Everyone's a winner

29 June, 2007

Improved quality, consumer demand, good returns - what's not to like about ethical wines, asks Emma Eversham

Fairtrade-accredited wines have come a long way since they were first introduced to the UK ­market in 2004.

Then, just three wines from South African producer Thandi, a Pinot Noir,

Chardonnay and Cabernet ­Sauvignon, sported the distinctive black, blue and green logo. Now more than 130 types of Fairtrade wine are on sale in a market which is estimated to be worth £7 million , according to Nielsen figures.

But what exactly does it mean when a wine has Fairtrade accreditation and what incentives are there for retailers to sell it?

To bear the logo, a product must meet international Fairtrade standards set by Fairtrade Labelling Organisations, the international certification body.

FLO will inspect organisations that supply Fairtrade products and ensure they are following internationally agreed labour standards that they: must recognise trade unions; will not use child or forced labour; will not discriminate on the basis of sex, religion or caste; and will provide decent working conditions.

Just as importantly, organisations must also receive a minimum price for products to cover the growers' costs as well as a premium that can be re-invested in the business or given to the community.

Co-op leads the charge

The Co-op was the first supermarket to embrace Fairtrade by selling Café Direct coffee in 1992. It introduced the first supermarket own- label fairly-traded wine to the market in 2001, three years before FLO recognised wine as a Fairtrade product, and has become a kind of retail ambassador for Fairtrade.

"We now have 12 own-label and two branded Fairtrade wines, which is the largest range of any retailer," says category marketing manager Vicky Steel, who has seen first-hand how Fairtrade products can benefit everyone involved.

The retailer now holds more than a quarter of the market share of such products and they are performing well. From 2005 to 2006, its volume sales of Fairtrade products increased by 46 per cent, with a third of those sales being wine.

The Co-op's decision to increase its offering was not so much for ethical reasons as for a business one.

Steel says: "It's what our customers want. We moved all our chocolate and own-label coffee to Fairtrade . As soon as we did that our sales increased. It's a win-win situation. It's not a case of why do it, it's almost why not? Customers get what they want and we are able to help people in countries such as South Africa."

Upping the ante

Like Co-op, the Thresher Group has an own-label Fairtrade wine range. Origin consists of four wines from South Africa, but the chain is ambitiously looking to increase its Fairtrade offering to 15 in the next two years.

A spokesman says quality is improving constantly with Fairtrade-accredited wine and therefore consumers are choosing it for an enjoyable drinking experience, not simply because of its ethical credentials.

He says: "We see major growth potential for Fairtrade. All wines are starting to get a bigger meaning and by supporting Fairtrade we are not just investing in the wine, but the whole community.

"However, Fairtrade has to stack up. Quality is paramount or they just wouldn't sell. People in the past have thought maybe they wouldn't be such good quality, but the wines are coming on in leaps and bounds."

Other big retailers have been following suit: Sainsbury's, Tesco, Morrisons, Waitrose and Asda all stock Fairtrade wines and Marks & Spencer has announced it will be increasing its range "considerably" over the next year.

This year it added two Fairtrade wines from South America to its current South African offerings in response to consumer demand.

However, not all retailers are as upbeat about Fairtrade. Although Waitrose stocks four Fairtrade wines, the store prefers to trade through the Waitrose Foundation, a partnership created in 2005 to improve the lives of the farm workers who grow and pick the retailer's South African citrus fruit, mangoes, grapes, avocado s and stone fruit.

Waitrose wine buyer Andrew Shaw is dubious about the need for Fairtrade wine at all: "We would like to think that all of our range has fair trade about it. We wouldn't buy non-ethically traded wine," he says.

He warns that anyone stocking Fairtrade wine should be prepared to stick with it because those producing it rely more heavily on sales than anyone else. He also says retailers wh ich suddenly stop selling it run the risk of ­losing credibility with their customers.

"You've got to know you're in it for the long term because the last thing you want to do as a retailer is to de-list it. It has an emotional value, so if you do de-list it that will have a negative impact on your business," he says.

While retailers must think carefully about the implications associated with Fairtrade wine, there is no denying that it is an area where there is growth.

The Fairtrade Foundation's wine category has grown from 800,000 bottles sold in 2004 to more than 3 million bottles in 2006 - that's almost a four-fold increase in two years.

Wine importer Ehrmanns is one of the companies responsible for bringing Fairtrade wines to the UK. Around 10 per cent of its business is Fairtrade and that figure will increase with the launch of premium Argentinian range Soluna.

Ehrmanns Fairtrade wine buyer Joy Rushton says the company has spent the past three years educating businesses and consumers about the meaning of Fairtrade which has helped drive the category forward. But she says consumers need more reassurance about the quality of Fairtrade wine.

"There has been a view that they are quite rustic producers and the wines are not that good, but that's not true," says Rushton.

"We want to develop the premium side of Fairtrade wine, so I have been working with the producer of Soluna since last November. I think over the next five years Fairtrade wine is going to be huge."

For independent retailers who have not yet got involved, but would like to be involved in ethical trading and increase volume sales, the evidence for both aspects is there. And, as Jane Snell, business development officer for the Fairtrade Foundation says, the movement started in individual shops, not through the multiples.

"Fairtrade can bring volume sales through and a lot of the big retailers have been very supportive across all sectors, but it has always been a grass-roots movement and those small independent retailers were really key in bringing it to the forefront," she says.

It seems benefits are to be had by all involved in Fairtrade.

As Rushton points out: "This is about trade, not aid. It's not charity, it's a good business model for us all. It's good for the producers, and retailers can make a decent margin out of it, but ultimately we have these case studies that show the positive effect it is having on producers and that's just fantastic."

Customer demand for Origin relaunch

The Thresher Group re launched its Origin range as Fairtrade when it became clear customers were interested in buying ethically-sourced wine.

The Origin range also le nt itself to Fairtrade because it was made up of South African wines. Now the range consists of six wines - four from South Africa and two from Argentina - but there are plans to add more South African wines to the range following head buyer Jonathan Butt's trip there this earlier year. The retailer also stocks two Fairtrade wines from Chile called Equality and is planning to increase its Fairtrade offering to 15 in the next two years.

How Fairtrade wine sales help communities in South America and South Africa

La Riojana - Argentina

More than half of the Famatina Valley's 35,000 residents are employed at La Riojana. The winery not only supplies people with jobs, profits are also ploughed back into the community to pay for certain projects. For example, residents in one of the villages , Tilimuqui, can now afford to have a well and a water pump installed.

Los Robles - Chile

The co-operative was established in 1943 and has been in the forefront of ethical trading since 1990. Staff working there have access to a full canteen, medical centres and education bursaries. The premium goes direct to the local community and pays for a number of schemes, from housing projects and loans for agricultural tools to river-diversion engineering works to enable the poorest farmers to safely reap the benefit of more land.

Du Toitskloof - South Africa

Supplying wine to the Co-op, the Du Toitskloof Cellar is owned by 13 shareholders who are all grape farmers. Grapes come from 22 farms which house 786 people, 350 of whom are children. When the Co-op signed a five-year contract with Du Toitskloof, it came up with a plan to improve adult literacy, schools, recreational activities and clinics, with an extra £1 out of every case going directly to the project (49p from FLO and 51p from the Co-op). Last year the premium paid for a community centre, a craft centre run by women of the

co-operative and a community bus. The retailer has just presented the South African co-operative with a cheque for £90,404 generated by sales.

Tasting notes

Famatina Valley Fairtrade Pinot Grigio 2006 (M&S)

- This crisp white from La Riojana co-operative in Argentina has the delicate scent of orange blossom which is balanced by citrus and apple on the palate.

Origin Fairtrade Cinsault/Merlot 2006 (Thresher)

- A light red from South Africa's Citrusdal Winery. This smooth wine has lots of ripe red fruit on the nose with the taste of plum and a hint of pepper on the palate.




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