Grocery Store Succeeds with Fairtrade, Signs Exclusive Deal

By Jim.Robinson|February 17, 2011

Businesses all over the world have been watching consumers to see whether they are willing to pay premium prices for organic and Fairtrade cotton—and if so, how big of a premium? While that question hasn’t yet been answered conclusively, at least one major grocery store chain is reporting impressive performance in that arena.

Sainsbury’s, the United Kingdom’s third-largest grocery chain, says that sales of Fairtrade goods have increased 27 percent in the last year. The company claims to be the largest retailer of Fairtrade products and says its sales have reached a total of more than $442 million.

To ensure it has a valid supply chain, Sainsbury’s signed an exclusive deal to source all of its Fairtrade cotton from a cooperative supplier in Gujarat, India. Around 1,200 small and marginal farmers based in Gujarat will benefit from this initiative, the company says, allowing greater investment in long-term benefits such as health and education.

“Clothing is a major feature of Sainsbury’s Fairtrade offer and we are proud to be supporting cotton farmers in a way which has not been seen before,” says Liz Jarman, Sainsbury’s head of Fairtrade. “Sainsbury’s sell an average of 250 Fairtrade t-shirts per hour, which means a total Fairtrade premium of $250,000 per year to benefit cotton farmers in Gujarat.”