Consumers’ reactions to involvement of large retailers in selling of fair trade coffee

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Newcastle University


The Fairtrade Labelling International Organisation (FLO) reported recently global sales of Fair Trade (FT) products estimated to reach €1.3 billion in 2009. Certified FT coffee is the leading commodity and estimated to be 0.01 of the international coffee trade. The United Kingdom is among of the major market of the Fair Trade (FT) products with annual growth sales of 33 percent and sales estimated to reach £700 million in 2009, while coffee sales stand at £ 157 million and estimated to be 20 percent of the country coffee business. Recently worldwide expansion of FT with other factors was highly reported to be accelerated with the involvement of large retailers (LRs). Since 2002 when own label of FT products was introduced in the UK, grievances started and many authors criticised the FLO movement of commercialisation by giving LRs licence to use Fairtrade mark, which once were produced by alternatives trading organisations (ATOs). To reach mass market FT products needs LRs distribution channels which many retailers started to stocked FT products e.g The Coop stocked Cafedirect FT coffee since 1994. However, the challenge is on the use of own label and the willingness of the LRs to implement the Fairtrade guiding principles for the benefit of small producers in the South. The purpose of this research is to explore consumers’ reactions to the involvement of large retailers (LRs) in selling FT coffee. Two objectives addressed by the study related to coffee, first understanding factors influencing coffee purchase intention and consumers attitudes to involvement of LRs in selling FT coffee. And two analytical techniques used to analyse data collected in June, 2010 in the high street of Newcastle by face to face interviews. (1) Factor analysis conducted with sample of 219 coffee consumers to understanding factors influencing purchase decision, (2) Cluster analysis employed to identify customers’ reaction to LRs involvement in selling FT coffee. Factor analysis was employed to identify consumers’ attitudes towards coffee. The study indicates that credence processing attributes are the major factors that influence consumers in the intention of coffee purchasing in the UK. such as ‘ethical’, ‘production techniques and fair trade products’. However, credence process content attributes such as ‘quality’ and decaffeinated coffee are most significant in influencing consumers’ attitudes towards coffee. Second is on cluster analysis, two clusters identified, cluster one is the male ‘ethical consumers’ influenced by retailers image and social responsibilities activities. This group is Findings of the study need to be interpreted with cautions because, there are two major additional factors can change coffee purchase. in favour of LRs to use their own label. Cluster two is female ‘ethical and well being consumers, the group is not favouring LRs to have their own label for fair trade coffee. Interesting findings is that this group is not against the involvement of LRs to sell FT coffee limitations first js-the^ample size is a very limited number of the UK coffee consumers, second is the result based on the evaluation of hypothetical attributes of coffee and any additional factors can change coffee purchase.


Master of Science in International Agriculture and Food Marketing


Consumers’ reactions, Large retailers, Selling fair trade, Coffee, Fair Trade (FT)