sell outs

I’ve been thinking a lot recently about small companies with strong ethical frameworks, which sell out to big ones. For instance, Howies sold out to Timberland, Innocent sold out to Coca Cola, Pret A Manger sold out to McDonalds, and Ben and Jerry’s which sold out to Unilever. Of course there were also the chocolate makers Green and Blacks which sold out to Cadburys, and a few years ago Seeds of Change sold out to Mars.

In the first place it makes me wonder if any of these brands were really ethical in the first place, ever really true believers, or in fact whether they were always more concerned with running a profitable enterprise which would provide them with a nice pension.  You might say there’s nothing wrong with that, you might, I wouldnt but you might. However, surely we can agree on the notion that you shouldnt build your brand on the idea of ethics and then cynically sell out when the price is right?

However, as is always the case the issue is not black and white – take for instance the recent change in direction from both Mars and Cadbury who have announced they will be introducing fair trade chocolate into their production this year. More than that Mars are mapping the cacao genome and making the research available freely to speed up the development of more hardy varieties, and even more notably they are committing to fully sustainable sourcing for all their chocolate.

When they took over Seeds of Change Mars took on board the company’s founder, a white bearded gent who looks like a character from a Tintin comic, known as Howard Yana Shapiro. It is he who is credited with leading Mars into this transition.

Certainly outside pressure from groups like Stop the Traffik and the general marketability of sustainable and fair trade as branding buzzwords must have played a big part too, but would they have gone this far without Shapiro’s input?

So perhaps these small ‘ethical’ companies selling out to the big boys isnt such a bad thing, perhaps this is a catalyst for good and needed change. But then again, if that good change is just motivated by the profit margin? Does it mean face value change rather than heart change? And if there is no heart change, will the change last?

I am often conflicted by these things, particularly when it comes to big business. Here’s an example, Shell have just ‘shelled’ out a load of money because of a certain unpleasantness in Nigeria a few years ago – no admission of guilt, plenty of accusations, etc and so on. They are a big bad beast. However, the Shell foundation (their charitable arm) was one of the principal funders of the organic cotton project in India which has led to the growth in organic cotton take up by western brands – its been a major source of positivity and good. People have suggested I talk to them about my plans – such as they are. Can I bring myself to talk to Shell about this, knowing how big and bad they are? Can I bring myself to see my idea fail without their money, knowing how much good it can do? To make things easier for myself, I just procrastinate 🙂

When, if ever, is it appropriate to sell out, and to whom? I heard a cautionary tale on the radio this morning, of a school which was having problems with parents picking their kids up from school late, they began imposing fines upon tardy parents, and guess what? The problem got worse – parents began to see this as an acceptable fee for their misdemeanour.

If there is no moral stigma put on problematic consumption and production, (in other words, if we keep taking the blood money of big brands who are up their neck in misdeeds,) then all these sustainability changes are only ever going to be surface. The true believers are never going to have the last say, and the market will dictate the mood.

The radio program I mentioned was this year’s Reith lecture, which was excellent – and posed questions about how far markets can go without moral and spiritual questions being asked of them. Are there things we should not sell? I am inclined to think yes.

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19 thoughts on “sell outs

  1. Simon, I think I’m correct in saying that rather than cadburys “introducing fair trade chocolate into their production” rather they announced that ALL of their chocolate will be fair trade. Howies is interesting in that Timberland have a) not changed the policy and practise of Howies and b) begun to introduce more fair trade and organic products to their lines… I guess you could look at things the other way round that rather than “selling out” their principles to those of the parent corporation that the small companies are actually changing the big corporations, without who they probably could not survive or have such a significant influence on the market.

    I don’t know, and I’m really just playing “devil’s advocate” but I do wonder if by getting into bed with the big boys they can become the pea under all the bedding which stops the princess from sleeping peacefully! I guess then the question is (to use a different analogy) it better to remain independent and be a small island of purity in a big sea of corruption or should they risk their personal purity to try to have an impact on the sea itself?

    1. Mark,

      so far as I know they are changing their dairy milk bars to fair trade, I doubt the logistics are there for them to convert to 100% fair trade right now.

      I dont think you have a strong argument here, although I all for peeing in the bed of big companies… lol.

      Timberland’s purchase of Howies may or may not be a controlling interest, they havent made it public, but what has it allowed Howies to do? Open shops, something they were umming and ahhing about for a while, David Hiatt said he wouldnt do it because it would take him away from home for too much time at one stage. Perhaps they found a different way.

      Also they have dropped their anti corporate rhetoric, no more digs at American imperialism, becuase now they cant bite the hand that feeds.

      I havent seen any FT product in Timberland, or Howies for that matter, although Timberland have for a while been moving into organic cotton, which is great, but precedes their aquistion of Howies.

      The thing with remaining independent is that for a company like those mentioned (assuming they were in this as idealists in the first place) they have a lot of positive PR, (look at Howies web stats on Alexa, impressive!) and they have the power to be a prophetic irritant. In cahoots with Timberland, they seem to legitimise the big corporate nature of the beast.

      Ditto the others mentioned.

  2. My personal take on this issue is that these truly are ethically driven companies, but ones that have proven to be more successful than most. That success has been noticed by the large corporations who are always looking for revenue/profit streams. “Selling out’ gives the ethical owner a chance to obtain more funding to go on (hopefully) to bigger and better ethical projects, or to stay with the large corporation and try to influence from the inside.
    In the US we’ve just seen Walmart take on Fair Trade coffee for the first time (though Sams had carried it for a while). Does that make Walmart an ethical company? No, of course not. Is it better for the producers than if Walmart made no move towards Fair Trade? Of course it is.
    Success for ethical entrepreneurs inevitably means that large corporations will want to move in on the opportunity. The challenge to these entrepreneurs is to keep raising the bar for all of us.

  3. Actually the cadburys issues is even more complicated than you suggest here – as previously they had resisted the clamour to go fairtrade claiming that they were already paying the farmers more than the fairtrade price for the cocoa. If we accept that as being true, then clearly Cadburys have decided that there is a market to be exploited by going down the fairtrade route.

    Unfortunately I think we’re being duped. First, the primary motive for any multinational is related to profit. Fairtrade has too often been used as a sop to project as a marketing exercise obscuring the truth. Look at the publicity M&S got from introducing fairtrade clothing. More than once I was told that ‘M&S clothes are all now fairtrade’. This is not and has never been true, they stock a small minority of fairtrade lines.

    Second, we have to ask whether the potential benefits of buying premium ethical products are worth it. In actual practice, the financial benefits to the suppliers from buying a fairtrade product are small – they receive a small percentage of the extra cost to the consumer. Yes, this might make a dramatic difference to the farmer, but is it really worth the extra expense, publicity and glamour it generates? Wouldn’t it actually be more ethical to give them the money we’re paying to enable them not to rely on unstable cash crops?

    I think the sell-out issue is part of the same thing. Brands believe they can generate goodwill with relatively small steps – the same thing is happening at the moment with the Mary Portas receiving goods for her up-market charity shops. Nike might get good publicity for donating goods, but this papers over the cracks of the underlying labour issues they’re not addressing.

    We cannot rely on the multinationals to make ethical decisions. Everything they do will be a ruse to encourage us to part with our money and bolster their profit margins – if necessary by feeding us untruths or half truths.

    1. Yes with reservations, the reservations are that I do think there is some value in the fair trade label, which is why i am working on developing fair trade supply chains for one of my clients.
      My perception of this value is not related directly to monetary value, rather to social value. Fair trade should ensure that people who are socially disadvantaged (in poverty, disabled or etc) are empowered and enriched.
      I have friends who run very good ethical companies, and pay very fair wages etc, but dont have recruitment policies which deliberately uplift those in dire circumstances, that is what Fair Trade should do. Perhaps the issue is the name, people immediately associate Fair Trade with fair pay, which isnt exactly the issue.

  4. As I think you’ve shown in your comment, Fairtrade means many things to many different people.

    In clothing, which is what I’ve been working on for four years, you can get two completely different kinds of fairtrade. The first is produced by small co-operatives. The second is produced in large factories by multinationals. The former is mainly sold by non-profits and co-operatives. The latter is mostly sold by multinationals.

    The difference is that the fairtrade foundation marked clothing we see refers only to the cotton used. It is a misconception that it infers superior factory working conditions.

    I’ve been to various kinds of factories in several countries, many of which break the heart. I also appreciate that the cotton supply chain is complicated and holds many in dire poverty. Unfortunately fairtrade makes little difference to the majority of people in this chain in my opinion.

  5. Hey Joe, yes the FT mark does only refer to the seed cotton, however, as you know the whole process has to be certified in order for the garment to carry the mark on the label. Of course I recognise that the standards for FLO certification arent terribly high, they are in fact a minimum especially from the point of view of you and I. But it does provide a platform for companies which are ethically driven (there are a number of examples) to get a trading advantage. This, I think is the helpful aspect of FT, which is mainly used as a marketing tool now.

  6. No, the whole process needs to be registered. This is not a certification process. If the multinational is part of the (voluntary) Ethical Trading Initiative, this is considered enough for the FLO. Indeed, Fairtrade foundation staff actually told me during one meeting that they did not want to get into the business of certifying factories because that would be far too complex and they’re only really interested in the cotton farmer.

    The truth is that for most small ethical businesses, FLO certification is far too expensive and long-winded hence it does not give any trading advantage to those who are really trying to make a difference, working with small factories and not part of the FLO.

    I’m afraid that considering the fairtrade mark to be an ethical guarantee in terms of clothing is laughable. At the most, it implies slightly more money reaches the farmer and that multinationals are submitting regular returns as to the amounts of fairtrade material used and the factories it has been through.

    This leads to the impression that a supermarket fairtrade marked t-shirt is as equally ethical as a traidcraft, bishopston or other truly ethical brand. This is far from being the case and misleads the consumer.

  7. Hi Joe,

    You’re absolutely right to make the difference between registered and certified, well pulled up. And agreed the FT mark on a pair of supermarket boxer shorts means next to nothing, I am in no dispute with you there! However, I know of specific instances where businesses have been given specific uplift by being registered as part of an FLO cert supply chain – it can be of benefit. I’m off to see one such business in a couple of weeks, however, this is also the point, you cant say because someone is registered they are any good – you have to check them thoroughly. I basically agree with you.

  8. Hence I come back to the point that the fairtrade mark is actually not that helpful.

    Radically, perhaps, I don’t think there is any such thing as ethical clothing.

    1. well its certainly something I’ve pondered, but it depends upon your framework of ethics, for instance, hand picked, spun and knitted nettles represent an obvious way to ethically produce your own clothes, from there onwards one has difficulties. Personally I take the approach of not buying anything new, although the garments have inbuilt injustice so to speak, they are at least being recycled.

      1. Agreed – I almost only ever buy clothing from charity shops and we’re working on encouraging more production of clothing from old locally-sourced materials. And encouraging more people to make stuff themselves. Beyond that, you need a flexible understanding of ethical IMO. Even British clothing factories I’ve visited aren’t exactly that great and have minimum wage workers.

        Nettles are being grown commercially in Germany, but my understanding is that they need a particular cultivar to be spun properly – so although there are lots of nettles, they’re not really usable as clothing yarn.

  9. In the US there are two distinct forms of Fair Trade ‘accreditation’.
    Our FLO here is TransfairUsa. Your observations are entirely correct; having Fair Trade certification from Transfair tells you that the growers have been paid a ‘fair’ price as a minimum, but it tells you nothing about any of the members of that supply chain.
    Quite separately to this, companies here can apply to be members of the Fair Trade Federation. Membership of the FTF is strictly screened, and so you can be sure that anyone who is a member has proven themselves to meet the standards laid out by the FTF. YOu can read more about those standards at http://www.fairtradefederation.org. You will see that it is about much more than just price.

    1. Absolutely right, as I mentioned above there is muchio confusion about fairtrade. In the UK the equivalent are the FLO certified raw materials certified by the FLO which use the mark owned by the <a href="http://www.fairtrade.org.uk&quot;Fairtrade Foundation.

      We also have fairtrade products made by fairtrade organisations that belong to the World Fair Trade Organisation, which are primarily small co-operatives.

      Mostly these are not confused because the former certify food materials (and cotton) and the latter handicrafts.

      Unfortunately this does not solve the problem. As I understand it, WFTO membership says nothing about the materials used, and given that they are co-operatives of disadvantaged workers they’re most likely to be using whatever materials are available. Also you are not going to be finding mass produced clothing from a WFTO producer because they only produce smallish runs of clothing. Hence the two systems are actually catering for different markets.

      The sticky mess is further complicated by two factors: some WFTO producers actually do produce FLO certified cotton products and some highly regarded organisations sell uncertified fairtrade foods (especially Traidcraft in the UK).

      Unsurprisingly there are some who are now saying that the system needs to be broken down and started again and many brands who are fed up with the system and have gone for an organic certification, which is a lot more straightforward to understand (and actually in my view is more rigorous regarding factories).

  10. Agreed, especially on the last point. Organic certification can be particularly helpful, but of course takes no regard to the socio political elements.

  11. Well, I’m reasonably confident it was the Global Organic Textile Standard – otherwise it was Control Union’s own equivalent.

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