Fairtrade Consumers and " Global South " Producers Supply Chain

Fairtrade supply chains lack information linking commodity producers with fairtrade shopper behaviour. This paper aims to show how supermarket loyalty card data of over 1.7 million shoppers can be analysed using paired-samples t-test analysis to objectively profile the fairtrade shopper and address its supply chain management implications. The paper demonstrates the huge marketing potential that segmentation based on actual behaviour brings to supply chain management. The results show that global south producers have more incentive to adopt a supply chain orientation by understanding the characteristics of fairtrade shoppers that drive consumer satisfaction and repeat buying behaviour. Introduction The fairtrade success story has featured prominently the fairtrade shopper as the key factor driving the exponential growth in retail sales (Nicholls and Opal, 2008 and Bowes, 2011). Massive increase in the variety of fairtrade products on the market within the past two decades has been reported (Davies, 2007, Fairtrade Foundation UK Reports, 2006 2010). However, there is limited understanding on the characteristics of the fairtrade shopper (Nicholls and Opal, 2008). Further, there is no published research linking fairtrade commodity producers in the global south with shopper characteristics and consumer behaviour to enable them to adopt a value addition orientation. Perhaps, where commodities producers in developing countries are typically characterised by small producers who tend to focus on production rather than marketing (Wood et al., 1994), value chain management approaches are not even considered. This underscores the need to investigate the attributes of the fairtrade shopper, as it could provide first line information for fairtrade supply chain partners, especially commodity producers in developing countries to consider any value addition operation. The aim of the paper is to identify fairtrade shopper characteristics and address the supply chain management implications that potentially could aid value addition. The paper also demonstrates how actual behaviour data can provide a more comprehensive and reliable attributes of the fairtrade shopper for effective target marketing, as opposed to using claimed/reported behaviour to profile shoppers. It also seeks to contribute to the extant fairtrade and supply chain literature as it espouses a novel approach to profile the fairtrade shopper post mainstreaming on the basis of actual behaviour data. The paper is structured into four sections. The next section covers the background to the research, including an overview of the extant literature on fairtrade market segmentation and profile. Theoretical framework and the research hypotheses are then presented. This is followed by the research methodology, data description, statement of findings and discussions. Conclusions drawn and implications for the global south producer and supply chain management are presented, followed by research limitations and areas for further research. Fairtrade According to Nicholls and Opal (2008) the fairtrade concept represents a redefinition of profitable transactions encompassing and empowering all key stakeholders and offers a range of benefits unavailable from traditional business models. It is described as a consumer-driven phenomenon, underpinned by growth of ‘ethical’ consumption that translates into better prices, decent working conditions, local sustainability, and fair terms of trade for farmers and farm workers in the developing world (Fairtrade Foundation, 2009). Ultimately, it aims to maximize returns to the supplier than the profit of the buyer or manufacturer, and this is achieved within an agreed developmental framework (see Barratt Brown 1993, Strong 1996, Nicholls 2002 and Jones et al., 2008). The fairtrade market has seen significant growth across Europe, North America and Japan over the past decade (Nicholls and Opal 2008 and Fairtrade Foundation UK, 2006-2010). Global retail sales of fairtrade certified