Published: 04 November 2005
Nestle's move into Fairtrade coffee has provoked a mixed reaction.A mixture of agitation, angst and positivity greeted the news that Nestle has embraced ethical consumerism with a new Fairtrade coffee offering. Although the company will undoubtedly bring marketing muscle to the Fairtrade movement, sceptics fear that the multinational"s past reputation may undermine the ethical credentials of the label. The new "Partners Blend" label is a soluble instant coffee made from Arabica grown by smallholders in El Salvador and Ethiopia. It will carry the Fairtrade certification, which guarantees certain developmental, employment and environmental standards, as well as a premium for the farming community. Until now "Fairtrade" coffee has been predominantly pushed by smaller players trying to ensure that farmers are rewarded fairly. This perhaps explains why the Fairtrade Foundation has heralded Nestle"s move as "a turning point for Fairtrade in the UK"; finally a major coffee roaster has overtly thrown its hat into the Fairtrade ring in Britain. Elsewhere, Nestle"s American rival, Kraft, has already teamed up with Rainforest Alliance, to introduce Kenco Sustainable Development. Nestle, like any good marketer, is of course playing the social responsibility card, having identified what it describes as a "significant consumer demand". Indeed, Datamonitor research shows that on average 57% of European and US consumers believe that it is important to buy ethical or socially responsible products. Equally significant is that the food and drinks industry was identified as being the one to which ethics mattered most. After all, it uniquely covers the entire value chain from production of raw materials to that of ingredients, through to their processing, packaging, marketing and distribution. The caution that has greeted Nestle"s new offering stems from a fear that its ethical track record may undermine the status of the Fairtrade label. After all, the label"s success has, in part, been built on the fact that it offers consumers reassurance that the product offering is not associated with the kind of exploitative practices that often provoke criticism of mass market players like Nestle. Existing Fairtrade producers, meanwhile, will be looking on with more than a hint of concern. If major roasters such as Nestle succeed in jumping onto the ethical bandwagon without undermining Fairtrade"s credibility, they are likely to take a significant proportion of sales, which in the long term spells a "lose-lose" situation for the smaller ethical players.