fair trade market trends and developments

“How can we rest while so many people are hungry in the world while there is enough food for all?”

3.7 Billion Euro global retail sales Fair Trade

65 Million Euro sales from Asia

43%

2007 20100

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

FT Certified Goods

Sales

Year

Euro

s in

Mill

ions

Growth in Fair Trade SalesNon Certified vs.

Certified

6%

2007 20100

50100150200250300

Non-Certified Goods

Sales

Year

Euro

s in

Mill

ion

• Fair Trade has been recognized by the European Parliament (2006),

• The European Economic and Social Committee (2009),

• The European Commission (2009) • The Committee of the Regions (2010)• National initiatives: Italy, France, Belgium

HANDMADE in the MARKET TODAY:

The influences behind the trend.

Karen Gibbs & Colvin English

The Market ContextWhat is the US market environment today for

Handmade products? What trends are influencing the

interest in Artisan?

US retail sales are growing. The American economy

continues to expand. US consumer confidence

improves.

#1.

The US retail sales are driven by higher-end goods. Economic demographic consumption

converges on affluent consumers.

#2.

the EVIDENCE:

• Post recession private spending is largely due to affluent citizens (incomes $100k+ annually) returning to pre-recession spending levels.

• Wealth in the US is concentrated within the wealthiest; the wealthiest 10% of US households account for 36% of total US income and make up half of total consumer spending.

• In 2012, these households consume predominately high-end but not ultra luxury goods.

- Unity Marketing, Luxury Report 2013

Social Impact Purchasing is “in”. Consumers

increasingly care about the impact of their

purchase and they want Transparency.

#3.

The facts:

• The study found that 76% of people say they were willing to pay $25 for a $20 garment if it is certified as being made under fair labor conditions.

– MIT Case Study

• Another study found that 80% of individuals are willing to pay more for an item it assured it was made under good working conditions.

- Washington DC Institute for Int’l Economics

CONTENT + COMMERCEContent marketing is going mainstream.

#4.

• Freely accessible, high-quality educational content is proving to be more effective than advertising. -

American Marketing Association (AMA)

• Marketing is telling the world you’re a rock star. Content marketing is showing the world you are one. – Robert Rose

The SuPPORT:

US Consumer’s have a thirst for Authentic

Brands. Story connects to place & origin.

#5.

• Narratives connect consumers to other people and places, adding a personal and experiential component to a tangible good and giving it an aura of authenticity. - NY Times

• Consumers feel a desire for the real in an increasingly staged, contrived, mediated world.

- James H Gilmore, Authenticy

The SuPPORT:

Culture is being recognized as a driver of

Economic Growth.

#6.

2013 report show that "world trade of creative goods and services totaled a record US$624 billion in 2011 and that it more than doubled from 2002 to 2011; the average annual growth rate during that period was 8.8 per cent." - 2013 Creative Economy Report, UNDP & UNESCO

The facts:

SOME COMPANIES WE ADMIRE

Demand for Global Handmade Product

In the United States today, there is an unprecedented demand for handmade and artisan products in the gift,

home and accessories markets.

This sector will continue to increase as U.S. consumers and retailers seek handmade, ethically sourced products that are sustainable and are differentiated from mass-

produced products

There is a growing desire for products created by artisans with a sense of culture and meaning – products

which give back to the communities from which they come

“There have been more sustainable and ethical ranges introduced by

large corporate retailers than ever before.”-

Ethical Fashion Forum

WholesalersRoostJonathan Adler

Raven & Lily

Artecnica

Canvas

Market Opportunities

In the EU

Mark Kwami

Home Decoration market slowly recovering

• Decline in FT market for Home Decoration• Importers scaling down order volumes• Consumers more conscious about how they spend

Feel Good Products

• Social Impact Design• Environmental Impact Design• Cultural Impact Design

Renewable Raw Materials

Renewable Raw Materials

Natural Finishes

Re-Claim, Re-Use

Up-Cycle

• Sophisticated Recyling

• Products with an identity• Products that show their origin

• Products with a story• Hand-made productsAuthenticity

Selling you QUALITY and your Craftsmanship

“Hand-made”

Small is beautiful & Manageable

• Smaller collections• Quality not quantity

Branding

Branding your products

Website Design

Social Media

Co-Creation

• Design Input• In touch with customers and trends• Brand and Market your products• Lasting relationships

GROWTH of Online Retail

E.g. Flash Sales Sites / or Shopping Clubs

• Online concept stores• Curated collections• Limited time span and limited quanity• Discounted offers• Membership creates community

Smart:• Book limited contingent with designer/manufacturer• Customer pays in advance. At the end of the time period, products shipped to customer (sometimes directly from designer/manufacturer)• Limits risk for online platform

E.g. FAB, MONOQI, Westwing, Urbanara

Changing Distribution Channels • Traditional distribution Channel

Exporter

Importer/Wholesaler

Retailer

End Consumer

New Distribution Channels • New options Exporter

Importer/Wholesaler

Retailer

End Consumer

Direct Importing Retailer

Online Retailer

FullfilmentServices

Increase in direct importing retailers

• Niche Market• Lower Volumes• Higher prices• Shorter order frequency• Long term relationships

Fulfilment Services • New opportunities• Warehousing and distribution• Flexible service offer (invoicing, stock keeping, quality control, returns, customer service etc.)

Invoicing

Customer Service oriented

• Show more interest in the well-being of your customers• How are your products performing?• How is their business doing?• What can you do to support them? (packaging? Shipping?...)• What are they looking for next? (design, trends, products etc.)• Visit if you can

2 Box sizes:

• Inner Box• Outer Box

• 100 Cards/Inner box

• 4 inner boxes in one outer box = 400 cards in Total

Professionalize your export packaging

Smart Shipping Solutions

• Small mixed consignments for retailers• Door to door delivery by postal services• Enables smaller retailers to test product• Can purchase on demand

Conclusions • Invest in Sustainable Design• Authenticity• Quality• Branding

Conclusions • New distribution channels• More customer service• Smarter Shipping solutions• Investigate opportunities of new online-economy (Fulfilment services, online payments etc.)

Conclusions • Diversification- Domestic/Regional• Tap into growing markets• Less vulnerable to fluctuations in export markets

Conclusions • Changing Mind-sets• Move from Poverty Alleviation to Value Creation/Addition

• Fairtrade goes mainstream• Growing consumer awareness• Value for money (both in terms of design and product quality)

Thank you