Fair Trade in Scotland: review

Chapter 4 Opportunities and Barriers to Growth: Fair Trade Sales and Awareness in Scotland

4.1 Introduction

Over the course of the review, the opportunities for, and barriers to growth of Fair Trade sales, public awareness and the adoption of Fair Trade in Scotland were assessed.

This research highlighted key themes for opportunities and barriers for Fair Trade in Scotland, which can be summarised as follows:

• Consumer 'Fair Trade' literacy and Fair Trade's added value
• Supply and distribution of FT products to market, specifically handicrafts
• Messaging/presentation of Fair Trade
• Access to public procurement contracts
• Brexit and implications for international trade and procurement policies and practice
• Enterprise support for Scottish FTOs
• Building volunteer capacity: Fair Trade Networks in Scotland.

In each of these themes, both opportunities and barriers to growth in sales and Fair Trade awareness were identified. Figure 4.1 on the following page outlines a SWOT analysis facilitated with the SFTF team and research team members, which outline some of the key areas identified.

Figure 4.1: SWOT analysis of the current position of Fair Trade sales and its promotion in Scotland (facilitated session with SFTF staff July 2019)

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Infographic text:

Strengths

Recent progress in influencing public procurement
Strong social enterprise and co-operative movement in Scotland
Successful reassessment FT Nation status 2017
SG Long term support for SFTF as promotional/educational resource
Grassroots approach: Strong FT campaigner/consumer network
Cross-parliamentary support Strong consumer awareness of FT mark Diverse supplier/commodity portfolio
Well established Scottish FT business with unique commodity: rice, footballs

Opportunities

Embed Fair trade principles into public procurement practice across Scotland
Cross-departmental/sector opportunities for developing FT markets
SDG Goals focus on Global Citizenship
Project specific opportunities for Forum collaboration with national support agencies
Stronger network infrastructure (than England) leading to strong voice over shaping of UK wide FT Towns scheme
Impact on secondary schools greatest when linked to enterprise initiatives (trade not aid)
FT school uniforms (Kool School

Weaknesses

Dominance of large retailers and price war
Sustaining and building awareness is heavily reliant on longstanding volunteers
FT Schools plateau: primary school knowledge not sustained consistently at secondary school
FT businesses/groups lack of capacity due to scale: digital/marketing/growth strategy deficit
Diversity of suppliers/retailers means to cohesive infrastructure
Reduction in DFID funding to FT Foundation: SFTF replacing previous provision
FT Mark historically not audited as thoroughly on eco credentials

Threats

Brexit's impact on importers
Consumer confusion on 'What is fair trade?' & 'outdated' image
'Labelling fatigue' - many not independently certified
Lowering of Standards/ principles
Climate crisis focus detracting from addressing inequality/community empowerment
Products and principles competing with 'domestic' social causes
Impact of Traidcraft move to new business model on handicrafts/FTraders

4.2 Fair Trade Campaigner Roles and Perceptions

The Fair Trade campaigner survey was completed by 93 respondents, representing 14% of those organisations and individuals held on SFTF's mailing distribution list, to which the survey was circulated. Over 60% of those who responded described themselves as members of a Fair Trade town, village or area grouping and over 92% of those responding were campaigning in a voluntary capacity Table 4.1). 60% of these identified themselves as members of the SFTF (in group or individual capacity), which currently has 82 organisational members (52 respondents reported that they were members).

Table 4.1 Respondents by type expressed as a % of total number of 93 respondents
(some of the 93 respondents identified themselves as being in more than one category).

Respondent type	%	Numberof respondents
An individual campaigner	45%	42
Member of FT town/village/area grouping	61%	57
Member of schools FT group	9%	8
Member of FT university or college group	5%	5
Member of a faith based group	38%	35
Involved in Development Education Centres	5%	5
A Co-operative/Scotmid group member	17%	16
A business with an interest in fair trade	12%	11

Campaigners identified their engagement as being, in the main, a positive role in raising awareness of Fair Trade in their area (Chart 4.1), rather than having a direct impact on influencing changes to the way trade works or having a 'pressure group' influence on local retailers to stock Fair Trade. The most cited voluntary activity was organising promotional events during Fairtrade Fortnight (90% of respondents), whilst over 60% of campaigners were also engaged in raising awareness in primary and secondary school (only 3 of those 49 responses were the FT Schools group themselves).

Chart 4.1: FT campaigner roles (81 responses)

Selling FT products through voluntary stalls at faith groups (60%) and community events (47%) was carried out by 44 of those responding, with the majority (75%) stating that Gateshead 'fair trade pioneer' Traidcraft plc was their main source for stock; this was followed by those supplied by independent Fair Trade shops such as the One World Shop in Edinburgh. As Table 4.2 demonstrates, there was a wide variation in the sales volumes achieved by voluntary stallholders, some of whom offered products at events weekly and others only annually.

Table 4.2 Volunteer stallholders' sales

Total Volunteer Sales per annum (44 responses)	£99, 300
Lowest amount in sales per annum	300
Highest amount in sales per annum	21,000
Median Average per stallholder	2,000

Traidcraft's decision - following a re-modelling of its business in 2017-18 -to significantly reduce its range of products and focus on major food product groups will have a significant impact on supply and visibility of Fair Trade products to Scottish consumers. Most importantly, this raises significant livelihood challenges for the producers previously supplying Traidcraft. A few respondents purchased supplies direct from the importer of the goods (such as Shared Earth).

4.2.1 Sustainable Development and Fair Trade

Campaigners answered several questions relating to Fair Trade and its priorities reflected in SDGs. The Social Premium offered by Fairtrade, (the additional funding that Fair Trade producers and their employees direct towards environmental and social improvements in their communities), was regarded by nearly 80% of respondents as central to the Fair Trade message. This was in providing 'added' benefit as well as empowering communities to make their own decisions in pursuit of sustainable livelihoods. One response highlighted how the Social Premium itself could contribute towards the delivery of SDGs.

Campaigners and SFTF members were largely aware (94%) of the SDGs and the SG's commitment to implementing them but the majority were not aware of what they represented in any detail. The SDGs that campaigners felt the Fair Trade movement in Scotland should be most closely aligning itself to was seen to be SDG Goal 1, No Poverty (31% citing), followed by Responsible Consumption and Production (25%) and Decent Work and Economic Growth (24%). However, most respondents found this difficult to answer, with most SDGs viewed as delivered by Fair Trade practice.

'These issues are so inter-linked; it is difficult to prioritise. If inequalities were reduced and trade practice fairer, then poverty and hunger would be reduced, and gender equality supported. The Climate change issue is huge and requires urgent action, but fairer trade practices would support the change too.'

Online survey respondent

Martin Rhodes, Chief Executive of SFTF, regards Responsible Consumption and Production as critical to Fair Trade, and the Fair Trade movement's USP due to its links to consumer behaviours, supply chains and ultimately international trading practice.

4.2.2 Fair Trade Literacy in a Crowded Marketplace

An interesting finding of the research was that despite competing ethical brands being very much a current concern in Fair Trade networks and media, 33% of campaigners surveyed regarded 'green' certifications such as Rainforest Alliance as representing Fair Trade practice (Table 4.3). This is possibly due to the high profile 'presentation' of competing certifications as 'as good as' Fair Trade and the emphasis on 'certification schemes' in the question. This contrasted with participants of workshops held in the course of research (representing SFTF's most engaged members and partners); these understood very clearly which of the certifications represented Fair Trade. There was a high level of awareness of WFTO guarantee membership scheme and non-certified but fairly traded direct imports from social enterprises such as Just Trading Scotland Ltd and Hadeel (selling Palestinian produce).

Table 4.3: Campaigners' views on certification schemes representing Fair Trade practice.
(Percentage of campaigners surveyed who viewed each certification as representing Fair Trade).

Campaigners' views on certifications regarded as representing Fair Trade practice	Responses
FT Mark (registered certification from the Fairtrade Labelling Organisation)	98%	86
Other (please specify)	6%	5
Cocoa Life (Mondolez)	14%	12
Fairly traded in-store own brands	27%	24
Rainforest Alliance/UTZ	33%	29
WFTO (World Fair Trade Organisation) Guarantee Scheme	68%	60
Non-certified but fairly traded direct imports (e.g. Just Trading Scotland rice)	68%	60

Other 'marks' and certifications cited were BAFTS (British Association of Fair Trade Shops), Fair for Life, Good Weave (formerly known as Rugmark) and Geopark Alliances (oil and gas with strong ESG). One of our importer and manufacturer respondents of the supplier survey cited Fair Mined as the certification scheme used for silver. The responses to this question indicate the need for an ongoing education and 'fair trade literacy' campaign even for longstanding supporters of the principles of Fair Trade, as the market becomes more crowded with ethical certification schemes.

'The key is informed buyers (or consumers) of goods. They need to know the story behind the label'

Workshop participant, Perth, October 2019

4.2.3 Volunteering for the Fair Trade Movement in Scotland

Campaigners in both workshops and through the online questionnaire articulated several barriers to them in advancing the cause of Fair Trade in their community, sector or institution. The most significant challenge to their efforts came from the challenges in recruiting volunteers, upon which the entire growth of the Fair Trade movement in Scotland has depended.

'Most of the awareness of FT in Scotland has come from bottom up - local groups with plans to get FT centre stage. This local activity could be complemented by a more coherent position on FT within the Scottish Government. The crafting of the Good Food Nation Bill,^[67] during 2020, creates a real opportunity for Government to do this'.

Dennis Overton, Consultant, Chair of Scotland Food and Drink and of Rwandan organic Agri-business 'Ikireza'

Several volunteers reported having run and participated in local groups for over 30 years and wanting to 'hand over' leadership responsibility to younger people. The difficulties in recruiting any new volunteers to run campaigns and committees was a consistent message in all our consultations (Chart 4.5). The reasons for this were often perceived to relate to Fair Trade's image as a concept as either 'done and dusted' at local level (because award certification has been achieved) or as 'tired and dated' particularly from younger people's perspective. Competing with more current key issues such as Climate Change is seen a key challenge, the radical messaging for which has been led by and engaged with by young people at mass movement level.

Chart 4.2: Campaigners reported challenges in promoting Fair Trade in their area (81 responses)

Key to Fair Trade's future profile will be its ability to communicate how Fair Trade is part of the solution to the Climate crisis, rather than competing with it. There has already been a significant drive to demonstrate synergy by both WFTO and Fairtrade Foundation in this respect and the need to sustain efforts to support national Scottish and local networks to embed this into their messaging.

There were specific difficulties in recruiting volunteers to the time-consuming task of auditing all businesses in the area to ask if they used Fair Trade, in order to be re-assessed for Fair Trade Town status. Several town/area steering groups indicated through our consultations that they had failed to complete the audit required due to lack of volunteer capacity. Whilst not the scope of this review, there may have to be a more fundamental re-think of the way in which these award schemes operate in order to measure prevalence and impact of Fair Trade Actions at local level.

There are, however, opportunities to explore new models of volunteering within the existing work of the SFTF and potentially build a more robust training and support system for volunteering for Fair Trade under the banner of Active Global Citizenship. Volunteer Scotland, core-funded through the SG Third Sector Team, offers an accredited training scheme, Investing in Volunteers. This is the established UK standard for Volunteering with a quality framework towards which organisations work to gain full accreditation. An initial investment in the development of a standard for Fair Trade and Active Global Citizenship could reap dividends for the continuance and 're-boot' of local campaign networks that have brought Fair Trade to where it is today. As an independent organisation, the SFTF may be able to explore external funding opportunities for this work.

The Saltire Awards are a national initiative also supported by the SG, which acknowledge, celebrate and reward the commitment and contribution of young volunteers specifically. Their model of development at four Award Levels provides a useful approach for defining the various kinds of volunteer roles that may be attractive to young people and that could be incorporated within SFTF's existing awards schemes.

• Saltire Challenge: volunteer in a one-off team event to get a taste of volunteering by joining in with a 'no strings' team event
• Saltire Approach: regular volunteering in manageable chunks and helping you find out what you like to do best
• Saltire Ascent: making a longer commitment to volunteering
• Saltire Summit: for outstanding contributions to volunteering

Chart 4.3: Support needed by grassroots FT campaigners.
(Percentage of 76 respondents who selected each response; respondents could select more than one response).

Campaigners were invited to comment on other mechanisms of support that SFTF might offer them, over and above the services and support already provided. Over 50% stated that they needed more help in recruiting volunteer campaigners locally whilst 42% thought that support could be offered in connecting their group with other likeminded organisations in their area to create a collaborative hub (Chart 4.2).

Of the 64 campaigners who answered this question in detail, the majority already had some links to either another similar type of group (e.g. FT Town steering group within a local authority area). In cities or large conurbations there was a plethora of links between universities, local authority, town groups and Development Education Centres (Dundee was cited on several occasions).

The Co-operative Group's Member Pioneers^[68] were seen as a very important source of support for several respondents (where there was a store in their town or area), further strengthened by the recent opening of small Co-operative stores in student campuses. A few local authorities were seen as pro-active in their support of Fair Trade campaigners and the groups to which they belong; for example, Perth and Kinross Council even facilitated a regular meeting of FT Towns groups. The SFTF is already delivering further regional networking events in order to connect volunteers together in their area. There may be further opportunities to engage with Development Education Centres where they are not currently connected to a local city/ town/school Fair Trade group, in order to support resourcing more effectively.

Many other 'traditional' voluntary membership (such as faith groups, women's groups and Rotary) organisations have experienced similar recruitment challenges, with wider volunteer trends suggesting young people dislike the commitment of traditional committee 'membership' roles in contrast to the rapid growth of newer activist based movements such as those focused on the environment. There may be further opportunities for SFTF to explore engaging volunteers in new, non-committee-centred ways to attract younger (and older) people to specific time-limited volunteering opportunities, based on contemporary themes. A major start has been made with the formation of the Scottish Fair Trade Young People's Network. Effective links and liaison with the Scottish Government's Third Sector Team could support this work.

Whilst not ranked as the most significant challenge, a total of 66 (of 81) campaigners thought that they lacked the social media skills needed to lead promotional activity of Fair Trade at local level, this largely being due to the older age profile of voluntary campaigners (Chart 4.2). Twenty-eight percent of respondents stated that they would welcome further support for social media training and 32% would like support for running social media campaigns on their area/group's behalf. This may be a useful area for SFTF explore in future in terms of young people's involvement in volunteering roles.

Table 4.4: Campaigner methods to promote FT products in their area
(Percentage of 78 respondents who selected each response; respondents could select more than one response).

Methods used to promote fair trade products by volunteer campaigners
Answer Choices	% Responses
Scottish news press/lifestyle magazines (online/printed)	21%
Social media	58%
Local radio	5%
Own leafleting/poster campaigns	47%
We don't specifically promote fair trade goods	3%
Stalls at community/faith group events	77%
Word of mouth - friends, family and colleagues at work	73%

Significantly 'word of mouth' is the most often used method of promoting Fair Trade (Table 4.4), whilst social media is recognised as a major opportunity for promotional work, despite further training needs. Several respondents cited more proactive externally-focused methods of promotion, such as visiting local businesses with FT product samples and aligning Fair Trade to 'Buy Fair and Local' campaigns. Over 80% of respondents focused their promotional efforts on the local consumer, with some also citing visitors to the area, teachers, young people and public agencies.

A wide range of views on the most effective forms of marketing and promotion of Fair Trade products was given through survey responses; use of the FT mark and FT Fortnight publicity material and messaging was cited several times as was the importance of the mark being given prominent promotion by local supermarket retailers. School, college and university groups felt that internal promotion on staff intranet was crucial. Some groups had instigated more targeted efforts to specific events or organisations:

'Our group targeted the Open Championship; getting them to adopt Fairtrade was probably our biggest coup'.

Campaign survey respondent.

Whilst 72% of respondents thought that Scottish consumers had some level of awareness of Fair Trade, there was clear acknowledgement that in order to achieve step change in Fair Trade consumer awareness, a focus on public procurers and education in schools was required to improve Fair Trade literacy (Chart 4.4).

Chart 4.4: Campaigner views on actions needed to improve awareness and adoption of Fair Trade in Scotland
(80 respondents answered this question)

Respondents were also asked which, of a range of product categories, they thought most required further promotion and reported that they regarded Fair Trade food (42%) and fashion (32%) as the two major groups most in need of marketing at national level. There was little support for promotion of handicrafts or other non-food items (3% and 5% respectively). Campaigners were also very clear as to the relative importance of the current consumer trends in favour of environmentally sustainable and organic products as a key opportunity for Fair Trade (Chart 4.5), with 73% regarding this trend as a major opportunity for Fair Trade to present its credentials.

Respondent campaigners were also asked what they regarded as the main barriers to adoption of Fair Trade by consumers. 72% regarded the main barrier as the lower price of non-fairly traded goods, with consumer preference for quality products of local provenance cited throughout the review by both campaigners, influencers and retailers/ suppliers.

'I think the majority of people don't care if it's fair trade; they care if it's unique and of high quality. There is also an issue with supporting the local makers or spending money more on local poverty instead of those living abroad, regardless of how vast the difference in the poverty levels here and abroad are. Perceptions of cost are also an issue; people expect fair trade to cost much more, but that's not the case. People are so distracted by and used to cheap prices at the big stores that ethics often don't come into their purchasing practices. If it's not convenient or cheap, they don't want to think about it, and it's easier not to think about suppliers in developing nations because they're out of sight and 'the other.'

Local business owner (with an interest in fair trade) response to campaigner survey

Chart 4.5: Perceived opportunities for increasing FT sales: campaigner views.
(Number of respondents rating each category as shown).

4.3 Barriers and Opportunities for Growth: Suppliers andRetailers

The review's survey and interviews with retailers, suppliers, importers of Fair Trade and international leaders provide a clear picture of the range of challenges and opportunities for Fair Trade both as a sales Market and as an alternative model for trade.

4.3.1 Challenges: Price and Margin

Retailers and suppliers with a commitment to the support of Fair Trade - whether large multiple retailers such as the Co-operative group, Waitrose or Scotmid or small independent FTOs - referenced the dual threats of the drive for lower cost products in terms of retailer competition and consumer demands and labelling fatigue and consumer confusion. The latter was cited as an increasing threat as more 'ethical' labels appear on shelves and major Supermarket retailers and suppliers (Cadbury's -Mondolez) withdraw from the Fairtrade Mark licensing scheme in favour of cheaper, 'fairly traded' in-house products such as Cadbury's 'Cocoa Life'.

The Co-operative Group's Sustainability and Sourcing Manager, Sarah Wakefield explained the retailers' decision to focus on seven core commodities for its Fairtrade Mark certified offer, moving away from a policy of 'if it can be Fairtrade it should be Fairtrade'.

'There was a challenge for smaller commodities such as fair trade rice and olive oil supplied by producer groups and independent FTOs which weren't selling due to price point. We need to offer Fairtrade ranges which are competitive on price and can sell at volume. We made the decision to drive our volumes in seven core areas to maximise benefits to Fairtrade producers - for example, our 100% commitment on cocoa as an ingredient in all our products, extending our range of Fairtrade flowers and being the biggest seller of Fairtrade wine in the world'.

Sarah Wakefield, Co-operative Group, 1:1 interview.

Amy Morris, Waitrose's Sustainability Co-ordinator, also commented on price point: 'we know that there is a maximum price people are prepared to pay for what's seen as everyday essentials - such as bananas - there is always price pressure'.

An independent Scottish Fair Trade retailer commented on the trend for ethical labels in the marketplace and the need for careful market positioning:

'I'm an independent business, and there is a push from larger corporations to focus on fair trade or ethically-made products (or to offer products that purport to be so), so I need to be competitive with them. This means I need to have a wide range of products so that if one is being undersold, or if a supplier is now working with say, ASOS, as one has been, then I don't necessarily want to have that product. We need to be unique.'

Online survey respondent

4.3.2 Perceived Constraints on Growth: Supply Chain

From the options given in the survey a key barrier that was identified was access to supply in relation to the lack of effective distribution networks in Scotland (Chart 4.6). This was the highest-rated factor in terms of importance, aligned with difficulties in sourcing suppliers. This stems partly from the impact of Traidcraft's new business model in reducing its product range and Fair Trade brands distributed (see section 4.1), but more generally indicates a reduction in the number of independent wholesalers distributing in Scotland (and the wider UK, according to BAFTS' data). The views of individual volunteers and retail managers indicated clear opportunities to achieve resource efficiencies and more direct relationships with suppliers through the creation of one national or several distribution hubs through which retailers could purchase. A particular case was made for the handcraft and homewares producers, often small women-owned co-operative enterprises, where the loss of markets would have a major impact on livelihoods.

Chart 4.6 Relative importance of factors constraining growth of Fair Trade sales.
(Percentage of respondents giving each rating is shown).

Other constraints were identified. Thirty-one percent of Scottish retailers and suppliers responding to the survey highlighted difficulties in sourcing suppliers. Where the product was dependent on a single crop or commodity, crop failure was another key constraint to sales growth. Once again, this highlighted the need for diversification of product ranges. Other immediate challenges to the supply chain identified by respondents include:

• lack of working capital for advance purchase of products;
• a no-deal Brexit and its impact on exchange rate;
• tariffs and import duties as well as access to EU Markets.

Supply chain issues impacting on producers in developing countries (with a knock-on effect for retailers and suppliers) were cited as climate change and security of transport, in countries with high risk ratings (such as within West Africa).

Case Study 3: Coach House Trust / Gavin's Mill & Just Trading Scotland

Background: Coach House and Gavin's Mill www.gavinsmill.org

The Balmore Trust was set up in 1979 through a local church following discussions about world poverty. A project began at the Coach House, Balmore north of Glasgow, which sold Fair Trade products, with Oxfam Trading and Traidcraft as suppliers. The purpose was to raise money and support development work with volunteers who linked groups from Africa and Asia to Scotland. The retail outlet received the Trust's profits and in 37 years have raised £600,000.

In the 1980s, a development worker from Bangladesh visited who was working with women's groups from the poorest in society. Asked about getting a grant she said, 'No. I don't want your money. I want you to sell the goods these women make. That is what gives them their dignity.' The Coach House goal then became selling at least 50% fairly traded goods in the shop together with local food and crafts. In 2016 the Coach House moved to Milngavie and in March 2017 a new shop and cafe opened at Gavin's Mill - its turnover in year ending February 2019 was £140,364 and it is owned and run by a new charity: Gavin's Mill Community Project. The main challenge is to raise the capital required to purchase the building and to continue informing people about Fair Trade and its links with sustainability and the climate crisis.

Just Trading Scotland - JTS www.jts.co.uk.

In 2008, the Trust was invited to move into a warehouse occupied by the Fairtrade shop in Paisley, Rainbow Turtle and in 2009, set up a new business, JTS (Just Trading Scotland), to focus solely on fair trade importing. JTS now imports from smallholder farmers and small food producers in Kenya, Malawi (Kilombero Rice), Swaziland, South Africa, India and Sri Lanka. In the year ending January 2019 JTS had a turnover of £228,898.

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Infographic text:

Trading

Our first container of rice arrived in time for Fairtrade Fortnight 2009.
JTS are now pleased to import an exciting range of products from all over the world.

Kilombero

We took on the challenge of trying to establish a market for Kilombero Rice.
We now sell our premium branded rice in outlets up and down the country. Our work has managed to positively affect the lives of over 6000 farmers.

Eswatini

We import a range of exotic jams, chutneys, pickles and sauces from Swaziland.
In 2011, our guidance and input helped to steward Eswatini through tough financial times and now their rebranded products sit proudly on shelves all around the UK.

Coconut Milk

In 2012 we started to import coconut milk from Sri Lanka.
JTS are now proud to stock the only organic and Fairtrade Certified coconut milk in the UK.

Awards

Multiple Great Taste Awards achieved.
SMP Business Innovation Award.
Named as a cutting edge SME by DFID.
Scottish Fair Trade Forum awards for two staff members
Named one of the best examples of fair trade practice by BAFTS.

Impact

The 90kg Rice Challenge has been taken by over 400 schools and 250 faith groups thereby providing education to hundreds of Malawian children.
Lives empowered and improved through establishing markets and through investment in training, certified seed and farm equipment.

Barriers to growth

The biggest challenges are Price and Public procurement practice. Price is a serious barrier as Kilombero rice sells at £3.750 / £3.75 a kilo whereas it can be bought for 80 pence a kilo. With regard to public procurement practice it will be necessary to convince more local authorities to buy FT rice through procurement using criteria available in community benefit clauses and the sustainable procurement duty.

Interview with CEO John Riches, Founder, 29 November 2019

4.3.3 Accessing Public Procurement Contracts

'Awareness of the Fairtrade Mark is good at consumer level. The challenge is at corporate level'.

Matthew Anderson, Senior Lecturer in Business Ethics and the Circular economy, Portsmouth University Business School.

A key constraint cited by the FT micro-businesses participating in the review was the difficulties encountered in accessing public procurement Markets. Despite the progress made through recent Scottish sustainable public procurement legislation, many public authorities are reported as going no further than specifying that their procurement will be 'sustainable' but not specifying what they regard as constituting 'sustainable' (more often perceived as a proxy for 'green') or defining what is meant by the term 'ethical or fairly traded products'. The National Procurement Strategy of one executive agency (NHS National Services Scotland)^[69] does not reference Fair Trade at all, referring only to use of the SG's Public Procurement Tools.

Smaller FT business find that they cannot not compete for larger scale 'bundled' group contracts specified by public procurement portals such as APUC, TUCO (colleges and universities) and Scotland Excel (local authorities) and due to scale and FT minimum pricing were also unable to compete on price which was perceived to go to the lowest bidder.

'We are a Fair Trade nation with no support from Government for suppliers of fair trade goods to implement / encourage the public organisations to buy fair trade.'

Survey respondent

As the most significant Market for developing FTOs, procurement by public agencies of Fair Trade products must become a priority for the Scottish Government to ensure that its sustainable procurement principles are enacted in practice. One respondent to our survey commented that 'Effort and support (is needed) to connect suppliers and buyers - consumers and trade would grow this Market'.

This is probably the most effective mechanism for increasing sales growth at scale in Scotland, together with working with food service providers on their knowledge and range of Fair Trade products offered to the public and corporate sector markets.

More success was encountered with individual schools or leisure centres for Fair Trade products, but this approach is resource-intensive and not scalable.

'Of England, Wales and Scotland, we find the Scottish Market most receptive to our Fairtrade school and corporate uniform offer. For example, it is a relative pleasure to 'cold call' in Scotland compared to other parts of the UK, as there is almost invariably a degree of knowledge/enlightenment at the other end of the phone. So, it is no surprise that Scotland and Scottish Schools have been our fastest growing Market for several years now'.

Kool Skools: respondent to online survey, supplying Fairtrade school uniforms

Case Study 4: Fair Trade School Uniforms and Procurement

Started in 2011, Koolskools is the #1 supplier in the UK of ethical school uniform made with FT cotton. The range includes polo shirts, hoodies, sweatshirts and cardigans that can be embroidered with school logos. Registered as a limited company under the name Koolkompany Limited it currently has a turnover of around £130,000 per annum and four employees. Originally Koolskools worked solely with ethical factories licensed to handle FT garment manufacture in Mauritius but, due to manufacturing challenges in Mauritius, have moved most of the production to Indian factories over the past few years.

The Pratima Organic Grower Group in Odisha, India, operates a ginning unit and works with 4,000 farmers from over 100 villages on the production of fair trade organic cotton. They are increasing their focus on the private sector and have been successful in signing up North Link Ferries as a client for work wear.

Koolskools have recently been awarded a contract with National Union of Students (NUS), whose clothing business is worth around £2 million per year. This came about, in part, as a result of a change in the tender structure provided by NUS; in changing their supplier tender split to offer one tender specifically for FT clothing and a second for non-FT, a minimum percentage of purchasing was guaranteed to be Fairtrade Mark registered. This is a strategy that could be adopted across other organisations, and is allowable within current procurement regulation, to enable more FT suppliers to tender for contracts or part of sub-tender contracts.

Koolskools operates UK wide with currently around 40% of business in Scotland and a higher percentage in primary schools. Their greatest growth market is predicted for Scotland. Andy was very positive on their experiences of approaching schools in Scotland as they are receptive to the idea of FT uniforms and generally have a better degree of knowledge of FT than the rest of the UK. Koolskools' Founding Partner, Andy Ashcroft, notes that their trading relationships are directly with schools due, he believes, to SFTF's willingness to provide educational resources and workshops in this setting, which plays a key part in signing up new clients.

Challenges: Koolskools have had very little success in working with Local Authorities (LAs) throughout the UK despite having spent a great deal of time on marketing to them in the past and they no longer devote any resource to public procurement contracts. As with the NUS, Andy has suggested that LAs could hive off the FT element of contracts to enable FT organisations to compete. Koolskools have tried unsuccessfully to approach the NHS as well as numerous councils in Scotland, England and Wales. Regarding procurement in both private and public organisations, generally Andy is of the view that there are 'long-standing entrenched relationships that need to be broken' between procurement officers and suppliers and that things 'won't change unless they are ordered from above.

Andy Ashcroft, CEO Koolskools, interviewed by Review team on 15^th November 2019

4.3.4 External Support Requirements of FTOs

Chart 4.7 Demand for additional external support for businesses offering Fair Trade.
(Percentage of respondents who selected each response; respondents could select more than one answer).

Chart 4.7 shows that the most requested support at national level to address some of these barriers was seen as business development (17 respondents rating this as their priority for support), including expert retail advice, and design advice on textile development. Those citing IT and web- based/online concerns mentioned the costs of developing strong, constantly updated and secure websites. Additional ('other') comments related to Governmental actions at Scottish and UK (reserved trade policy) level were:

a. Long-term loans for micro and small importers to develop the business during the uncertainty/transition caused by Brexit;

b. Simplification of import process and duty payable by small turnover businesses;

c. Building public awareness of benefits of buying Fair Trade;

d. The threat of import tariffs for many FTOs in the UK who process their product in Europe and

e. Government sponsored awareness campaign spelling out the importance of Fair Trade locally and globally.

In terms of supply to the Scottish market to increase sales, the most important means of supporting improvements was seen as direct support for importers of Fair Trade goods to Scotland, with 82% of respondents indicating that this would make the biggest impact on their ability to grow Fair Trade sales. A further 42% of those same respondents thought that business finance (such as short term credit loans) would support sales in terms of supply. Currently, few Scottish FTOs have access to this sort of business finance, with only one known to have buyer finance (Shop, Term or Buyer Credit) in place with Shared Interest Society. The membership based co-operative and community benefit Society is a member of the UK FT Leaders' Forum and the only social lender in the UK focused solely on supporting the international FT market. The majority of its lending, however, is to customer producers in the developing world (such as Export Credit and Stock facilities).

More generally, respondents commented on the need for most SG level statements of commitment to Fair Trade, as a Fair Trade nation. One respondent to the survey commented:

'We have numerous events promoting Fair Trade each year, and I led the campaign to make our town a Fairtrade Town last year, which got a lot of press and local support on social media, but this did not result in increased sales or engagement locally, in reality. …. It would be really useful if the government had more to say about Fair Trade in Scotland, as …. It can often feel like we're promoting the movement alone'.

Independent Fair trade retail outlet

4.3.5 Opportunities: The Inclusive Economy and Social Enterprise

Whilst independent FTOs do not command a major Market share of Fair Trade (usually FT Mark certified) sales in Scotland, they do represent a vital part of the Fair Trade alternative trading model for fair and ethical trade, driven by social-mission led enterprises. FTOs are often directly working with producers of Fair Trade goods in developing countries, reflecting the principles of global citizenship, shortening supply chains and providing a direct relationship between the consumer and the farmers/ workers who produce what we consume.

'If you stand back and look at the Scottish Economic Strategy, they all fit within the pillar of inclusive growth with a better-balanced economy and in case of FTO's have overseas beneficiaries so they're contributing to the International Development Goals as well.'

Gerry Higgins, Social Enterprise World Forum and International Social Enterprise Observatory

There are real opportunities to grow this unique niche within the social enterprise sector, with adequate support and change to current procurement practices. During the review several social enterprise organisations, which for the most part receive funding through the SG Third sector Team, were contacted for their views on supporting FTOs and indicated a willingness to work with the SFTF to support this sector. These included Community Enterprise in Scotland (CEiS), their subsidiary Just Enterprise, The International Social Enterprise Observatory and the Social Enterprise Academy. Qualitative interviews were also conducted with the Social Economy Manager for Scottish Enterprise, the Manager for Sustainable Communities at Highlands and Islands Enterprise and the former Head of Co-operative Development Scotland, who now serves as a non-executive director with the Scottish Wellbeing Economy Alliance.

Given the complex network of social enterprise organisations that exists in Scotland, the SFTF requires urgent advice at national level in order to identify the most appropriate sources of support and to map the most effective support journey for Scottish FTOs. There is also a need to upskill existing Social Economy lead officers within agencies on the synergies between Fair Trade, the B Corp movement and social enterprise and to provide information on the unique needs of FTOs as a group of social enterprises, within the wider social economy. This will need to both highlight where opportunities for growth exists within Fair Trade product sales and identify the community benefit for Scotland's communities and producer country communities through the importing (and where necessary) the processing of final product to market.

Case Study 5: Diaspora Communities and Fair Trade

The Oromo Coffee Company was set up by the Oromo refugee community in Manchester, with financial support from the Lorna Young Foundation, with the mission to Market Fairtrade coffee from their homeland in Ethiopia. The company brokered a deal with growers from the Oromia Coffee Farmers' Cooperative Union in Ethiopia to ship coffee to the UK, where it is roasted. The OCC is a unique social enterprise supporting both small farmers and UK communities.

The OCC supports Ethiopian farmers by paying fair prices; and provides training and work opportunities in the UK.

'It's been difficult for us because we have had problems with language and the culture, but we've had lots of help.'

The enterprise has been started up without outside investment and has relied instead on pro bono legal and Marketing services, most of them brokered through the Lorna Young Foundation, a charity that supports agricultural businesses in the developing world.

4.3.6 Green Consumerism

Most FTOs, alongside major retailers recognised the move towards the green consumer as a key opportunity for Fair Trade to promote its credentials in supporting sustainable livelihoods, biodiversity and climate action in developing countries, with the proviso that Fair Trade had to ensure that it effectively re-positioned its messaging as being part of the solution to the climate crisis. Eco-friendly packaging was also a growth area in which many FTOs were already 'ahead of game' compared to major retailer chains. Those surveyed were alert to, and ready to embrace, the opportunities that Market trends offered as chart 4.8 demonstrates, with a focus on environmentally friendly and organic products clearly regarded at the most important trend.

Chart 4.8: Consumer trends as opportunities for growth
(where each of 26 respondents rated each option provided).

Discussions in workshops attended by retailers and suppliers highlighted the opportunities for synergy between several current trends, including the organic Market and reduced meat consumption, 'Localism' and local provenance of produce and Fair Trade. In the Venn diagram below (Figure 4.2), Green City Wholefoods (a wholesale workers' co-operative and supplier of Fairtrade and organic product ranges) argued for a targeted strategy for Fair Trade messaging, highlighting that where the circles converge, the most opportunity exists to influence consumers/ target audience for sales growth focusing on 'Fairness for All' agenda.

Figure 4.2: Venn diagram discussed at workshop with Fair Trade retailers and suppliers

There were opportunities for spreading the FT message to 'active' or 'deep green' consumers, capitalising on the 'Thunberg Effect': consumers are seen as now being more open and ready to listen/ be educated. The importance of promotional activities to highlight the difference between traditional supply chains compared to Fair Trade's positive stories was also raised, with one respondent to the survey describing success as 'providing ethical and sustainable products that go beyond having just a fair trade story, also adding value in origins'. This was, again, linked to the provenance agenda and the importance of ensuring that the Good Food Nation Bill, which will come before the Scottish Parliament in 2020, references Fair Trade produce and its success in supporting direct producer relationships and shorter supply chains.

Chart 4.9 shows the relative value rating given by FTOs to various actions taken to boost sales growth, with the need to ensure buyers/consumers were informed about products and 'Fair Trade literacy' seen as critical to the future of sales, with high levels of customer engagement (whether with buyers or consumers) also being rated highly.

Chart 4.9 Most successful methods found to boost FT sales
(where 26 respondents across UK provided answers to this question).

4.3.7 Upskilling, Education and Target Setting

A perceived need for education and upskilling of the workforce of public agencies was expressed (prioritizing those with a public procurement function), as well as within SG directorates itself. The need to support awareness raising of fair and ethical trade amongst commercial food service providers tendering for public or business contracts was also seen as an important part of the 'upskilling' work needed.

This was a repeated theme reiterated through all the review's fieldwork, with a key role for both the SGID in advocating for Fair Trade's relevance across policy areas - and for SFTF (and its partners)- in acting as a trainer and educator on Fair Trade principles and the range and visibility of Fair Trade products available. The main barrier to fair and ethical trade in public procurement was seen as the lack of visibility and access to (or knowledge of) Fair Trade products. As a FE College Procurement Manager stated:

'The impetus has to come from customers (or Government) asking the right questions in terms of which products/ and the range of products are available. At the heart is a progressive approach to contract management: so that if a supplier states that 15% of its range is FT, then Procurement Frameworks need to make clear that year on year improvement to 25% of the range is required'.

John Clark, Catering and Cleaning Services manager, Glasgow Clyde College

As the National Performance Framework (NPF) in Scotland further develops and refines its indicators of impact, the setting of baseline and targets for growth and range of FT products specified within procurement frameworks is a practical and evidence-based opportunity for Scotland to demonstrate ongoing commitment to Fair Trade.

4.4 LearningPoints

4.4.1 An Integral Part of Active Global Citizenship and the Wellbeing Economy

As Scotland positions itself as a leader in development of a wellbeing economy model, driven by people and planet, there are opportunities for Fair Trade to position itself at the heart of these developments, reflecting not only a domestic but global approach to achieving wellbeing within the SDGs.

As part of the national debate on sustainable food supply chains, there are opportunities for alignment of Fair Trade suppliers and products to the new organic, locally sourced demand for food, which emphasises direct relationships with producers.

Public and corporate procurement contracts relevant to Fair Trade products are the most effective mechanism for increasing sales growth at scale in Scotland. Food service providers could also be supported to build on their knowledge and range of Fair Trade products offered to the public and corporate sector Markets and encouraged to increase their FT product range year on year.

4.4.2 Target Setting

Much has been achieved in leading by example through the SG's Sustainable Procurement Strategy and online resource tools. However, a next step on the sustainability journey will be to set baseline, indicators and targets for both the growth of expenditure on fair and ethical trade (and environmentally sustainable products) and the expansion of product ranges. The key procurement agencies Excel, TUCO, NHS, APUC are encouraged to work together to achieve year-on-year improvements.

4.4.3 New Models of Fair Trade: Direct Producer Relationships and Mutual Community Benefit

Working with actively engaged Fair Trade Universities, Colleges and FTOs in Scotland, there are opportunities to develop and support innovative models of short Fair Trade supply chains, working in partnership with producer groups in the developing world to introduce new products (and engage disadvantaged communities in Scotland) for mutual communities' benefit.