Robin Roth needs an ally to transform Traidcraft from fair trade pioneer to trendsetter

Robin Roth, who over the past seven years was CEO of ethical trade company GEPA, succesfully transformed the German alternative trading organization from pioneer to trendsetter. Today, GEPA is Europe’s biggest Fair Trade Company with an annual turnover of around 68 million EUR (2014/15). In my opinion he’s totally up to the job to make Traidcraft a leading Fair Trade player again. But he definitely needs a good ally.

Such an ally might be “a forty-something blogger living in Gateshead”. He appears to be a former director and life-long supporter of Traidcraft and blogged thoughtfully (and extensively) about where the priorities need to be for Traidcraft’s New CEO. He points out the challenges – with five charts across four themes – that the new Traidcraft CEO needs to face head on, and thus makes essential reading for Robin Roth:

Traidcraft often calls itself a pioneer brand to signify that it has veracity and purpose in its history. Isn’t it time to stop looking backwards and start talking about what Traidcraft will become rather that what it has been? The language of pioneer almost sounds like a spoilt teenager feeling usurped when younger siblings start taking the limelight. Time to forget what others are doing and focus on what make will make Traidcraft distinctive tomorrow.

Here’s how Roth transformed GEPA into the avant-garde of the Fair Trade movement:

1. GEPA stopped using the Fairtrade label for most of its products and still has noted a constant increase of sales. GEPA sees the new Guarantee System of WFTO as a big step forward. Roth branded GEPA as ” fair + “, the most important Fair Trade brand in Germany and a leading fair trade supplier in Europe.

2. In 2011 GEPA launched the first chocolates with Fair Trade milk from Germany’s Bavarian Alps. In 2014 they have included Fair Trade grain from Italy.

3. GEPA have physical traceability for all their products and don’t apply the contested concept of mass balance anymore.

4. The GEPA-Qualitätszuschlag is GEPA’s unique quality premium. An additional sum, alongside the Fairtrade premium and Organic premium, ensures farmers invest in improving the quality of their crops.

6. GEPA makes no secret of the cost structure of its main product groups, which – again – is unique. GEPA understood that the withholding of such key information would make its ” fair + ” minded consumers suspicious.

7. GEPA invested heavily in a GEPA Fair Trade Online Shop.

8. Late 2014 GEPA received the “German Sustainability Award 2014” in the category “Germany’s most Sustainable Brand”. The jury praised GEPA’s “consistent and decade long pursue to position their brand, their dedicated holistic approach to brand management and the excellent effect and reception of the GEPA brand compared to the company’s size.”

Some closing remarks from the forty-something bloke living in Gateshead:

I think the business suffers from shareholders who have not driven harder for profits. Within the alternative trade sector, profits are sometimes seen as a dirty word – but a modest profit is key to long term sustainability. In fact, what does it say about fair TRADE if we are trading out of charity rather than to make a fair profit for everyone in the supply chain?

Lack of shareholder pressure to receive even a 2% dividend means that other issues become priorities […]

[…] no profits and your hands become tied over what you can do going forward.

[…] you will see a direct correlation between Traidcraft profits and purchases. The more Traidcraft makes, the better it is for producers.

Profits are crucial to fair returns for those who provide the businesses capital, bigger orders for producers and an even better story to other businesses that a fair business is still a profitable business. So time to set realistic profit targets for the next few years and actually hit them.

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