Fair Trade in Scotland: review

Chapter 5 International Good Practice: Detailed Swedish Case Study and Other International Examples of Practice

This chapter reflects on a case study visit to Sweden carried out for the purposes of the review in order to benchmark stated policy and practice in Fair Trade with another European neighbour, based on a number of interviews with key personnel within the Swedish Fair Trade movement. Towards the end of the chapter a number of short case studies are cited relating to other international examples of innovative practice.

5.1 Introduction: Sweden and Fair Trade

Promotion of Fairtrade is the main role of Fairtrade Sweden (FTS) which consists of two separate entities: an association that aims to increase the knowledge of Fair Trade in Sweden and a limited company which is responsible for the FT Mark Licensing Scheme in the country. The main campaigns run by FTS are a spring campaign involving local campaigners and an autumn campaign involving retailers. It is funded through a number of sources: member subscriptions from the Fairtrade Town / City scheme, the Swedish Postcode Lottery, the Trades Union's International Development arm and by Konsumentverket: the Government Consumer Agency.

The Swedish Government provides support to FTS through its development agency SIDA (Swedish International Development Co-operation Agency). A variety of different organisations provide support to Fair Trade shops and cafes in Sweden. These include Companion (Social Enterprise Development Agency) and funders such as the Heritage Fund.

FT sales are checked on an annual basis by Kantar SIFO with information gathered from stores and the information is published on FTS website's in April each year. As in Scotland and the UK, a public survey is also carried out annually to measure the levels of FT brand recognition amongst the general population. In 2018 this was 89% of the population^[70] with a high trust level reported. In 2018 there were sales of over 4 billion Swedish Kroner (£3.2 million) which was an increase of 10% on 2017. Figures include all outlets including hotels, coffee shops, FT shops and large and small retailers.

In 2018 67% of FT products were also organically certified. A sizeable percentage of FT producers farm organically but do not have a second certification. FTS believes that this needs to be emphasised in messaging due to producers receiving a higher price for FT and organic products. In terms of organic produce, 75% of bananas sold in Sweden are organic, but at times organic bananas are sold at a low price point driven by supermarket marketing campaigns and large volumes enabling economies of scale.

Despite Sweden having a strong national economy, evidence suggests that the Swedish population still favour lower prices. For example, one stakeholder interviewed reported that Lidl, a low cost supermarket, reports its highest sales performance in a wealthy part of Stockholm.

5.2 Fair Trade Practice in Sweden: Ambassador Scheme

The first FT certified product in Sweden was coffee in 1996 / 97 and it was suggested that by spreading knowledge about FT, sales could be increased. To this end, FTS established an 'Ambassador' scheme in 1998 and FTS was tasked to deliver this initiative.

Initially about 450 Ambassadors were recruited throughout Sweden. The concept of FT Instructors was initiated to expand the number of ambassadors. FT Instructors completed a 2 to 3 day training course, in partnership with Adult Education Associations, and their role was to train the Ambassadors at a local level in around 20 cities around Sweden.

This was the pattern up until 2016 when FTS Sweden found that they were unable to train potential Ambassadors due to the lack of Instructors in many geographical locations. Cost was also an issue as the training course cost in the region of Euros 50 to 100 and this had to be paid for by individual volunteers.

In 2016 FTS was tasked with looking at how the training could be implemented in a different way and how barriers, such as the cost to trainees, could be overcome. A digital training model was proposed, thus eliminating the requirement for an Instructor in multiple locations and at zero cost to the potential volunteers.

5.2.1 'Aware Consumers' vs 'Campaigners'

Through dialogue with prospective volunteers and existing ambassadors it was clear there were two very reasons for their engagement: some of them only wanted to learn more about Fairtrade and become 'more aware consumers', while others wanted to take a bigger part in activities and Fairtrade campaigns. This led to a two-tier training structure proposal:

a. FT Supporter - learning for your own knowledge and being a supporter of FT

b. FT Ambassador - additional workshops on how message can be passed on, what activities could be organised, collaboration with others and creating a local group.

Due to financial constraints, the Board of FTS had to reconsider its priorities and the planned Supporter programme became the Ambassador Programme, with the inclusion of designated time in which Ambassadors could meet.

The Ambassador scheme is not formally evaluated but a Facebook group encourages members to share information about the range of campaign activities they are arranging. In addition, there is an Ambassador Newsletter which comes out four times per year which Ambassadors receive some weeks before and some weeks after a big campaign. A survey is carried out annually to identify the range of activities that the ambassadors carried out during the year and how they are feeling about their present role, providing valuable insight on the scheme and how it could be improved.

5.2.2 Profile of 'Ambassadors'

The profile of a 'typical' Ambassador is a woman in the age range 55-65 or older and is middle class, engaged, financially secure and has time and opportunity to be a volunteer. Young and older men are also engaged. Ambassadors have a wide geographical spread across all the major cities and in also in rural areas, where engagement can be stronger as people meet more regularly and may have strong links to the local networks.

5.2.3 Engagement Co-ordinators

The volunteer role of Engagement Co-ordinator has been developed to roll out the model and these now exist in 8 cities. The co-ordinators have a local responsibility for a group, take part in FTS campaigns and organise activities. These are volunteers recruited from existing Ambassadors who were already successful, and they received more intensive training and support and a specific role and name. Engagement Co-ordinators meet once a year to learn from each other and individually they have regular meetings with the Ambassadors in their areas. FTS is now considering how to increase local engagement and building local teams to make FTS more relevant and interesting and engage more people.

5.3 Fairtrade Sweden Member Organisations and Partnerships

FTS has about forty member organisations including Trades Unions, Development Agencies such as Red Cross, SOS Children's' Villages and the Scouts. The Swedish Scouts, for example, have ensured that all uniforms are made with FT cotton and the Swedish Red Cross (SRC) has worked closely with FTS to raise awareness of Fair Trade amongst its staff. To date collaboration has only happened at a national level and in communication with FTS Head Office. FTS is now looking at how collaborations can take place more locally, in relation to raising awareness of Fair Trade within their organisations amongst volunteers and employees. An FTS staff member has now been appointed with a specific remit to work with Member organisations on this strategy.

For FTS the SDGs refer to partnership for the goals and are considered a good arena for bringing FT and wider interest groups together using the 10 FT principles and 17 goals. In the context of the above collaboration working with SRC, this is a good example of how organisations can work together to achieve common objectives.

A good example of FTS's effective partnerships is the joint work developed between FTS and Adult Education Associations. In 2020 FTS plans to launch a revised proposal for two routes to become an Ambassador in order to increase accessibility to training:

a. Through the Adult Education route (Study Circles / Evening Classes) available as PDF or printed and four sessions of 2/3 hours each are planned with links to films and discussions

b. Digital Ambassador Training now 2.5 hours instead of 2-3 days as before.

5.4 Campaigns and Work with Schools Including Links to SDGs

Whilst campaigns are regarded as important by FTS, its role in educating people is considered equally important and FTS will be launching a new training programme based on the SDGs which will clearly link FT principles to the SDGs.

FTS does not currently have a programme specifically aimed at educational organisations, unlike Fair Trade in Scotland. To address this FTS are looking into introducing an educational engagement programme with a focus on increasing young people engagement. Some years ago, FTS had some funding for work with schools and materials were produced for educational organisations from kindergarten to high schools and included 'Swedish for Immigrants' courses for which a study programme was developed. However, materials were found to be too long (100 pages for High Schools) and complex for teachers and in 2020 it is planned to reduce this to 20/25 pages.

5.4.1 New Training Materials Linked to SDGs

Knowledge of the SDG's amongst the Swedish public is improving and within the education sector there is also more awareness in subject specific studies. Each section in the new materials will relate to one of the SDG goals. With an emphasis on the climate crisis and poverty reduction, it is intended that the resources will help to increase knowledge of how FT can help to improve the living conditions in developing countries and include case studies of environmentally friendly agricultural practices.

5.4.2 Engagement with Young People: Penpals Association

In 2019 FTS started working with an NGO called Brevvannerna^[71] on a project known as 'Letter Friends' or 'Penpal Association.' The Project starts with FTS's engagement coordinator writing a letter to pupils giving them tasks to help them to think about FT. The letter is read to each class and pupils in a school who are then responsible for carrying out the tasks. The 'Penpals Association' helps the pupils in summing up their work and providing FTS with their responses on completion. A response is then provided, and pupils feel they are in direct contact with FTS. As well as a letter a short film is produced with a smartphone which encourage the pupils to make positive changes, such as where to find FT products and talking to parents. To date, six schools have received the letter and the project has proved popular with students. The pupils appreciated being listened to by adults and the 'Penpals Association' has a website where teachers can download the letters.

The 'Penpals Association' is focused on SDG 4 (Good Education for All) and 13 (Improving Education of Climate Change Impacts) and new funding is currently being applied for, with FTS also partly funding the project. This Association has now also established a collaboration with KTH (Tulia Technical High School/University), a highly regarded educational institution through which pupils will now be able to explore other topics relating to Fair Trade and embedding FTS within future educational dialogue.

5.4.3 Annual Fair Trade Campaigns

Each year there are two main campaigns, the autumn campaign is focused on stores and sales and the spring campaign focuses on local campaigning and engaging with FTS Member organisations and Ambassadors and local events. A survey is carried out annually which requests information about what activities Ambassadors have organised during the year. Ambassadors are also asked to check if there were any offers on FT products, and what campaign material is on display in shops etc.

5.4.4 Monitoring of Post Campaign Sales

A company is paid by FTS to monitor and evaluate the information gathered from the surveys and looks at sales of FT products the week before, during and after the campaign. FTS works with retailers is responsible for the liaison with the larger retailers such as LIDL, Co-op Sweden and ICA. FTS contact the retailers several months in advance to inform them when the campaign will be, the content of the campaign, the materials available and how they can be used. Part of the aim of this engagement is to ensure that products are in the stores all year round and that they actively participate in the campaigns with special offers and that when promoting the products, they refer to the campaigns.

5.5 Work with Fair Trade Product Retailers

FTS also works with Systembolaget, the national wholesaler for alcoholic products, with the aim of increasing the volume of FT products sold through their 440 retail stores. In 2017 Systembolaget stocked 43 Fairtrade products and stock products certified by Fair for Life^[72] which certifies products in countries which are not developing countries.

Systembolaget actively promotes responsible consumption and employs a Sustainability Officer to ensure labour producing the products in developing countries are monitored through a reporting system. A Code of Conduct, 'amfori', (Trade with purpose),^[73] was developed through work with producers by the Business Social Compliance Initiative (BSCI) which complies with UN Human Rights Conventions.

FTS recognises the need to improve explanations of what FT is given the number and variety of new certification labels available on the market. When Rainforest Alliance (RA) and UTZ merged in 2018 it was reported that they approached Fairtrade International with a view to amalgamating with the FT Mark. However, FTI was not prepared to lower its standards relating to producer empowerment and ownership.

5.6 UN Sustainable Development Goals (SDG) & 'Living Wage' Campaign

In 2006 Fairtrade International (FTI) published a report linking Fair Trade with the SDGs and FTS responded by holding seminars with a range of relevant speakers to explore subjects related to the SDGs in order to achieve common goals.

SDG /FT training materials will also be produced in 2020 across the partners involved. The materials will examine all 17 goals and go on to focus on the most relevant ones for Fair Trade, making the links to individual commodities. For example, the coffee literature will analyse the key risks, including climate change, within the coffee sector and how conditions for the producers can be improved. This is similar to the publication provided by the UK's Fairtrade Foundation on FT and SDGs.

5.6.1 Living Wage, Worker's Rights and Climate Change

These are the three main themes highlighted by FTS, which believes that the UN Goals cannot be achieved unless a living wage for producers / farmers is achieved. It was clear during our study visit that the climate change crisis has been prioritised by FTS in recognition of the fact that producers are also part of the solution. An example provided, was of a sugar producer from Nicaragua who is now using the waste materials from coffee production to produce energy and fertiliser.

5.7 Government Support, Policy Coherence & Public Procurement

In addition to the Government support FTS receives from SIDA, the Swedish Government also has influence to increase FT sales through Public Procurement. FTS employs a staff member who leads on procurement and strategic oversight over FT towns and cities issues. FTS initiates discussions about procurement and in the Fair Trade Towns and Cities attempts are made to influence political leaders. However, FTS regards current legislation as preventing purchasing policies which specify specific FT products: to overcome this FTS takes an advisory role in pointing out the criteria and standards that must be followed to potential procurers.

FTS also meets with the Government Department for Public Procurement to offer insights on FT and raise their awareness of the issues. This has resulted in visible increases in FT sales in some cases.

Whilst FTS has no direct links with school catering, there are examples of FT awareness raising by FT Towns, such as one where the town facilitated its' school's the lunch menu listed Fairtrade ingredients.

5.8 Links between FT and Social Enterprise/Social Economy

In the past FT in Sweden has focused on the brand and the licensee, together with spreading awareness of the FT label and increasing sales. There has been less focus on links with smaller FTOs like social enterprises. However, FTS has links with the Association of FT Retailers (which are Members of FTS).

There is a recognition that its future work with FT cities, towns and municipalities FTS needs to broaden its outlook and the content of the Certification needs to include the full meaning of FT with the outcome of a fair deal for farmers and workers.

In some FT cities there is collaboration between FT and social enterprise such as FT cafes and shops. This mirrors an increased interest in social development in Swedish society generally including sustainability, climate change and FT themes relate to these issues.

FTS maintains that FT should include gender equality, children's / worker's rights and fighting against climate change. FTS will in future include these topics in any dialogue. FTS has found it difficult to include the 'eco' credentials of FT into awareness raising as the focus is on reducing poverty and creating social change.

5.9 Fair Trade Social Enterprise Cafes

Initially an EU funded project, Fair Trade Social Enterprise Cafes were developed and opened as a franchise chain of social firms, employing people who have difficulty accessing the labour market, with the aim of both supporting communities and increasing sales of Fair Trade, ecologically and locally produced food and drink products. Kafe REKOmmenderas in Sweden is the parent organisation responsible for promoting the concept of FT Cafes and aims to maintain an overall standard for the cafes. They are supplied by wholesalers that have a good range of FT products, one of the main suppliers is MENIGO.^[74] There is an agreement in place with wholesaler House of Fair Trade, a subsidiary of UK social enterprise Divine Chocolate Ltd, to supply other FT non-food products like clothes and handicrafts.

The cafes are situated in a variety of premises including a local museum, cultural centre, library and high school. FT cafés located in schools provide additional benefits as pupils can learn about FT and social firms through their interaction with the FT café. Support from the local councils include reduced rental and business support. Discussions are also currently taking place with the Ekobank about supporting the Social Enterprise FT Café concept with specific low interest loans.

One of the important developments within FT in Sweden is the course run by the Red Cross Folk High School which has been in place for 20 years - mostly delivered through distance learning but with some face to face training at the Folk High School. Those who have participated in this course have formed a very useful network from which individuals can be recruited to recruited to set up FT cafes and FT shops. Challenges still persist with this innovative model; with upskilling networking and knowledge a key priority and small FT shops are struggling in the face of large retailer competition.

5.9.1 'South to South' Fair Trading opportunities and a future for North-North Fair-trading?

'South to South' Fair Trade within country or continent is a growth area for Fair Trade and supports the concept of sovereign food security in terms of sustainable livelihoods. FT Sweden is fully supportive of this development. With the climate crisis at the forefront of consumer and policy makers' thinking, there are questions being raised about whether it is better to buy FT or 'Local' or 'Buy Social' linked to social enterprises. Whilst most FT products in the North can only be produced in the South, this may change in the future (for example, as has been the case with sugar beet production in the North). The development of South-South Fair trading offers opportunities to mitigate this impact and consumer concerns.

Alongside South-South developments, the WFTO is also keen to promote Fair Trade principles (such as a living wage and the rights of disadvantaged employees) as a way of transforming enterprise in the North, as well as the traditional North-South model. There is some disquiet from Fairtrade organisations internationally about this radical change to the way Fair Trade is understood and it is not a concept currently accepted by either FTS or FTF in the UK. It remains to be seen if WFTO's radical re-think to FT's message gains traction over the coming years.

5.9.2 Barriers to Sales Growth in Sweden

Our study visit found that those Fair Trade Leaders interviewed perceived barriers to be in the three main areas.

The first is focused on Fair Trade product differentiation, visibility and price. There are several new labels entering the market and FT's position within this 'label jungle' is challenged; whilst UTZ and RA are better than no certifications at all, the price of the commodity is much lower that for a Fairtrade Mark product; FT products are not often placed in prominent positions in stores.

The second area cited was a perceived weakness in the FT system itself, where the Fairtrade Mark certification scheme is sometimes unable to provide a 'Living Wage' to producers because of the price set and paid for the commodity in each country of origin.

A third continuing barrier to overcome for Fair Trade promotion amongst consumers, was their lack of detailed knowledge (Fair Trade literacy). For example, the environmental impact of transporting FT roses from Kenya actually has less of a carbon footprint than roses grown in greenhouses in Holland, but there is a widespread perception that such imports are carbon intensive.

5.9.3 Opportunities for Sales Growth

There are several existing supply chains established to promote the sales of Fair Trade product offering in Sweden. The House of Fair Trade (HFT)^[75] - a Swedish wholesaler which supplies FT shops with FT and fairly traded food and handicrafts - was acquired in 2018 by Divine Chocolate Ltd as a means to extending their market share and will continue to operate under the HFT brand and Swedish retailer Sackeus^[76] supplies FT products to FT shops - collaborates closely with the Swedish Church. They also have a brand called Ecuale which includes coffee and chocolate in their range and they also supply Co-op Sweden.

FTS is seeking to increase its support for local FT groups in cities, towns and local authorities in collaboration with the adult education associations and other member organisations with the aim of increasing their activities over the year.

Finally, FTS cited their targeted campaigns as a key opportunity for growth, with an ambition to become a leader in creating change to reach the UN SDG's by 2030. For the next 3 years FTS will have 'Living Wage' as its campaign, with a focus on Cocoa in the first year; they have recently produced a report on 'Right to a Living Income' which received wide press coverage and they will be working on campaign and advocacy work to explain and address why a 'Living Wage' hasn't been achieved yet within the FT brand certification.

5.10 Summary Learning Points: Swedish Perspective

Support to Fairtrade Sweden by SIDA (Swedish International Co-operation Development Agency) and The National Consumer Agency has proved essential to Fair Trade's success in Sweden with the Fairtrade Ambassador Scheme playing a significant role in raising awareness of FT through 'FT Ambassadors' in all parts of Sweden since it started in 1998.

The links between SDGs and FT are recognised and new training materials are being developed for launch in 2020, emphasising their relevance to FT and linked to the FT International 'Living Wage' campaign. FTS has a key role in briefing the Government Department for Public Procurement and local authorities about FT and has a staff member with a specific procurement remit.

Bi-annual FT campaigns in spring and autumn retail stores are monitored and data collated, with a consumer research agency providing FTS with Swedish FT sales statistics. FTS works closely with retailers leading up to FT campaigns with supply of display materials and handouts.

The Swedish Association of FT Retailers supports FT Shops, 'World Shops' and FT cafes which are run as social enterprises selling mainly FT products but also locally produced products and organic produce, taking advantage of the 'provenance' trends in consumer demand.

FTS has linked up with the Swedish 'Letter Friend' Association which links school pupils through a digital platform with social causes including Fair Trade.

Case Study 6: Fair Trade for Mutual Benefit: South Korea

South Korea was mentioned by several of the key stakeholders and FT leaders, as a recent and innovative example of a country where FT sales have seen a sharp increase. Research has found that the reasons for this growth include:

• Strong Civil Society Organisations and social economy sector committed to advocating for Fair Trade to consumers
• A growing FT Towns Network, with Seoul the world's first 'megacity' to have been awarded FT Status: education and advocacy work is strong
• Diversification of Fair Trade products on offer
• Strong and direct relationships with producers
• Local government's efforts to accept and implement Fair Trade.
• Education and advocacy: civic society, social enterprise and government: there is high public awareness and adoption of Fair Trade in South Korea, with the role of 5 consumer co-operatives in the country (616 stores nationwide) and their ethical purchasing policies being regarded as crucial.

The Asian F T Network Trading Company was established in 2012 with support of consumers and citizens. It both promotes Fair Trade and develops, distributes and sells Fair Trade products itself. This includes products which contain both South Korean ingredients and those from the global South or less developed Asian countries. This provides community benefit and empowerment at both domestic and international levels.

The Seoul Government has designated the AFTNC organisation as an 'Excellent Social Economy Enterprise' with the support of the Mayor of Seoul. The company has launched 'Fairday Cost Rica Tarrazu Coffee' and develops and trades ingredients from the Philippines, Vietnam working with marginalised groups and farmers. Products includes those developed between South Korean and Vietnamese producers for mutual benefit to both communities' and economies.

Example: Fairday Cashew Soymilk

''Combines soymilk from South Korea with cashew nuts from Vietnam. AFTNC works with the Pucung Heung Producers' Association, a co-operative with 139 households farming less than 2 hectares of land. Cashew nuts from the co-operative are produced using eco- friendly farming methods, prohibiting the use of pesticides that are harmful to human bodies, and also prohibiting incineration, smoke emissions, and the use of hazardous materials packaging. The Fair Trade Premium, supported by the Asia Fair Trade Network, has provided fertilizers to the poor farmers in the village and presented scholarships and bicycles at nearby elementary schools.'

From the Asia FT Network Sales website

Case Study 7: Legislating for North-North Fair Trade - France

In France, an unexpected consequence of the Government's push for intellectual property for local produce (provenance) has boosted interest in projects focused on locatisation and direct producer relationships. The French Government has embedded commitment to FT in law:

'France is one of the few European countries to have a public law about fair trade' Where in 2005 French law defined Fair Trade as a trading relationship between northern buyers and economically disadvantaged producers from the South, 2014 legislation on social economy +

2015 decree defines Fair Trade as a universal concept, equally applicable to North - North trading relationships with the following FAIR Fair Trade core principles mentioned.

6 core fair trade principles in the French law (2014)

a. Economically disadvantaged producers organized in democratic organizations

b. Long term commitment for buyers > Minimum 3 years + derogation for the 1st year (this is more than the 2 years specified by the FT Mark)

c. Payment by the buyers of a complementary amount to support collective projects dedicated to developing value chains and local areas

d. Fair price paid by the buyers based on identified production costs and balanced trade negotiation

e. Traceability and transparent information for consumers

f. Education and awareness-raising actions towards consumers on sustainable production and responsible consumption

Case Study 8: Fair Trade Design Innovation - Holland

'investing in social innovation … researching supply chain improvement'

Fairphone is a social enterprise company and registered B Corp set up in 2013 which is committed to creating a fairer electronics industry by developing and retailing a sustainable smartphones, designed and produced with minimal environmental impact and prioritises workers' welfare.

The company is based in Amsterdam, Netherlands and was supported in its start-up phase by the Waag Society, a foundation which aims to foster experimentation with new technologies, art and culture.

Fairphone was founded to develop a mobile device that does not contain conflict minerals (which in smartphones are typically gold, tin, tantalum and tungsten), has fair labour conditions for the workforce along the supply chain producing it and help people to use their phone longer. It is committed to circular economy approaches to re-cycling smartphone components and operates a Recycling programme for old mobile phones.

The second version of the company's device is one of the first modular smartphones available for purchase - designed to be easily repaired and upgraded.

Fairphone was founded by Bas van Abel, Tessa Wernink and Miquel Ballester as a social enterprise company in January 2013, having existed as a campaign for two and a half years.

Transparency and openness

From the start, we've been very honest about what we can and can't do. It's almost an open source approach: if we put it out there, we can innovate and show what the best practice is, where we failed and where we succeeded, and other companies starting up as social enterprises can learn from our mistakes or achievements.'

Tessa Wernink: (former) CEO Fairphone: January 2017

Sales growth and marketing

The Fairphone 2 was the first smartphone to be awarded with a 10/10 score at iFixit for repairability and in 2019 won the Partnership Of The Year prize at the Responsible Business Awards. More than 130,000 Fairphones have been sold to date and in 2017 had 60 people from 22 countries employed who spoke 18 languages.

By 2019 Fairphone had 290 employees with revenue of $570M and has raised a total of $25.4M in funding.

References: www.fairphone.com