Westlake Village, Calif.-based Dole Fresh Fruit Co. has signed an agreement to become the largest importer of Fair Trade-certified bananas and pineapples.
“In the produce side, this is definitely a big deal,” said Hannah Freeman, senior manager for business development for TransFair USA, Oakland, Calif.
TransFair is the only third party certifier of Fair Trade products in the U.S.
“Dole worked hard to make this happen,” Freeman said. “The company was very interested in offering Fair Trade-certified produce.”
Promotions for the new Dole program are in the works.
“Dole will be working closely with TransFair USA on promotions,” said Bil Goldfield, communications manager for Dole Fresh Fruit.
The company began shipping certified bananas from Ecuador and Peru to Sam’s Club stores, a division of Wal-Mart Stores Inc., Bentonville, Ark., in August, he said.
“But we plan to soon offer Fair Trade-certified pineapples as well,” Goldfield said.
The pineapples, from Central and South America, will be organic and conventionally grown, he said.
The only other major importer of Fair Trade-certified bananas is Turbana Corp., Miami, Fla., Freeman said, and bringing Dole into the fold is a milestone for TransFair’s fresh fruit program.
“The real key is it opens up opportunities for major retailers to put together supply chains that work for them across the entire country,” Freeman said. “Working with Dole and Turbana is going to give us the opportunity to service retailers in a more serious way.”
Fair Trade certification requires a portion of the above-market price paid by the importer will go toward sustainable farming, building schools and providing health care. The requirements add paperwork and other burdens on importers and increase the overall cost of imports, but for Dole, offering Fair Trade fruit was a response to market demand, Goldfield said.
“Dole is looking to supply the products that the market is asking for, and this is something that the market and consumers have shown to be of interest to them,” he said.
Dole anticipates the volume of the Fair Trade produce will initially represent a small percentage of the company’s annual volume.
“We expect this program to be similar to the introduction of organic bananas — beginning small and steadily growing,” Goldfield said.
TransFair also sees consumers as the driving force determining the demand for Fair Trade produce.
“If they have the guarantee that the extra nickel or dime per pound is going to go back to farming communities and is going to support such things as sustainable farming, scholarships and health centers, consumers will pay the higher price even in a recession,” Freeman said.
Segment gains strength
Around the globe, more than 16 million cartons of Fair Trade certified bananas were sold in 2008, a 28% increase over 2007, according to TransFair.
The organization is projecting that domestic sales of all Fair Trade products this year will grow by more than 20% over 2008 sales and that the volume of fresh produce will more than double. Those projections translate to about $1.2 million for community development funds from produce sales alone.
Charging higher prices during a recession is a challenging proposition for retailers, Freeman said, but many companies across all products have increased the number of Fair Trade items.
“They know they can’t be the cheapest, so they look for ways to build an aura around their brands,” she said.
Sam’s Club and Whole Foods Market Inc., Austin, Texas, sell the most Fair Trade produce, Freeman said. Getting retailers to agree to carry Fair Trade items also is a challenge for TransFair.
“Once a major retailer signs up, getting the major shippers of major brands on board is much easier,” she said.
Agreements with importers and retailers are the first step in the certification process. The non-profit organization conducts quarterly audits of the supply chain documents from the grower to the importer to the retailer to verify all parties are abiding by the agreements. TransFair also does on-site audits, Freeman said.
Wild Oats Markets was the first retailer to offer Fair Trade-certified bananas and pineapples, from The Oppenheimer Group, Vancouver, British Columbia, in 2004.
Although coffee remains the leading Fair Trade product in the U.S. — the TransFair Web site lists hundreds of coffee importers, roasters, brokers and distributors but only 12 fresh fruit importers and distributors — the list of fresh fruit has grown in recent years, and includes citrus, apples, avocados and tropical fruit. There are four vegetables in the Fair Trade program (two types of peppers, green beans and new potatoes), but no company is importing those items.