Companies keen to kiss green frogs
By Julian Lee | smh.com.au | 16 October
Off the fringe ... Tensie Whelan, chief of the Rainforest Alliance, has seen a shift in corporate attitudes.
Far from retreating from their commitment to sell ethically sourced products, the world's largest packaged goods companies are increasing their investment in the area to gain a marketing edge over rivals.
Kraft, Starbucks, McDonald's, Unilever, and now Mars have all signed deals to ensure some, if not all, of the ingredients in their products meet strict environmental standards, thus allowing them to carry the Green Frog brand.
A decade ago they would have run "screaming in the other direction," said Tensie Whelan, the head of Rainforest Alliance, an organisation based in New York that certifies the plantations, farms and forests that supply the tea leaves, coffee beans, fruit, and wood for furniture and paper.
"I keep waiting to see it drop, but it keeps going up," said Whelan of the growth. In the past year the number of companies signing up to source alliance-certified coffee, for example, has risen 77 per cent to 1441.
"Those companies concerned about market share are seeing this as something that can help them stand out during a very tough time, and they know it is not going away, so they want to get ahead of the competition."
Sales of alliance-certified coffee at McDonald's and Liptons Tea have risen (see box).
By 2020 all the cocoa in Mars brands such as Snickers and M&Ms will come from certified West African plantations.
Elsewhere global sales of Fairtrade-branded products rose 22 per cent to $3.5 billion last year, despite the onset of the recession; more recent data on whether that growth has been sustained is unavailable.
Ms Whelan, the alliance's executive director, said her cause had been helped by the rise of a new generation of younger chief executives who were more sympathetic, as had Al Gore's high-profile climate change campaign.
There is also greater recognition among the business community of the higher risks of poverty, social upheaval and desertification in the developed world that supplies it with raw materials.
And because consumers were angry with the business world because of the financial meltdown, they would no longer tolerate companies overcharging for sustainable products, she said.
She was clear where the responsibility lay. "It's up to business to lead. They tell us what type of potato chip we want, they've taught us how to want all this stuff that we don't really need.
Now they can work on helping us to want the things we should need." Many large companies – particularly Indian and Chinese ones – have yet to sign up.
Whelan said some – she would not name them – had approached the alliance to "do something niche" to improve their image, but she had shown them the door.
But the alliance is not without its critics, among them the Fairtrade organisation, which has warned the alliance to stop its corporate partners from encroaching on its turf by claiming that buying Green Frog products is the same as fair trade.
A forest campaigner with Greenpeace, Grant Rosoman, said the fact that a product was only required to have a minimum of 30 per cent certified coffee to qualify was an issue, as was the "relatively weak environmental standards" for levels of pesticides on its certified farms.
Consumers turning over a new leaf
A sustainable cup of tea or coffee is delivering extra sales to Lipton and McDonald's.
Lipton's owner, Unilever, says since it began sourcing tea from certified plantations in Kenya for its Black Label tea, sales have risen by $4.5 million, equivalent to 40 million extra cups of tea.
The result has "surprised and delighted" Unilever's vice-president of marketing, David McNeil, who says: "We didn't expect much of a blip. We always went into this believing it was the right thing to do ... it wasn't about market share and sales."
He said the company is on track to have the entire supply for its Black Label tea certified by 2015. Mr McNeil says the results are all the more surprising given the initiative began in the depths of the global recession in April.
"There was some scepticism about how a message like this would be received when there are so many other things going on." McDonald's reports like-with-like sales of coffee are up 8 per cent in the year since it made the switch to Rainforest Alliance-certified coffee, which it has promoted heavily.
The marketing director, Helen Farquhar, says an improvement in quality was also a factor. It has been a "successful partnership as well as a successful business initiative".
She cites its introduction as a reason for more frequent return visits by customers.
"People feel better about McDonald's," she says. "They expect McDonald's to do the right thing and they expect us to lead."
First published by Smh.com.au on October 16 2009
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