Ethical investment

keeping a keen eye on consumer spending trends and the fact that
Fairtrade-accredited cotton has been available in the UK only since
November.

Clothing is the latest product sector to make fair trade central to its
marketing, which experts predict will expand to new categories.

A report by the Co-operative Bank, published in December, revealed that
sales of ethical clothing in the UK leaped 30% during 2004 to £43m, making it one of the fastest-growing sectors of ethical
consumerism.

Their timing might be similar, but the three retailers are taking
different approaches. Next month, Topshop will launch a small-scale
trial of three fair trade brands made with organic cotton - People Tree,
Hug and Gossypium.

Oasis, meanwhile, has sourced clothing made from organic cotton under
fair trade conditions and will sell it under its Future Organics
sub-brand in 12 stores from April.

M&S is the only retailer to have involved a major certification body, as
the Fairtrade Foundation has backed the launch of its line of T-shirts
and socks, which goes on sale next month.

The leading accreditation system for organic products, the Soil
Association, has yet to give its mark of approval to any cotton clothing
sold by a major brand. Its standards apply not only to the treatment of
cotton in the field, which international organic standards cover, but
also to the production process, making it a far tougher endorsement to
earn.

Differing motives

Although the retailers are looking to capitalise on a small, but
buoyant, segment of the clothing market, they have different reasons for
getting involved.

M&S' main motivation is bolstering its corporate reputation. The fair
trade line forms part of its 'Look behind the label' campaign by Rainey
Kelly Campbell Roalfe/Y&R, which covers a variety of claims the retailer
is making about the quality of its products and their source.

'"Look behind the label" is the first time we have talked about the
lengths to which we go to ensure everything we sell is produced in a
responsible way,' says M&S chief executive Stuart Rose. 'Our customers
increasingly want to know about this, which is why we have decided to
tell them what we stand for.'

Putting its practices forward for public scrutiny in this way was a
significant cultural challenge for M&S, which is not known for
cultivating an open public image. Its advertising required an extensive
process of internal sign-off to ensure that the retailer could live up
to the rigorous standards it was setting itself.

Topshop and Oasis are positioning themselves more simply, as part of a
growing sector. Ethical clothing is a commercial opportunity in that,
although the ranges tend to sell at a premium to comparable
alternatives, consumers are becoming more inclined to back their ethical
values with their wallets.

'It is a revenue generator in the sense that there is clearly demand for
these kinds of products, but we also benefit from being seen to stock
pioneering brands,' says a spokesman for Topshop.

So where will the ethical bandwagon arrive next? There is a limit to the
types of products that can be given Fairtrade status, as accreditation
applies only to those sourced from the Third World.

Ethical wines

Mark Varney, business development manager at the Fairtrade Foundation,
reports that, other than an expansion in the range of certified
vegetables on offer, wine is likely to be the next sector in which there
is a significant increase in brands adopting fair trade standards.

Although wine from French or Californian vineyards would not qualify,
Chilean and South African brands are starting to investigate the
marketing benefits of fair trade as they seek to be more
competitive.

Chilean brand Los Robles saw sales double after gaining accreditation
from the Fairtrade Foundation, while Kumala, a wine made from grapes
harvested from South African vineyards, is considering altering its
sourcing practices in accordance with fair trade guidelines.

In addition, Australian wine Banrock Station has shown that business can
be boosted by trading on environmentally-friendly cultivation
methods.

Varney says the food service sector has also been bringing in fair trade
products - the only coffee now available at Benjy's, AMT Coffee and Slug
& Lettuce pubs, for example, is fair trade.

One of the fastest-growing areas of the Fairtrade Foundation's work
involves products that are partially accredited, reflecting the fact
that one or more ingredients has been bought under fair trade
conditions.

It is possible to identify sectors in which brands will develop ethical
offerings by studying the detail of the Co-operative Bank research. UK
sales for tour operators with ethical travel policies, such as Intrepid
Travel, rose 21.7% in 2004 to £112m, while sales of free-range
eggs increased by 14.4% to £215m, and the value of the ethical
investment products market soared 30.9%.

With such mainstream retailers as M&S and Topshop now coming on board,
no doubt fair trade goods' proportion of total sales will soar even
further in the years to come.

DATA FILE - ETHICAL CONSUMERISM IN THE UK

Spend 2003 Spend 2004
(pounds m) (pounds m)
Food 3765 4047
Green home 1984 2567
Travel and transport 1521 1644
Clothing/cosmetics/charity donations 6061 6924
Ethical finance 9027 10,626

Source: The Co-operative Bank/New Economics Foundation/The Future
Foundation