U.S. Coffee Giant Agrees to Buy Fair Trade Coffee After Negotiations with Advocacy, Shareholder Group

Baltimore, September 17, 2003 — Who said this?

"The current coffee market forces coffee growing families to sell coffee at prices that are not high enough to meet their most basic needs, such as food, education and healthcare," the announcement read. Was it a fair trade activist on the fringes of the world trade talks in Cancun? A parishioner promoting fairly traded coffee in a U.S. church?

Actually, it comes from America's largest coffee company, Procter & Gamble.

The consumer products powerhouse announced this week that it will begin selling certified fair trade coffee. Depending on the amount of coffee it eventually sells on fair trade terms, the move is good news for small-scale coffee farmers who are being ruined and impoverished by historically low prices.

The coffee giant's decision was negotiated with a group of small investors and fair trade advocates that included the Interfaith Fair Trade Initiative, a project of Lutheran World Relief. The Evangelical Lutheran Church in America's office of corporate social responsibility also took part.

The decision is a sign of the emerging market potential of fairly traded coffee, a movement that began mostly in food coops and then expanded to parish halls and college campuses.

P&G also mentioned "providing a fair price to coffee growing communities" and that its new fair trade coffee line would "support grower quality of life," according to a corporate press release. To address these concerns P&G agreed that its Millstone brand would purchase at least 2-3 million pounds of fair trade certified coffee within the next two years.

"We're glad that Procter & Gamble is making this first-step commitment to fair trade, and look forward to the day when it commits to paying farmers a decent price for all its coffee-like the coffee companies that pioneered fair trade," said Sarah Ford of LWR's Interfaith Fair Trade Initiative.

Lutheran World Relief began the LWR Coffee Project six years ago to help small farmers through the sale of fairly traded coffee in parishes and beyond. More than 3,000 Lutheran parishes have joined the project. They buy coffee from fair trade pioneer, Equal Exchange, all of whose products are fairly traded.

"With their massive volume of imports P&G has a huge opportunity to make a difference for farmers and send a signal to the rest of the industry. We'd like to see our competitors aspire to 100 percent fair trade," said Rink Dickinson, president of Equal Exchange. Estimates are that P&G's new commitment is to make about five percent of Millstone fair trade coffee. Its much larger Folgers brand will not include fair trade coffee.

USA Today reported Monday that the P&G move "is expected to nudge rivals, including Kraft and Nestle, to consider fair trade coffee."

"Today's announcement means that P&G joins the ranks of conventional companies such as Starbucks, Sara Lee and Seattle's Best in offering a modest portion of their coffee under the fair trade label," said Ford.