.
short text about the value of fairtrade for the
MISSION: Our stake in fair and transparent
farmers concerned, and the ingredients are also
trade is this: We develop fair, international trading
clearly listed. In this way the boxes, tins, packets
chains and make fair food and drink widely
and pots not only provide protection for the
accessible for the consumer.
product, but they also contribute to a transparent
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trading chain.
N O
NET MARGIN: The net margin is the profit left over from the sale after all costs have been
PREMIUM: On top of a fair price for their
deducted.
products, farmers’ organisations also receive a fairtrade premium which allows them to realise
NEWSLETTER: Do you want to stay up to date
their own projects. The amount of the premium is
with all the latest news about our products, great
set by Fairtrade International. The money is set
promotions, delicious recipes and our fairtrade
aside in a separate fund within the cooperative,
business practices? Sign up for our Newsletter at
and the farmers decide collectively how to spend
www.fairtrade.nl/nieuwsbrief (in Dutch).
it. They may spend it on improving the harvest or
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on
more
environmentally
friendly
crops;
OPEN: Fair Trade Original aims to be an open
investments in storage spaces, roads or buildings;
and transparent organisation, for everyone
a
concerned. On the website and in this Update! we
healthcare, education, etc. This fund is managed
offer insight into our activities and the way we
by the Fairtrade Premium Committee. On
work. On our product packaging we state where
plantations and large farms, the employees
the ingredients come from. We answer questions
manage the fund, also within a formally
posed by e-mail and on social media as quickly as
established Fairtrade Premium Committee.
contribution
to
environmental
projects,
possible, so that consumers can decide for themselves whether our products meet their
PRICE: Products have a raw material price, cost
expectations.
price, purchase price, sales price, recommended retail price, market price and world market price.
ORGANIC:
on
Each price is constructed differently and covers
conserving the environment, nature and the
specific costs in the production and trade process.
Organic
growers
focus
landscape, and on animal welfare. The farmers do
Max Havelaar is part of Fairtrade International. There are more than 20 similar organisations throughout the world which promote fairtrade in their own countries.
36
not use chemical pesticides, and their fertilisers
PRICE FOR RAW MATERIALS: Each product
and organic products contain no artificial
is made from one or more raw materials. In the
fragrances, colours, flavours or preservatives.
case of our food products, those are the
As well as the social impact, the fairtrade
ingredients. Wherever possible, we purchase
standards include very extensive environmental
fairtrade ingredients. In many cases, the purchase
regulations, but these do not go as far as the rules
price paid to the farmers’ cooperatives is linked to
for organic crops. As well as meeting the fairtrade
the world market price (for example coffee, cacao
standard, some of our products also meet the
and sugar) or the local market price (for example,
chilli peppers). If a minimum price is agreed, that
(coffee, tea, wine and juices) and confectionery.
chains with national coverage. Other retail
price will always be paid, even if the world market
See: www.fairtrade.nl/producten.
formulas are stronger in specific regions, such as Deen (North Holland), MCD (South Holland) or
price drops below that level. In all cases, the cooperatives also receive a fairtrade premium for
PROFIT: Even a Foundation like ours needs to
Marqt (the Randstad region). In addition, we are
their product.
make a profit. The more profit, the better, in fact,
also available online, via the World Shops,
because we invest it straight back into the
WAAR and countless specialist shops that are
PRICE GUARANTEE: Buyers who purchase
expansion of our work, both with the producers
not affiliated with a chain. To find out where you
products from fairtrade farmers’ cooperatives are
and here in the Netherlands. The profits we make
can buy our products, see: www.fairtrade.nl/
required to pay a minimum price. This minimum
after all the costs have been deducted does not
waar-te-koop.
price must enable the farmers to cover the costs
leak out of the organisation through shareholders,
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of sustainable production. If the (world) market
but is retained to help us achieve our mission.
SALES: We consider the number of items we sell
price is higher than the minimum price, the
We think that’s fair.
more important than our turnover, because for
cooperatives naturally receive the higher price, so
S
each unit sold, the farmers receive both a fair
the minimum price functions as a safety net,
PURCHASE PRICE: Our purchase price is the
offering greater security.
sum of the price for the ingredients, including the
price and the fairtrade development premium.
fairtrade premium (see ‘Price for raw materials’),
SALES PRICE: Our sales price is the price we
PRICING STRUCTURE: The pricing structure
processing the ingredients into the end product,
charge the retailers. They then determine their
of a fairtrade product is the sum of the – often
storage, transport and insurance: basically,
own profit margin, and thereby also the final sales
higher – price paid for the ingredients, the
all the costs incurred until the boat carrying the
price they charge the consumer.
fairtrade premium, costs for various processes,
product arrives in Rotterdam.
transport and distribution, licence costs for the
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SPECULATION: Just as with oil, the buying
seal of approval, marketing and sales, and on top
QUALITY: Fair Trade Original aims for good
and selling of large amounts of coffee invites
of this the structure also includes VAT. Because
quality in every area, especially where our
considerable speculation. This speculation has a
fairtrade production and trade are often carried
products are concerned. We invest a great deal of
significant effect on the world market price of
out on a smaller scale than those of many regular
time and energy into working with our trade
coffee, and thereby also on the income of the
brands,
higher.
partners on products which meet the highest
coffee farmers. Fairtrade coffee cooperatives
See the Honest About Coconut Milk infographic
possible standards in terms of flavour, food safety
learn how to deal with price fluctuations, so they
on page 26
and attractive presentation. In our own work as a
don’t end up being the ones bearing all the cost. In
leading brand in the Netherlands, we also set high
addition, they can count on the guaranteed
PRINCIPLES: The 10 internationally agreed
quality standards.
fairtrade minimum price.
fairtrade principles lie at the heart of our work. In
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the
costs
are
somewhat
Q R
summary, that means that: we commit to working
RECIPE: Fancy a tasty meal after all this
STAFF: Fair Trade Original has 21 employees.
with small farmers united in cooperatives and with
information? See: www.fairtrade.nl/recepten.
You can see the different departments in our
employees on plantations; fair and sustainable
organisation chart.
conditions apply to our trade; and as well as social
RECOMMENDED RETAIL PRICE: It is illegal
aspects,
also
for a brand to set a fixed retail price for products.
SUPERMARKET: Our products are available in
respected. We ourselves also commit to playing
That’s why we work with a recommended retail
most supermarkets in the Netherlands. The range
an active role within the development of
price, which also includes a profit margin for the
on offer varies by supermarket chain, and often
new trading chains and having a strong
retailers. If a seller wants to use a larger or smaller
also between individual stores. To make fair food
preference for the products to be processed in the
margin, they are free to do so. That’s why the
widely accessible, we do our very best to get
country of origin.
same product can be sold at a different price in
our range onto as wide a variety of shelves
different shops.
as possible.
environmental
criteria
are
PRODUCERS: Farmers, cooperatives and processors all contribute to making our products.
RESPONSIBLE: We only consider production
SUSTAINABLE PRODUCTION: Sustainable
For us, the interests of the farmers and workers/
and trade sustainable and responsible if all
production takes people and the environment
employees
are
parties receive a fair share of the revenue and if
into account, and is economically profitable.
paramount. We choose fairtrade in order to offer
in
developing
countries
everyone communicates with each other openly
This is often referred to as the 3Ps: People, Planet,
them a better existence.
and respectfully. Responsible production also
Profit.
takes the environment into consideration.
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PRODUCTS: Fair Trade Original offers a wide
T
TRACEABLE: Food safety considerations
range of products that fall into a number
RETAIL
FORMULA: Our products are
mean that, by law, the ingredients of food
of categories: the Asian line (such as rice,
available throughout the country and in almost all
products must be traceable back to the source.
coconut
breakfast
supermarket formulas. Supermarket chains such
Only then is a proper response possible in case
(from chocolate sprinkles to honey), drinks
as Albert Heijn, Jumbo and Plus are well-known
something goes wrong somewhere along the
milk
and
soy
sauce),
37
production chain. We believe that it is also
and/or package the product through a third
VISION: Our dream is: Trade that is fair and
important from a fairtrade point of view that the
party. Wherever possible, we try to maintain
transparent from farmer to consumer. We work
source of our products be made known. That’s
oversight of the entire trading chain, and we make
towards this every day, and we stimulate others to
why we prefer to keep an eye on the entire
improvements in collaboration with the individual
do the same.
production chain. With many of our products that
links. We also set up new trading chains, all the
is the case, but some production processes are so
way from farm to fork, which gives more farmers
VOLUME: The more kilograms of coffee, cacao
complex that the fairtrade ingredients cannot
access to fairtrade and makes fair food and drink
beans or sugar cane farmers’ cooperatives sell,
physically be separated from their non fairtrade
increasingly available to the consumer.
the more the affiliated farmers can profit from the
equivalents, and in those cases we resort to the mass balance principle.
fair price and the development premium paid for
TRANSPARENCY: In many chains we have
those products. That’s why it’s important that
intensive and personal contact with the various
more and more people buy fairtrade products. ···········································
TRADE PARTNER: Fairtrade is a long-term
links. That means that we know what is going on in
goal: improving living standards for small farmers
the chain, and we can let the consumer know
WORLD MARKET PRICE: Many ingredients
in developing countries will not happen overnight.
where our products come from and why each
have a world market price, determined on the
We never work alone in this effort. Openness and
purchase is important to the farmers. This kind of
stock market or by market leaders. The world
mutual trust are indispensable in the trading
transparency requires the cooperation of all
market price is dependent on factors such as
chain, which is why we call the people we
parties, so we demand great openness from
speculation, the potential failure of harvests or
work with in Africa, Asia and Latin America our
everyone, and we offer that ourselves too.
the oil price, which pushes up the price of
trade partners.
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production. If the world market price goes up, the
VALUE: Everyone in the trading chain who adds
amount fairtrade farmers receive for their product
TRADING CHAIN: How a fairtrade trading
something to a product adds value, and can
also increases. Conversely, the prices also fall
chain is constructed depends on the product and
therefore go on to sell the product at a higher
accordingly, down to the guaranteed minimum
the process it has to undergo. The rules of the
price. It is important to Fair Trade Original that as
price. The cooperatives can at least count on this
Fairtrade Seal of Approval state that everyone
much value as possible is added in the country of
price.
who at any moment becomes the owner of the
origin, as long, of course, as this takes place in
product (whether as a processor or as a trader)
good (working) conditions and results in a good
WORLD SHOPS: The retail formula that has
must also be fairtrade certified. That means that
quality product. That means that a significant
sold our products for the longest is the
everyone in the trading chain is accountable. This
number of our products are processed into the
Wereldwinkel (World Shops) in the Netherlands.
does not apply to the retailers who eventually put
end product in their country of origin. For all sorts
As specialist retailers, the World Shops commit
the product on their shelves.
of practical reasons, this is by no means always
entirely to selling fairtrade products, both food
possible. Our products arrive in the Netherlands
and gifts & living. Most of the shops carry a wide
Our products pass through a short or long trading
by boat: a journey of several weeks can result in
range of Fair Trade Original products that are
chain before they reach the consumer. Farmers
the loss of too much quality from the end product.
easily located in the food aisle.
grow the ingredients; a processing plant in the
At the same time, during the journey a
country of origin or in Europe turns those
considerable part of the time before the Use By
WORLD TRADE: Rice, oranges and coconuts
ingredients into a product for us; we get it to the
date will lapse. What’s more, standards in the
do not grow in the Netherlands, and European
retailers (such as the supermarket or the World
countries of origin do not always match the
honey production is too limited to fully meet the
Shops); and they put it on the shelves. Sometimes
flavour and quality requirements of the Dutch
demand. International trade flows exist for this
more links are necessary, for instance if a product
consumer. In these cases, we choose to process
reason. Fairtrade only buys from producers in
needs more processing (as in the case of
the products in Europe.
developing countries, and thereby protects the
chocolate) or if it is more efficient to purchase
38
V
W
interests of the weakest links in the chain.
‘The chocolate sprinkles on your sandwich make a big difference’ 39
‘By developing international trading chains, we make fair food and drink accessible to everyone’