Fair Coffee at the Football Game
In the 70s, a youth initiative kicked off the origin of worldwide fair trade today: GEPA was the first German fair trade company ever founded. Rainer Sakic, Head of the Bulk Consumer Department, talks about its beginnings in the one world shops, of moving into supermarkets and the VIP lounges at German football stadiums – demonstrating by example how marketing for fair trade food works.
Interview with Rainer Sakic
GEPA's turnover has risen rapidly over in the past years. In 1982 the company was earning just one million German marks whereas today your fair trade products bring in about 60 million euros a year. How did this boom come about?
Fair trade has not been around that long. The idea initially began in the church youth movement at the beginning of the 70s. They imported the first fair trade products as part of development projects and used these products to draw attention to the relationship between the North and the South. Sales were so successful that the GEPA trade firm was founded in 1975 in cooperation with the Christian churches. Initially the goods were only sold in third world shops and by action groups. By 1989 though, the firm's partners decided that GEPA products should also be available in regular shops. Three years later, sales in grocery stores officially began and turnover through these bulk customers – this also includes everyone who sells coffee as a hot drink, like restaurants or company canteens – was already 1.5 million German marks. Transfair was founded the same year, a certification company that also labels the products of other manufacturers. Since then, recognition of fair trade has steadily increased and it has established itself worldwide. In England the market share is over ten percent, a bit less in Germany.
A large part of the growth can then be traced back to the expansion of the points of sale?
Yes, and of course to the fact the consumer consciousness has changed. The large supermarkets have a wider customer base, so our consumer group has expanded and changed. This almost caused an ideological break with the one world stores who were initially not in favour of this expansion. Personally I have always felt that every gram of coffee we sell helps people in the countries where coffee is grown – and that is what it's all about.
What do you mean by an ideological break? What reservations did the one world shops have?
The one world shops were primarily interested in fair trade to drive the political enlightenment of consumers. They felt the products should be used to raise the awareness of the purchaser to the conditions in the countries of origin. Bach then we still has the impatience of youth; we wanted to drive political change!
One of our first products was Nicaragua coffee. By drinking this coffee exclusively and through donations to opposition groups, we wanted to weaken the Somoza regime in Nicaragua and show solidarity with the opposition there. And when the football World Cup took place in Argentina during the military dictatorship, we at the Darmstadt One World Shop called for a boycott of all Argentinean products in protest. Fair trade products have by in large lost this political function. At the supermarket it is more about a product that differentiates itself from the others on the shelf though good quality and ecological production.
Cooperation with large companies can easily lead to credibility problems with customers too. When the discounter Lidl, for example, introduced fair trade products it caused quite a stir. Where do you think the line needs to be drawn?
The GEPA doesn't just have high ethical expectations of its products; we also demand them from our partners. We completely distance ourselves from discounters like Lidl and Schlecker, since our understanding of fairness does not include taking advantage of workers in Germany. When McDonalds approached us because they wanted to buy our raw coffee, we also refused. There are other firms we really enjoy working with though. By now GEPA products are available in over 5,000 supermarkets in Germany including REWE and Edeka.
But Lidl still sells fair trade products?
Yes, but they are products from other manufacturers. The Transfair certification authority gives the fair trade seal to all products that meet the production guidelines no matter who ultimately ends up selling them. This means Lidl can sell fair trade products from manufacturers who have no problem supplying discounters – but you won't find any GEPA products there. The problem with the seal is that large coffee companies often use it to push others out of the market. Tchibo, for example, practices the same dumping policies with fair trade coffee as with other coffees. They sometimes approach our customers directly with a guarantee to always undercut our prices.
You have been working with bulk customers since 1989. How do you convince a company or restaurant to switch to more expensive GEPA products?
In part we actively approach companies or organisations that might have an affinity for social issues. I turned to the student unions first. I was then able to win over the Schwäbisch Hall building society as our second customer. They have been with us for twenty years now. Generally it is individual people who are won over by our ideas and implement them in their firm. We also profit from mouth-to-mouth propaganda. Henkel, for example, switched to our coffee exclusively and increased turnover from 200 to 450 cups a day because the coffee was so much better. The employee responsible is absolutely thrilled and talks us up to everyone.
Today you can even get GEPA coffee at the football stadium. This doesn't seem like a typical environment for a former one world store product.
Yes, our Café-Si-Bar is very popular in stadiums. The German Football League, the DFB, in Frankfurt has been a GEPA customer since 2003 and asked us if we wanted to be represented by a coffee bar at games. So we developed a flexible bar and have been present in the VIP lounge at all home games for the DFB national team since 2007. Many fans are thrilled with the quality of the coffee, so we continue to acquire new customers. By now other customers have also opened a Café-Si-Bar – Volkswagen, the Marburg Student Union and Henkel – and we set them up at conferences as well.
You say that the market share of fair trade in Germany is still under ten percent. Is there a danger of fair trade remaining a market niche for those with higher incomes?
If you look at the development of the market for organic products in recent years, then you can clearly see fair trade's potential. If it gains a greater share of the market and people's awareness increases, then more will also be prepared to pay a higher price for better quality. But this all takes time. To date the media has hardly reported on fair trade and there have been almost no large advertising campaigns on the issue, so it is passing the masses by. As soon as this changes, a whole different dimension of growth will be possible. But even now consumer consciousness is undergoing gradual but continual change. Globalisation means many people are getting to know the countries that produce our goods and are more sensitised to social issues.
Rainer Sakic has worked at GEPA since 1982 and heads the Bulk Consumer Department. He is one of the Darmstadt One World Store's cofounders.
The interview was conducted by Eva-Maria Verfürth