Fairtrade in Emerging Markets

Scholarly Article

“Fairtrade New Business Model: Taps Markets in the South”

In the article “Fairtrade New Business Model: Taps Markets in the South” by Matthias Altmann, who is part of the Fairtrade Labeling Organizations (FLO), he discusses the change in economic activity in the fairtrade market within developing nations and its future.

With the recession decreasing imports of fairtrade products into developed nations, countries in the fairtrade organization are now looking within their own country or other emerging markets to generate revenue. Growth in the emerging markets has increased due to the economic activity of countries going from agriculture to manufacturing which has boosted trade. Fairtrade Labeling Organizations (also known as FLO) see this as an “opportunity to introduce its international social certification system to consumer markets in the South” because a growing number of emerging market consumers can now afford to buy fair trade products (Matthias, 2010).

In general, FLO categorize developed nations as the North and emerging markets as the South and recognize growth in the Southern markets as a new strategy for producers. Not only is it a new way for producers to export, but it also means a change in the FLO’s business model. When FLO marketed products with fairtrade certification to developed nations, they were meant as a way “to [show] support for disadvantaged producers in the South” but in order to capture the interest of the South, FLO will have to emphasize “quality and safety of domestic products that are certified in accordance with international standards” (Matthias, 2010).

This difference in ideals and sentiments in regards to fairtrade products mean that producers and FLO will have to find a new way to market to consumers. Northern fairtrade consumers feel empowered when they know that they are contributing to the fight against poverty by purchasing fairtrade products. However, Southern fairtrade producers will have to...