The Fair Trade Story
Author(s): Kai Hockerts
Institution: INSEAD, France
Competition Year: 2005
Place: 2nd place
Key words: Fair trade, Alternative trade organisations, Developing countries
Courses: Non-Profit Management, Public Policy
Target audience: MBA
This case traces the evolution of fair trade, from ‘charity trade', i.e. the sale of objects produced in developing countries with little functional value to the sale of functional, and often organic products to developed countries, the increasing role of alternative trade organisations in providing minimum prices, finance, training and other trade ‘premiums’ which are necessary tools for marginal producers to gain access to the global market; the role of consumer support.
The 1980’s found flattened sales met with increased attention to consumer marketing, product development and product quality by ATO’s and an international standard for fair trade. In the late 1990’s fair trade ATO’s struggled with the tension between the notions of altruistic sales and a development focus, versus a focus on customer satisfaction and supply chain management. The shift from producer advantages to product quality and customer satisfaction was made in the late 1990’s in advertising campaigns. The case ends with questions about achieving a balance between market oriented and social/developmental goals.
Case Purchase Information
This case was published in: Hockerts, K. “CaféDirect: Fair Trade as Social Entrepreneurship”, In F. Perrini (Ed.), The New Social Entrepreneurship, What Awaits Social Entrepreneurial Ventures: Edward Elgar, 2006.