Is America ready for eco-fashion?
Fair-trade clothing is a hit in Europe. But some wonder if American will buy into this trend.
Now, People Tree faces perhaps its biggest challenge. In the midst of the largest global recession in postwar history, will cash-strapped consumers keep snapping up the company's premium-priced fair-trade apparel?Skip to next paragraph
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It's a question the entire fair-trade industry is asking. The whole premise of fair-trade goods hangs on the idea that first-world consumers will pay a little extra to give third-world artisans and farmers a living wage. A deep recession could stop fair-trade companies in their tracks.
So far, that hasn't happened here in Britain. By this summer, Cadbury expects all its Dairy Milk bars in Britain and Ireland to be made from fair-trade cocoa. By year end, Starbucks plans to serve only fair-trade coffee in the United Kingdom. In 2008, sales of fair-trade certified cotton doubled from 2007 levels to 20 million units.
"Fair trade can compete if it comes in at a slightly higher price, or even a significantly higher price," says Vanessa Paar, business development manager at Fairtrade Foundation, which grants fair-trade status to products sold in Britain and is one of 20 national certifying groups operating under the umbrella of the Fairtrade Labeling Organizations International. "It depends on the aesthetic of the garments, economies of scale, and the business strategy."
Minney's strategy is to weave environmental as well as fair-trade standards into her high-fashion clothes. She charges a premium to cover the extra costs of sourcing 50 percent of her line with organic cotton and working exclusively with hand weavers, who don't contribute the carbon emissions that power looms do in conventional garment factories.
Other retailers, concentrating solely on fair-trade payments to farmers, don't charge extra.
"If we convert a garment to fair trade, say, a white T-shirt, and previously that style cost £7 ($10.31), the fair-trade version will cost £7," says Lucy Kelly, a spokeswoman for the Marks & Spencer supermarket chain.
As Britain's leading garment retailer by volume, Marks & Spencer has sold 4.8 million fair-trade garments since launching the program in 2007. With sales up by 105 percent in the first six months of 2008, the retailer believes it's on track to move an additional 15 million items by 2012.
A company like Marks & Spencer can stay competitive because the cost of the cotton fiber in the finished garment is very small – typically less than 5 percent of the entire cost, according to Damien Sanfilippo, a cotton project manager at Pesticide Action Network, an international coalition advocating ecologically sound farm practices.
Although British Fairtrade certification sets a standard for how cotton farmers are paid, it doesn't distinguish whether their goods are grown organically or what labor practices were used in their processing or manufacture. But overlapping consumer concerns may bring them together.
"Fair trade can provide a stepping stone for farmers to convert to organic because it's easier to become fair-trade certified," says Mr. Sanfilippo, "Once they have access to a premium market [through higher fair-trade prices], they can decide to use the premium to finance the training that they need to move towards more sustainable practices – all the way up to organic."
Fair trade and organic are highly dependent upon income and price, so retailers may see decreased demand, notes Saqib Jafarey, an international trade economist with the City University of London. But if they keep prices in line it's possible some companies could expand their fair-trade offerings – even in a recession.