What are the foundations of the fair-trade movement?
The foundations of the fair-trade movement are built upon the producers, the famers, who everyone who participates in the coffee market relies upon. Their main principles are market access for marginalized producers, sustainable and equitable trading relationships, capacity building and empowerment, and consumer awareness raising and advocacy. These principles are instated to protect the famers from greatly fluctuating prices and the volatility of the product they grow. In many areas of the world, the consumers do not know how their coffee is created, and this ignorance is the basis of the fair-trade movement.
Has Café Direct been successful yet? Why? Which strategic recommendations would you make to CEO Anne McCaig?
In terms of the implementation of the fair-trade movement within Café Direct, Café Direct has been successful in their implementation. As far as letting the consumers know about the reasons Café Direct has a price premium, aside from its gourmet beans, Café Direct is slowly but surely starting that trend. They are already associated with one physical coffee shop that sells coffee made by their beans, and that is the most direct way to promote their cause and the fair-trade movement. We would recommend some form of awareness, possibly using a celebrity, to promote the free-trade foundation of Café Direct. Café Direct could also change from the $1.60 per pound for the producers, to a sliding percentage scale over the market price, so that producers will always be ahead of the market, yet Café Direct can price their beans accordingly.
Which strategic recommendations would you make to the “classic trade” players (especially to large multinational firms such as Nestle or General Foods)?
Eventually, the “classic trade” players will have to create a product that follows their fair-trade movement, but those would be labeled premium brands. Even if they have to take a loss on their...