The commercial challenge of fair trade

More people are buying ethical goods - and not just because they feel they should, says Roger Trapp

The announcement on 26 November that the Co-op was switching its entire range of own-brand chocolate bars to ethically produced cocoa was a great fillip for the fair trade movement. The deal between the retailer and the Ghanaian cocoa co-operative Kuapa Kokoo and its London-based marketing arm, Day Chocolate Company, could lead to a doubling of UK sales of fair trade chocolate, from £3m to £6m.

But, important as the move is in an industry that is plagued by allegations of child slavery and other instances of exploitation, it is only a small step towards improving trade between industrialised countries, such as Britain, and less developed nations in Africa, Asia and elsewhere.

As Safia Minney, founder of the fair trade mail order business People Tree, points out: "Fair trade foods are big in the UK. But there's not much in non-food."

On one hand, this represents a clear business opportunity for the clothes, jewellery and other items marketed by Minney and her colleagues. But on the other, it indicates an image problem for ethically produced goods. Traditionally, she acknowledges, buyers of such products have adopted a "hair shirt" approach, buying items because they thought they should rather than because they found them attractive. While there will always be individuals prepared to take that view, it limits the market.

Hence Minney's emphasis on competing with the big brands on design. And, while People Tree is a long way from being a household name, it has enjoyed some success since being launched in Japan seven years ago. The catalogue has 20,000 customers there and sales to about 500 shops, ranging from small New Age concerns to smart department stores have helped boost turnover to about £4m.

"Japan is very design-led. People are not interested unless a product is decently designed and of a certain quality," she explains, adding that Japan's consumers will only be concerned about how something is produced if it looks right first.

Having to meet these exacting criteria has, though, given the company an advantage as it attempts to expand into other countries. With products already tried out on what is arguably the most fashion-conscious market in the world, they can be confident of satisfying customers elsewhere.

The early signs in the UK are encouraging. Sales after two years of little more than word-of-mouth promotion have reached about £250,000 and Minney is looking for a retail unit as well as constantly pursuing opportunities to push the business further into the mainstream.

But getting the product on to the market is only part of the job. Their clothes, accessories and gifts are produced in many different parts of the world, including Nepal, southern India, Africa and Peru, and Minney and her team are constantly visiting the factories to discuss production techniques and quality standards and, above all, to ensure that the people doing the work are being treated properly.

People Tree tends to pay producers about 30 per cent above the market price in acknowledgement of the "real production" involved in making the goods it sells. But, realising that it is selling into a highly competitive market, it seeks to keep prices down through the staff "working hard", says Minney.

Minney, who grew up in England and worked in magazine publishing in London in her twenties, first became interested in the area of fair trade when she went backpacking in the Far East a few years later.

Returning to Britain, she started a marketing consultancy working with non-governmental organisations, such as Friends of the Earth. Then her husband James, a banker, was offered a position in Japan, and she found herself moving to Tokyo and starting to look at environmental issues in Asia.

When Body Shop, one of the world's best-known proponents of ethical trading, opened in Japan, she started work there on the grounds that she is "very much a Body Shop-era kid". And it was because of the questions raised while in this position that 11 years ago she started Global Village. This is an NGO focused on educating people about the environment and fair trade, but it also aims to provide practical advice on such matters as where to go for organic food or how to go about recycling waste.

People Tree was simply a natural progression – from being worried about where goods came from and how they were made to wanting to do something about ensuring at least some of them were produced in a responsible manner.

The operation began at Minney's home with funding and plenty of moral support from her husband and friends. In the beginning, the office staff consisted of just her and a couple of Japanese university students helping out part time. But things developed to such an extent that by the time the company moved into proper commercial premises three years ago, it had taken over much of the home – with her and her husband and their two children effectively living in one room while 17 people filled the others.

Though the London operation is still small – with just four people working out of serviced offices close to Victoria Station – the business as a whole has grown to 36 staff. This enables Minney to concentrate on the creative side – working with designers on new lines, searching for new sources of products – at the same time as developing the business and trying to keep fair trade in the public consciousness, largely through using the catalogues to educate customers about the issues involved.

While both Global Village and People Tree have come a long way, Minney is conscious that they are still small beer compared with the international giants that dominate the clothing and related industries. Moreover, taking the sort of stance they have makes raising funds more difficult. To date, the business has been entirely self-financed and Minney's husband even helps out in his spare time with the accounts and software.

But the company's first fashion show, due to take place at Conway Hall in London's Covent Garden next March, shows that Minney is not about to give up on trying to get the work of the weavers and other craftspeople she so admires into the smartest shops in the world. "It would be nice to find a good environment for products that are beautifully made," she says.

More information: www.ptree.co.uk