Week 7 – Fair trade… Are you sure Nestle?

Being sustainable!

Since we are all quite educated people here, so I am sure that we have heard of this term before. So what exactly is sustainability? Or being sustainable? In terms of environment, perhaps people will think of being green, the use of technologies to improve our environment, to reduce the environment costs, switch off the lights and act together as communities.

 

That’s right, act together as communities. Fair trade is also part of being sustainable too, not for the environment that much (well at least short term wise No, long term there is a link to the environment) but for the workers in the LEDC (Low Economically Developed) countries. Fair trade is trading between the buyers provide better deals and greater share of the purchase price to the suppliers. Now there are hundreds of goods got certified with Fair trade international’s Fair trade certificate, coffee is one of the products that has this certificate and fair trade coffee will be this week’s topic of my blog.

According to some statistics at the beginning of 1990, the global coffee market was worth around $30 billion, which farmers received around $12 billion. In 2000, the world’s coffee market was worth around $55 billion, but the farmers were only receiving about $7 billion. This is partly because of the collapse in world’s commodity prices of coffee but to me, multinational evil empires have been exploiting the suppliers from LEDC countries since.

As consumers nowadays are generally more aware of what is going on around them and people are better educated in the more economically developed countries, the public now are more aware of where they consume goods from / the origins of the products / carbon footprint / sustainability of products. Coffee is one of the goods which you do not consume by yourself solely, as it can be something people offer to others and people do categorize / shape their mental representation of you (perceived image) base on what coffee you consume. Nestle realize the trend in the market and as the world’s leading nutrition, health and wellness organization (according to their website), they claimed that moving into fair trade is a fundamental, serious commitment to improve conditions of suppliers from LEDC countries and help the growth of the fair trade market (try to shape consumers’ mental representation here again).

In reality, it was estimated by American fair trade group Equal Exchange that Partners’ Blend (Nestle’s fair trade product line) has only got less than 1% of all Nestle’s coffee imports. If Nestle was serious about being a fair trade brand then should not it allocate more resources into being “ethical”? To me, Nestle just want to look good and try to shape consumers’ mental representations of it, perceive it as responsible, caring and socially aware brand. As result? Neslte launched Partners’ Blend at the end of 2005, but Nestle was also been voted as the world’s ‘least responsible company ‘.

Mental representation of any brands are created by consumers. Individuals have their own perceptions of brands through accumulation of experiences with the product, every touch point and every thought the customer has about the brand. Clearly Nestle messed up with shaping consumers perception badly back then.

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4 thoughts on “Week 7 – Fair trade… Are you sure Nestle?

  1. Really good blog! 🙂
    One interesting question is do consumers really care about ethical (fair trade/ organic) products, are we willing to pay that extra money for fair-trade coffee or organically produced chocolate?
    As a society we are becoming more aware of where our products come from, how they are produced and what goes into them. A survey (Hines and Ames, 2000) revealed that 51% of the population brought an ethical product as they felt they could make a difference, furthermore 68% claimed they brought an ethical product because of the companies responsible representation of a ‘better more fair world’ Just like the Nestle coffee brand.. Research has shown, that when considering to buy a product ‘ethical considerations’ rank extremely high on our list, however Pelsmacker, Driesen and Rayp (2005) have shown there to be inconsistencies between buying behaviour and consumers positive attitudes towards ethical products.They found that despite consumers desires to want to help the environment, only 35% of consumers were actually willing to pay a premium price for fare-trade coffee.
    I think as consumers we do care about fair trade products, but due to the expensiveness of them they become inaccessible to some consumers. Not the mention some of the false claims companies make, such as nike a child labor, may put consumers off.

  2. My jaw dropped to the floor when I read the statistics about the amount farmers were getting in 2000! That’s terrible, and it is disheartening to know that companies can get away with labelling something as fairtrade when the reality is that it more than likely isn’t. I thought the regulations were much more stringent. After poking around a few journals, I discovered that his kind of information is known as a ‘credence attribute’ because consumers cannot verify the information by taste or appearance (Byrne, 2009); they must simply believe it to be true. I think companies like Nestle realise this and are taking advantage; jumping on the bandwagon as it were. McMurtry (2008) argues that for fairtrade products to live up to their ethical trade label, they must develop immunity from ‘ethical raiding’ from multinational companies because they tend to create a halo effect which undermines the label’s credibility, which is essentially what you have described above. It’s a difficult situation though, because most purchases are made through multinationals and if you were to take them out of the equation, who is to say that the results would be any better?

  3. Personally, although i think we as a society are more interested in ethical products these days there is a long way to go before it actually effects our behaviour. Look at Alexa Chungs’ channel 4 programme ‘the devil wears Primark’, this showed how Primark clothes are made via slave labour in third world countries. Now go into any Primark store an it’s like it never happened, they are always busy. I saw no difference in the amount of people in-store both before and after the documentary aired, and yes I was in there too and still continue to shop there. I, like many others, disagree with what they do but it hasn’t changed the fact i shop there. As is stated in the previous comment people may agree with the concept of ethics but they are not willing to pay the price, we can’t all afford to buy everything from M&S just to make us feel good about ourselves.Shaw et al. (2006) found ethical intentions to avoid purchasing sweatshop-produced clothing and actual purchase behaviour where inconsistent as i think the Primark case demonstrates well.

  4. “To me, Nestle just want to look good and try to shape consumers’ mental representations of it, perceive it as responsible, caring and socially aware brand. As result? Mental representation of any brands is created by consumers. Individuals have their own perceptions of brands through accumulation of experiences with the product”,

    I totally agree with this comment, perception is accumulated through experience and firms and marketers take advantage of this effect or ‘confirmation bias’ through a range of advertising contexts that emphasis fear of trial or stick to what you know, the effect being salient for strong brands (Kardes, F. R., Cline, T. W., & Cronley, M. L, 2011; Hoch, S. J., & Deighton, J. 1989)

    Chattopadhyay, A. and Basu, K. (1990) found that cognitive evaluations should be more receptive and less critical with prior positive evaluations

    Chattopadhyay, A. and Basu, K. (1990)‘Humor in advertising: The moderating role of prior brand evaluation’, Journal of Marketing Research, Vol.27, November, pp. 466–476

    Hoch, S. J., & Deighton, J. (1989). Managing what consumers learn from experience. The Journal of Marketing, 1-20.

    Kardes, F. R., Cline, T. W., & Cronley, M. L. (2011). In Consumer behaviour: Science and practice. Mason, Ohio: South-Western Cengage Learning

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