Accounting for human impact is central to creating a sustainable supply chain. Consumers have heard terms like “ethically sourced” and “fair trade.” But what does ethically soured coconut milk really mean? What exactly is fair trade coffee? And what are some best practices to share this information with consumers?
Ethical sourcing means purchasing materials or products after considering the methods used to produce them and how it impacts the people and communities involved. In other words, do the suppliers pay fair wages and have good working conditions? Are there unethical practices being used? For example, news stories emerged in 2022 about some companies in the coconut milk industry using forced monkey labor. As a result, many retailers dropped those brands from their shelves due to the risk of being associated with unethical sourcing practices.
The goal of fair trade is to achieve equitable, sustainable trade relationships, particularly in developing countries. The movement tends to focus on commodities, such as bananas, cocoa, and coffee, among others. Suppliers or farmers, often organized in cooperatives, receive at least a minimum price for a portion of their goods, plus a premium, when selling through fair trade, even in times of oversupply. Then, farmers and workers in that cooperative decide how to apply the premium funds for the betterment of the community. For a business to mark their product as fair trade or claim certification, they must apply and submit information about their sourcing and supply chain to a certifying organization. There are several recognized fair trade certifiers that work to ensure that the standards for working conditions, safety, and sustainability are being met. Then, to let consumers know a product is certified, brands can either display fair trade status on their product packaging or provide scannable barcodes, like a Digital Link enabled QR code, so consumers can learn more about how those products are sourced.