Lessons - What Global Supply Chains Don't Want You to Know | Paul Rice - Fair Trade USA CEO

In this lessons episode, discover the dark reality behind most chocolate production, and why child labor remains widespread in West Africa. Learn how fair trade practices can build schools and lift entire communities. Learn why everyday consumer choices have a global impact, and learn how ethical sourcing isn't charity, but simply doing business right. What would be one of the most jarring facts that if somebody knew about non fair trade products, they would never buy them ever again? Because I think that's part of it as well. The company, yes, they're focused on the bottom line, but who represents the bottom line, the consumer? And if the consumer knew X about non fair trade product, they would never get it. What would that thing be? Well, there's been a lot of research and media coverage of child labor in the cocoa industry in West Africa. So about 60% of the global production of cocoa, which is the key ingredient for chocolate, comes from Ivory Coast and Ghana, 60% of the world's production comes from those two countries. And sadly, child labor is rampant. And it's not because parents are evil. It's because they're poor, right? The poverty levels are so great there that people feel compelled, in some cases, to bring their kids to the fields. In other cases, there aren't local schools. And so if you're headed to the fields, what are you going to do with your six-year-old? There's no local school. You're going to leave your six-year-old at home alone all day. No, you bring them to the field and then they end up helping out. So child labor is a real problem and it's rooted in poverty. It's rooted in lack of schools. One of the areas where we've focused a lot of time and attention and other certification labels have as well is in how do we lift those farmers in West Africa out of poverty? And how do we help them get access to education for their kids so that we can overcome the child labor issue? And so one of the things we started working with Hershey a number of years ago and they sourced from that region of Africa. Hershey has a small fair trade program. They're not a hundred percent fair trade. They do other things as well. They work with other certifiers and they're trying to do the right thing. But with the Hershey fair trade program, the first thing that the farmers did with the extra income they got was they started building their own schools in the first country and these countries. Yeah, in Ivory Coast, in the first year, the communities where Hershey was sourcing built 13 schools. Now I'm talking about simple small two-room schoolhouses. But still better than what they had before, which is nothing, I'm assuming. Which is nothing? Yes, exactly, exactly. And so then and the community negotiated with the government and basically said, we'll build the school. You provide the teachers and the government said, okay, we can do that. And so we ended up putting hundreds and hundreds of kids into schools just in the first couple of years. And so, you know, it was a real impact in terms of eliminating the incidents of child labor in those communities. I'm so proud of that. And I'm so proud of the consumer because at the end of the day, the consumer by buying those products was making that possible. I don't know. Have you seen a chocolate product called Bark Thins? I think so. Bark Thins is one of Hershey's brands. That's the brand that we worked with. And, you know, everyone I knew, I mean, that brand was on fire. Everyone I knew was buying Bark Thins. This was like, you know, 10 years ago. And it really made a difference. It made a difference. It kept kids in school. It's so crazy to me. I've had this conversation. I had Scott Harrison from charity water on the show. And obviously, very different business, but same idea. Like the amount of money required to make such an insanely, an insane difference in someone's life overseas is so small. It's such a small amount of money. You incorporate this program, all of a sudden, getting rid of child labor. Now you have access to education. Like overnight, like the whole community is lifted up. And it's not actually like your like to your point. It's not it's not even charity. It's just doing business ethically. That's that's the that's what it's it's not funny. It's actually quite sad that if you just did business away business was supposed to be done, they'd have all these opportunities too. So you're not even fundraising. You're not asking anybody for money just to do business the way that you do business here. Exactly. Yeah. That's exactly right. Yeah. And if you think about it, if you think about it from the perspective of a consumer, you know, there's so much going on in the world right now that has people worried. You know, when when we think about the problems that that we face as a human species right now, in terms of climate change and global poverty and deforestation and the immigration issue and all these issues, I think a lot of us feel like we're powerless. Like these problems are too big and we're too small. And what are we going to do? How can we help? And you know, a lot of people are are really unhappy with politics, you know, whatever side they're on, they're they're unhappy with politics. And so for me, the story of bark thins and the schools that it helped build in West Africa to keep kids out of the fields, that's like the most powerful story of your power in mind as a consumer to make every purchase matter, right? Every time we go to the store, we have a chance, think of it this way, we have a chance to vote with our dollars for a better world, right? By choosing sustainable products, by choosing clear trade products, by choosing reinforced alliance certified products, there's so many products out there that have some kind of environmental impact or social impact on the on the people. And so we really do have a chance to make a difference in the world in in small ways, right? But every time we go to the store and in our listen, companies, they're listening, right? Like that's one of the beauties of capitalism, right? Companies listen to their customers and they respond quickly. And so we go to the store and we buy a certain kind of product, right? Because it makes us feel good because we're having an impact on the world. Companies start doing more of that. And we've seen it. We've seen it over the last now 26 years since I've been, you know, leading Fair Trade USA, we've seen companies that previously didn't really get it or didn't really believe in it. Look at this phenomenon of, you know, what you might call conscious consumerism and go, wow, we don't want to get left behind, we need to get in on that. The one thing that I think feel free to go into this as much as you want. But I think it's an interesting idea. When a company only incorporates Fair Trader, any of these certifications were like a fraction of their total product line. Do people get upset? Do people consider that greenwashing? Like you're trying to ride the wave, but you're not fully committing? What are your thoughts on that? Yeah, it's a great question. And you know, the reality is, perfect is the enemy of the good. I would love to see every company implement some form of ethical sourcing in 100% of their supply chain without a doubt, right? Whether it's Fair Trade or something like it, I would love to see every company embrace that approach and go deep, go all the way. And, you know, in the case of Fair Trade, we are blessed to get to work with amazing companies. You know, we started with Ben and Jerry's ice cream. They went 100% Fair Trade. In our apparel certification program, we, you know, we work with Patagonia. Patagonia is almost 100% Fair Trade. I didn't even realize. Every time I think Fair Trade, I think food. I think food product. The Patagonia is. We're working with Apparel. We're working with Furniture. We just started certifying a company called Vagia for tennis shoes. Yeah. So yeah, we've started to expand beyond food and that's really exciting. But you know, my point is there are definitely what we think of as lighthouse brands, like Ben and Jerry's, like Patagonia and so on, that decide they want to go all the way and really make Fair Trade like the foundation of how they do business, the foundation of how they source products for us. And that obviously is the gold standard, in my view, and what we aspire for all the companies we work with. However, back to your question about what's the business case? If a large company, especially a publicly traded company, and it's kind of beholden to Wall Street, you know, if they want to dip their toe in the water with Fair Trade and experiment and see if it works, of course, we want them to try it. Of course, we want to give them a chance to prove to themselves that Fair Trade is going to be good, not just for the farmers and workers, but also for their business. And so, you know, that does in some sense raise the risk that we might be perceived as, you know, somehow greenwashing those companies. I'll tell you what though, we sign certification agreements with every company that we work with. And today we work with about 2,000 companies in the U.S. from everyone from Whole Foods and Walmart to Costco and Safeway and Trader Joe's and Kroger, all the major retailers. And then great brands, again, like Patagonia and PepsiCo and General Mills and all these cool brands. So in our certification agreement, they agree to run all advertising copy and packaging copy by us before it's approved, right? We get the right to approval. So if a company submitted something to us that looked like it was over representing, like saying, hey, we're a Fair Trade company, when in fact they're only doing a little bit, then, you know, we obviously wouldn't accept that. And so for me, greenwashing is about overclaiming relative to what you're actually doing, right? And we don't see examples of that. Actually, companies are pretty shy about, you know, overclaiming precisely because they don't want to be accused of like not walking the talk. And so here in that sense, for me, the bigger issue is how do we galvanize consumer support to support companies that are launching Fair Trade products so that they can test it. And based on the results of the test, say, hey, this is good for the people. It's good for the planet. It's good for our company. Let's do more. Let me give you one example. We're working with Walmart right now on tomatoes. And Walmart initially launched tomato program. I want to say three years ago. And it was a pilot. And even though it was a small percentage of their total volume, immediately Walmart was the largest purchaser of Fair Trade Tomatoes in the world, right? Of course. And the tomatoes were coming from farms in Mexico. And, you know, Walmart sourced these tomatoes. The farms got certified. Walmart sourced the tomatoes on Fair Trade terms. They paid the premium back to those farm workers. The farm workers invested in really cool community outcomes, health and education. And the label went on the product. And here's the punchline. Sales went up. At Walmart. That's why I'll talk here to a whole foods. I'm talking about Walmart. Sales of Fair Trade products went up over the non-Fair Trade Tomatoes. And so Walmart, seeing the results in on both the farms in terms of the well-being of the workers and then also in terms of the sales, Walmart said, well, this pilot is a success. We're going to do more. And now they're rolling out into other products. They're doing more Fair Trade products. And so, you know, you could come back with the greenwashing question and say, well, why did you let Walmart in with just a small volume? Well, the answer is obvious. You know, they deserved to test the model for themselves and see if it worked. And guess what? It worked and now they're doing more. Thanks for tuning in. If you found this valuable, don't forget to hit that subscribe button so you never miss an episode. And if you want to dive deeper into this conversation, check out the links in the description to watch the full episode. See you in the next one.