Caffeine with a Conscience

12 Pages Posted: 10 Jun 2009

See all articles by Andrew Wicks

Andrew Wicks

University of Virginia - Darden School of Business

Jenny Mead

University of Virginia - Darden School of Business

Abstract

Is "Fair Trade" really fair? This case examines the concept, history, and logistics of the Fair Trade movement, specifically for coffee. Fair Trade began as an attempt to ensure farmers received fair compensation for their crops and credit when needed. Fair Trade also provided opportunities to help coffee growers learn best practices and sustainable farming methods (minimal damage to the environment, for example). But Fair Trade had its critics, who claimed that ultimately the farmers did not benefit and that retailers charged more for Fair Trade products and pocketed the difference. This case examines these issues through the eyes of one coffee-drinker who has specifically chosen her caffeine venue because of the Fair Trade designation.

Excerpt

UVA-E-0327

CAFFEINE WITH A CONSCIENCE

Jo Seidler loved nothing better than a good, strong cup of coffee, and she had chosen to purchase her mocha lattes each day at the Eye Opener Coffee Café on her way to work. The main reason for her choice was the messages conveyed on the hand-lettered signs displayed on the counter. “Is Your Coffee Fair to Farmers?” read one. The other stated that the café's coffee was “purchased in accordance with international fair trade standards.” Even though the Mudhut two blocks away was more convenient, and the mom-and-pop Java Hut down the street was cheaper, Seidler had based her decision on the “fair”-ness factor. She wasn't exactly sure of the specifics involved in Fair Trade, but she knew that the practice benefited farmers in South and Central America, so she thought there was no need for further research into the issue. Yes, prices at this coffee shop had shot up since the signs first appeared, and a typewritten card on the counter explained that purchasing Fair Trade coffee was more expensive. But Seidler was more than willing to pay the extra money if it would give the disadvantaged a break. According to the Eye Opener signs, participating companies would donate 5% of sales to growers.

When a friend had mentioned that the concept of Fair Trade was actually a plot to exploit consumer “do-goodism” and that its benefits tilted heavily to the companies selling the coffee, Seidler was taken aback. She wondered if her desire to be a good citizen of the planet was instead making her a good patsy of the planet. Seidler knew she had two good weapons to help her learn more and make a decision: her computer and the Google search engine.

Fair Trade's History

Fair Trade was a movement designed to benefit farmers in developing countries by charging consumers a premium on coffee and various other items ranging from cocoa to orange juice to make sure that the farmers and growers received a decent wage. The concept of fairly traded products went back to the mid-1900s, when missionaries in Africa would arrange for the sale of village handicrafts in the United States and Europe, returning the profits to the village. But the contemporary Fair Trade movement involving growers and their crops began in the late 1980s in the Netherlands. The goal was to target conscientious “consumers who would be willing to pay a bit extra at the supermarket in exchange for the assurance that Third World farmers received a reasonable return for their labor.”

. . .

Keywords: business ethics, ethical issues, stakeholder management, agriculture, developping countries, coffee, branding, marketing, Latin America, retail

Suggested Citation

Wicks, Andrew and Mead, Jenny, Caffeine with a Conscience. Darden Case No. UVA-E-0327. Available at SSRN: https://ssrn.com/abstract=1417195

Andrew Wicks (Contact Author)

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States

HOME PAGE: http://www.darden.virginia.edu/faculty/wicks.htm

Jenny Mead

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States

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