Ethical Branding and Fair Trade: Divine Chocolate in US and UK

Introduction to Fair Trade and Ethical Branding

According to Visser, Matten, Pohl, and Tolhurst (2010), fair trade principles and ethical branding are aligned with the sustainability of a corporation's business. Businesses incorporating fair trade principles create a unique selling point for themselves, and as a result consumers are also attracted to these products. Awareness in developed countries regarding food and clothing has increased the usage of fair trade products. Coffee and chocolate are major items attracting focused attention from young and high-income consumers. Consumers in different markets reflect acceptance of fair trade products according to their own demographic and purchasing attributes. Multiple factors influence such decisions, including price, availability, product features, and awareness — the most significant factors influencing fair trade purchasing (Ma, Littrell, & Niehm, 2012). The price of products marketed under the fair trade label is also a notable factor in influencing consumption decisions. Businesses are focusing on creating value for their clients through the adoption of fair trade principles. The case of consumers in the United States and United Kingdom markets is examined here through the lens of the renowned chocolate brand Divine Chocolate, a business focused on creating value for its shareholders by following fair trade principles.

The principles of fair trade and ethical food production have been adopted throughout developed nations. Companies are tilting toward capitalizing on the awareness created within consumer markets. Public awareness is not the only factor necessary for increasing sales and consumption of fair trade products — it also requires adherence to business and marketing strategies followed in other market segments, fair pricing for consumers, and competitive product quality. The quality of the product, along with the applicability of related market features, is essential to facilitating consumer adoption.

Divine Chocolate is one of the leading food businesses in creating community awareness regarding the benefits of using fair trade and ethical products. It has provided customers with a reasonable and competitive pricing strategy, and its product quality is equivalent to that of rival brands. It has not only gained access to developed markets but is also maintaining efforts to create awareness among consumers and distributors. The United Kingdom and United States consumer markets share broadly similar values regarding the consumption of fair trade and ethical product brands.

UK Consumer Attitudes Toward Fair Trade

Various factors influence consumer behaviors and trends. Socioeconomic, educational, and demographic factors are particularly notable in shaping consumer behavior. Food marketing and sales are especially considered a major industry for promoting fair trade among consumers. The increased use of organic and healthy diets is also promoted throughout developed countries. Demographic variables relevant to fair trade in the food industry include gender and attitudes toward ethical food consumption (Wright & McCrea, 2008). The study by De Pelsmacker, Driesen, and Rayp (2005) reveals a significant indicator in terms of consumer attitudes and behaviors toward fair trade products: consumers are reported to pay a slightly higher amount for ethical and fair trade food products. Loureiro and Lotade (2005) confirm these claims, indicating that consumers are receptive to fair trade food products and willing to pay more, though their study did not attempt to measure the magnitude of such response as De Pelsmacker et al. (2005) did.

It can therefore be concluded that customers positively welcome fair trade products; however, when it comes to actual purchasing, price remains an important factor. Consumer research performed by Didier and Lucie (2008) indicates that consumers of fair trade chocolate are willing to pay more for ethically branded products. The research further identifies three consumer clusters represented by incentives tied to the fair trade label. A second important finding is that labels including fair trade information significantly improve brand and product image. Consumers also value taste, texture, and quality of products alongside the fair trade label, confirming the views of earlier researchers with respect to fair trade value.

Hira and Ferrie (2006) highlight the requirements for fair trade products to improve sales, arguing that such products require mainstream status within the food industry across both developing and developed markets. They emphasize the importance of product awareness and availability throughout key markets in order to increase the potential of fair trade sales, and highlight the long-term sustainability potential of fair trade products. Wheeler (2012) supports these suggestions by highlighting government efforts in the United Kingdom that have played a significant role in developing fair trade awareness. The increased awareness in society has influenced the usage of ethical foods over the years, and the increase in consumption of ethical foods is also connected to the perceived value of natural and nutritious food items. Research also found a notable connection between various personal characteristics and the consumption of fair trade food items — specifically education, age, gender, and economic conditions.

The level of awareness is an influential factor for UK consumers regarding fair trade products. A number of consumers benefit from the awareness created in previous years through governmental and community-based programs. Governmental organizations, alongside European standardization bodies and regulatory agencies, are developing laws and norms for minimum acceptability standards for food products. Food products are especially treated as major items of concern in relation to public health and safety (Wheeler, 2012).

Purchasing Fair Trade Chocolate in the UK: Divine Chocolate

The Day Chocolate Company has adopted a mechanism to ensure adherence to fair trade principles. The company is regarded as one of the leading adopters of fair trade cocoa within its production lines. Divine Chocolate is the company's renowned brand, and its marketing actively communicates fair trade features to consumers. The farmers and traders of the cocoa powder used in manufacturing Divine Chocolate receive a fair share in each sale. The adoption of fair trade principles is ensured throughout the supply chain, as the farmers of the cocoa used in production are offered a fair share in the value of the finished product. According to the Fairtrade Foundation (2012), the fair trade minimum price is $2,000 per ton, with an additional $200 per ton premium paid to farmers. The report also indicates that climate change is posing a supply shortage of cocoa, leading to a revised price of $2,300 per ton as of July 2012. The International Cocoa Organization (2012) reports that cocoa prices ranged between $1,361 and $3,730 per ton for the period 2002 to 2012, with the minimum price recorded in May 2004 as a result of the global financial downturn. World cocoa production attained an average annual growth rate of 3.3% during this period.

DeCarlo (2011) and Korgen and Gallagher (2013) both affirm the contributions and operations of Divine Chocolate. The trends for purchasing fair trade products within the United Kingdom have been observed through surveys of shops and stores within the market. Raynolds (2002) also highlights the importance of surveying the market to assess fair trade trends in the United Kingdom. Consumer trends are developing around awareness created throughout the country through government and community efforts. Awareness among female members of society is particularly effective in terms of knowledge about fair trade and consumption of food items. Survey findings reveal that fair trade products are gaining popularity among consumers, and Divine Chocolate is gaining particular popularity among young and female consumers. Gropel (2012) similarly finds that consumers are willing to pay for Divine Chocolate given the benefits associated with fair trade food products. The product is purchased regularly by consumers as an endorsement of the manufacturers' commitment to fair trade principles.

The business is focused on providing a quality-oriented, affordable range of products and creating market awareness through various marketing initiatives. Consumers as well as retailers are provided with assistance to understand key product attributes. The change in consumer buying attitudes is also reflected in the company's evolving production and marketing strategy. Divine Chocolate has become a leading case study of fair trade principles in practice, building a strong ethical brand image within its target market by publicly committing to paying fair prices to its cocoa producers. The research of Britain (2007) also supports these findings.

References

Britain, G. (2007). Fair trade and development: Seventh report of session 2006–07, Vol. 2: Oral and written evidence (Vol. 356). Stationery Office, United Kingdom.

Clarke, N., Barnett, C., Cloke, P., & Malpass, A. (2007). The political rationalities of fair-trade consumption in the United Kingdom. Politics & Society, 35(4), 583–607.

De Pelsmacker, P., Driesen, L., & Rayp, G. (2005). Do consumers care about ethics? Willingness to pay for fair-trade coffee. Journal of Consumer Affairs, 39(2), 363–385.

DeCarlo, J. (2011). Fair trade and how it works. The Rosen Publishing Group.

Didier, T., & Lucie, S. (2008). Measuring consumer's willingness to pay for organic and fair trade products. International Journal of Consumer Studies, 32(5), 479–490.

Doole, I., & Lowe, R. (2008). International marketing strategy: Analysis, development and implementation. Cengage Learning EMEA, United States.

Fairtrade Foundation. (2012). Fairtrade retail prices and producer prices explained. Retrieved from Fairtrade Foundation website.

Gropel, M. (2012). Willingness to pay for fair trade products: Analysis and implications.

Hira, A., & Ferrie, J. (2006). Fair trade: Three key challenges for reaching the mainstream. Journal of Business Ethics, 63(2), 107–118.

International Cocoa Organization. (2012, July). The world cocoa economy: Past and present. London.

Korgen, J. O., & Gallagher, V. A. (2013). The true cost of low prices: The violence of globalization. Orbis Books.

Krier, J. M. (2008). Fair trade 2007: New facts and figures from an ongoing success story. A report on fair trade, 33.

Loureiro, M. L., & Lotade, J. (2005). Do fair trade and eco-labels in coffee wake up the consumer conscience? Ecological Economics, 53(1), 129–138.

Ma, Y. J. (2007). Young consumers' fair trade consumption: Application of the theory of planned behavior to non-food fair trade purchases. ProQuest, United States.

Ma, Y. J., Littrell, M. A., & Niehm, L. (2012). Young female consumers' intentions toward fair trade consumption. International Journal of Retail & Distribution Management, 40(1), 41–63.

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Raynolds, L. T. (2002). Consumer/producer links in fair trade coffee networks. Sociologia Ruralis, 42(4), 404–424.

Rezitis, A. N. (2011). Research topics in agricultural and applied economics (Vol. 2). Bentham Science Publishers, USA.

Visser, W., Matten, D., Pohl, M., & Tolhurst, N. (2010). The A to Z of corporate social responsibility. Wiley, USA.

Wheeler, K. (2012). Fair trade and the citizen-consumer: Shopping for justice? Palgrave Macmillan, United Kingdom.

Wright, S., & McCrea, D. (2008). The handbook of organic and fair trade food marketing. Wiley-Blackwell, UK.

Zezza, A., & Tasciotti, L. (2010). Urban agriculture, poverty, and food security: Empirical evidence from a sample of developing countries. Food Policy, 35(4), 265–273.

Appendix A: Questionnaire

The following closed-ended questions were used in the consumer survey (response options: Strongly Agree / Somewhat Agree):

Q1. I understand the concept and meaning of fair trade products.

Q2. Often I am not sure about the originality of a brand even if it is expensive, since I do not know the unique features or quality of that product.

Q3. Fair trade products are highly sought after due to regular purchase of such products.

Q4. If a fair trade product is needed, I will consider purchasing it.

Q5. Personal integrity is compromised by making a purchase of a fair trade product.

Q6. One has to buy fair trade products to maintain social status, as original brands are very expensive.

Q7. In my opinion, buying fair trade products does not have significant legal implications.

Q8. I am sure I have a moral obligation to use fair trade products.

Q9. Fair trade products provide the same quality as the products of which they are an imitation.

Q10. Purchasing fair trade products is a source of motivation since many benefits are obtained on their purchase.

Q11. There is an element of adventure related to the use of fair trade products.

Q12. Most of my friends have engaged in the purchase of fair trade products.