Tuesday, August 3, 2004

P&G's 'fair trade' java now in stores



By John Nolan
The Associated Press

Procter & Gamble Co. will expand sales of its more expensive coffees from online and telephone orders to supermarkets to benefit impoverished growers as well as the environment.

Some smaller companies already sell in grocery stores their "fair-trade" coffee meant to return more profit to growers. But industry officials say the coffee has yet to catch on with coffee buyers, and major U.S. roasters have resisted pressure from activists to sell it directly to consumers.

Cincinnati-based P&G decided to expand its sales to stores because of increased consumer interest since it started selling the fair-trade and Rainforest Alliance-certified coffees less than a year ago as part of its Millstone gourmet brand, company officials said. P&G would not say how much online and telephone sales have grown.

"We've got a significant opportunity here," said Scott Almquist, Millstone marketing director.

"We want to be on the early stages of that to really lead the future here as we go."

Fair trade activist organizations, including TransFair USA of Oakland, Calif., work with coffee-buying companies to bypass middlemen and return a great percentage of the retail price to growers. Activists say many of those growers are small operators whose financial struggles have worsened in recent years because of a worldwide coffee overproduction that has driven down prices.

The New York-based Rainforest Alliance certifies coffees if inspectors show that growers meet standards for categories including land management, forest protection and pesticide handling, as well as provide living wages, health care and education for coffee plantation workers and their families.

P&G's fair-trade Millstone Organic Mountain Moonlight and the Rainforest Alliance-certified Millstone Rainforest Reserve will be available through supermarkets, mass retailers and drugstores by late September, the company said. A 10-ounce bag will sell for about $7.99, a dollar more than a bag of other Millstone coffees. A 39-ounce bag of P&G's mainstream Folgers coffee typically sells for $4.99.

Activists have lobbied P&G at its annual meetings and through shareholder resolutions to sell more of the coffees.

Industry surveys show increasing interest in fair-trade- and rainforest-certified coffees - which industry officials refer to as "cause-related coffees" - among consumers of premium and specialty blends.

Starbucks Coffee Co. began selling fair trade-certified coffee in 2000 in its stores. Sara Lee Corp., whose brands include Chock Full O' Nuts and Chase & Sanborn, began selling fair-trade coffee to food services and restaurants in 2001.

Some corporations have taken other approaches, including programs to provide better land management and growing techniques to small coffee producers or to build schools or recreational facilities in their communities.

Kraft Foods thinks that programs to help coffee farmers and their communities are the more effective way to ensure long-term production meets market demand, company spokeswoman Pat Riso said.

"Sustainability is about many things. Fair trade is a part of that," Riso said. "But our figures show that consumer demand for the product is quite limited. It's less than 1 percent of the world coffee market."

P&G has started sales of other new products over the Internet before taking them into stores, including Crest White Strips teeth whitening product and Thermacare, a heat wrap, company spokeswoman Tonia Hyatt said.

Now that P&G is selling the specialty coffees directly, it's up to consumers to show their support, said Sister Ruth Rosenbaum, a Roman Catholic nun who leads the Hartford, Conn.-based Center for Reflection, Education and Action. The group, which advocates for adequate coffee worker wages and improved management of coffee-growing lands, has lobbied P&G to sell fair-trade coffee.

"It does cost more, and you have to be willing to pay for it," she said.




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