2014 ALMANAC FA I R T R A D E USA Fair Trade USA has effectively worked to increase the market access, linkage, and impact of responsibly sourced agricultural products for the past 16 years, directly BENEFITTING OVER 1.5 MILLION FARMERS and establishing the Fair Trade Certified™ label as a respected and reliable brand for informed consumer choices. 1 Fair Trade USA 2014 Almanac MISSION & VISION Founded in 1998, Fair Trade USA is the leading 501(c) (3) nonprofit, third-party certifier and promoter of Fair Trade products in North America. Our mission is to enable sustainable development and community empowerment by cultivating a more equitable global trade model that benefits farmers, workers, consumers, industry and the earth. We achieve our mission by empowering producers around the world with the business training, environmental knowledge, and capital investment necessary to create high-quality products that can compete in global markets, and by certifying and promoting Fair Trade products. As demand grows for responsibly sourced goods, there exists an opportunity to bring the benefits of Fair Trade to even more producer groups, to educate consumers, and to create greater market impact. Fair Trade USA has effectively worked to increase the market access, linkage, and impact of responsibly sourced agricultural products for the past 16 years, directly benefitting over 1.5 million farmers and establishing the Fair Trade Certified™ label as a respected and reliable brand for informed consumer choices. What We Do USING TRADE TO ALLEVIATE POVERTY As incentive for implementing sustainable and ethical farming practices, Fair Trade producers earn fair and stable prices for their goods, and are empowered to compete in the global marketplace through direct, long-term contracts with international buyers. This market access helps farming families fight poverty through trade, keeping food on the table, children in school, and families on their land. Farmers and workers are also paid an additional Fair Trade Premium for use on long-term social and business development projects such as healthcare, scholarships, women’s leadership initiatives and microfinance programs, as voted on by the farmers themselves. STANDARDS & CERTIFICATION MEASURING & REPORTING IMPACT Fair Trade USA sets, audits and enforces strict labor and environmental standards, and regularly evaluates them to ensure that they’re providing maximum impact to producers while remaining practical for businesses. Fair Trade USA gathers information from farmers and workers around the world to document the impact that results from participation in Fair Trade. We share this information directly with partners and the public through detailed impact reports, impact stories and social media updates. SUPPLY CHAIN DEVELOPMENT Fair Trade USA connects companies with suppliers and importers of Fair Trade goods. We work with producer organizations to help improve product quality and business acumen, secure financing, and foster the development of business and communication skills. We address supply chain challenges through innovative partnerships with NGOs and industry partners. CONSUMER ACTIVATION We work to build consumer demand by increasing awareness and understanding of Fair Trade. Our skilled communications team generates buzz for Fair Trade and for our brand through collaborative marketing campaigns, events, public relations, social media and educational materials. 2 Fair Trade USA 2014 Almanac Going Deeper with Fair Trade Our Vision We have a vision to dramatically expand impact for farmers, workers, companies and consumers throughout global supply chains. Simply put, we believe that Fair Trade can and must do more. This vision has three pillars that, together, aim to give millions more farmers and workers the tools they need to not only survive, but to thrive: • Strengthening Farming Communities: We are answering the need for improved support services, product quality, and market access and business capacity on behalf of farmers and workers. • Widening the Circle: We are expanding the number of farmers, workers and communities that will benefit from Fair Trade. • Engaging Consumers: We are elevating our consumer activation campaigns to increase market demand for certified products and grow impact for consumers and farmers alike. Certification and Standards Fair Trade USA’s certification standards are guided by four core principles: Empowerment, Economic Viability, Social Progress and Environmental Sustainability. Our certification process verifies criteria in these areas to ensure that quality products are produced in a way that improves lives for farmers and workers, while also protecting the environment. More than just a label, the Fair Trade Certified™ mark is a guarantee backed by a rigorous auditing process. We track transactions along the supply chain between more than 950 companies and more than 500 producer organizations which represent millions of farmers and family members. Farm Audits: Fair Trade USA partners with California-based SCS Global Services, an independent certification company with more than 25 years of experience, for farm audits, certification and standards development. We also recognize certificates from FLO-CERT, the Germany-based, ISO 65-accredited ethical certification program. Desk Audits: Our certification team audits transactions between importers, manufacturers, distributors and the farmer organizations from which they source. In the next few years, Fair Trade USA plans to revitalize the certification model, using technology to embrace new approaches to what information is collected, how it is gathered and how decisions are made. In doing so, we hope to create a scalable system that provides assurance of equity from origin to shelf and minimizes costs. These improvements will be made in tandem with improvements to our standards system. 3 Fair Trade USA 2014 Almanac Strengthening Farming Communities Fair Trade USA has directly invested millions of dollars—as well as additional funds from industry partners, individuals and NGOs—in product quality, market access, business capacity and biodiversity initiatives in Africa, Asia and Latin America. Building on the success of these programs and feedback from key stakeholders, Fair Trade USA has evolved its approach by creating new partnerships with global financial institutions, industry partners, leading social entrepreneurs and in-country service providers. We recognize the unique role Fair Trade USA can play in connecting organizations from all areas of the supply chain to maximize impact for producers. Our supply chain activities: • • • • Increase market opportunity Improve access to capital Expand range of training Extend quality improvement initiatives to improve the lives of farming communities and workers globally Fair Trade Supply Chains in Action Cocoa farmers in the Ivory Coast—the world’s largest cocoa producing country—have long suffered from extreme poverty, sometimes earning less than $1.50 a day for their efforts. Poverty and the absence of schools in many rural communities often force families to take their children with them into the fields. Aging cocoa trees and lack of investment capital have dramatically lowered farm productivity. Concerned about the long-term viability of the global cocoa supply, the Hershey Company turned to Fair Trade USA to help strengthen its supply chain. In 2013 we certified 2,500 farmers in seven cooperatives throughout the Ivory Coast. As part of the certification process, farmers received training on economic, environmental, and social best practices. As a result of certification, these communities were able to earn over $1 million in additional Community Development Premiums that were invested in education, scholarships and supplemental income programs. Through an innovative arrangement with Hershey’s and a private donor, farmers also voted to dedicate 15% of their premiums specifically to on-farm quality and productivity improvements in return for matching investments in training on good farming practices. This leveraged initiative is helping to eliminate child labor, improve working conditions and enhance product quality. At the heart of the Fair Trade model are partnerships that create value for companies while significantly raising living standards for farmers and their families. 4 Fair Trade USA 2014 Almanac Measuring and Driving Impact One of the most unique and critical aspects of our work is the funding we channel back to producers for social, economic and environmental development projects. These Community Development Premiums support projects democratically selected by each producer community—from public health, education, women’s empowerment, and environmentally sustainable farming practices, to business training and infrastructure projects—to improve overall quality of life. As we look to the future it will not be enough for us to simply measure the amount of funding that we channel toward community development projects; rather, we will begin to measure the direct impact these premiums have on farmers, workers and the communities they live in. Fair Trade USA has spent the last two years developing a robust Impact Management System (IMS) to better measure and communicate the impact of Fair Trade purchases. With this new impact data assessment system, Fair Trade USA can offer an unprecedented level of visibility into global agricultural value chains for brands and retailers. The goal of this work is to democratize supply chain data so that companies can see where their products originate and measure the impact of their sourcing. The data collected will enable Fair Trade USA to engage hundreds of additional brands and retailers to source responsibly, which will in turn improve the lives of millions of farming families. Engaging Consumers and Building the Brand Today’s consumer doesn’t just shop for price and quality. Sustainable and responsible products are rapidly gaining in market share across product categories. A growing body of research indicates that consumers want to know more about the food they eat: is it safe, is it healthy, what was the impact on the environment and the farmer? The rapid growth of “Buy Local,” organics, farmers’ markets and Fair Trade illustrates this behavioral shift. A macro-trend is clearly emerging toward more conscious and responsible shopping, pushing industries to seek greater transparency and traceability in their supply chains. Fair Trade helps companies get the transparency needed to tell the full story of products and their impact. Moreover, Fair Trade certification adds value to skeptical consumers who want independent, third-party verification of companies’ claims around sustainability. Finally, the Fair Trade movement gives advocates and activists a meaningful way to get involved, above and beyond the product purchase. These factors are all key to Fair Trade’s success. We intend to support this macro-trend in consumer behavior and ride the rising tide, leading to growth not only for Fair Trade but also for other sustainable products and lifestyle choices. Ultimately, if consumers support these efforts and buy Certified products, Fair Trade impact will grow for both farmers and companies. Fair Trade USA 2014 Almanac By the Numbers 2014 Highlights • 2014 imports of Fair Trade Certified™ produce totaled over 194 million pounds, helping producers earn $5.5 million in premiums. This growth represents a 26% increase in volume of produce imports in 2014. • Coconut is a newly emerging product for Fair Trade USA that has seen immense growth since its launch in 2013. Over $550,000 in Premiums were generated in 2014, representing a staggering 646% growth in additional income to coconut farmers. • The Fair Trade Certified Apparel & Home Goods program has seen unprecedented growth since signing major companies such as West Elm, Patagonia, prAna and PACT. Community Development Premiums grew 225% in 2014 generating more than $215,000 to support factory workers, cotton farmers, and their communities. • In 2014, Fair Trade USA launched its Capture Fisheries Program in an effort to bring the benefits of Fair Trade to smallscale fishermen and their communities. Fair Trade Certified Yellowfin tuna from the Moluccan island chain in Indonesia is now available at Safeway stores in California, the Pacific Northwest and several East Coast regions. 5 6 Fair Trade USA 2014 Almanac All Products: Fair Trade Certified Products in the United States, 1998 - 2014 Year Coffee Tea Cocoa 1998 76,059 1999 2,052,242 2000 4,249,534 2001 6,669,308 65,261 2002 9,747,571 86,706 14,050 2003 19,239,017 95,669 178,888 Produce Sugar Grains Herbs & Spices Flowers Wine Honey Apparel & Home Goods Agave Coconuts 2004 32,974,400 180,310 727,576 8,814,171 2005 44,585,323 490,645 1,036,696 7,384,202 271,680 73,824 26,855 2006 64,774,431 517,386 1,814,391 6,176,907 3,581,563 390,848 309,744 2007 66,339,389 1,008,798 1,951,400 8,030,482 8,657,427 436,456 275,654 650,832 2008 87,772,966 1,142,611 3,847,759 25,492,767 8,696,172 317,652 273,815 9,835,028 257,959 266,385 2009 108,373,041 1,183,141 2,629,411 50,272,722 11,307,547 1,275,805 338,360 9,539,859 1,450,717 250,662 850 2010 105,251,476 1,483,666 4,392,674 51,055,320 18,146,124 1,437,005 530,867 10,489,991 530,446 919,130 15,461 2011 145,406,320 1,759,954 11,255,319 71,515,439 23,703,384 1,134,515 620,591 10,892,094 316,237 333,600 58,483 2012 169,592,542 1,474,805 6,029,942 114,205,154 18,043,079 1,761,027 857,825 8,858,738 99,060 82,826 56,322 2,138,430 2013 155,811,905 1,922,036 23,469,130 155,127,984 10,500,085 3,547,486 1,066,095 10,633,330 113,280 140,216 123,451 1,568,793 6,026,102 2014 167,696,833 2,243,356 33,247,700 194,738,243 10,168,270 2,164,362 1,031,998 11,680,185 64,764 298,196 558,947 2,324,743 51,757,802 Total: 1,190,612,357 13,654,345 90,594,937 692,813,391 113,075,331 12,538,979 5,331,804 72,580,057 2,832,463 2,291,016 813,514 6,031,966 57,783,904 Growth (2013-14) 8% 17% 42% 26% -3% -39% -3% 10% -43% 113% 353% 48% 759% Volume figures in pounds or units. 7 Fair Trade USA 2014 Almanac All Products: Premium Payments to Producer Organizations, 1998 - 2014 Since 1998, Fair Trade producers have earned over $200 million in additional Community Development Premiums! Year Coffee Tea Cocoa Produce Sugar Grains Herbs & Spices Flowers Wine Honey Dried Fruit, Nuts & Oilseeds Apparel & Home Goods Coconuts Total 1998 $3,803 $3,803 1999 $102,612 $102,612 2000 $212,477 $212,477 2001 $333,465 $10,757 2002 $487,379 $30,415 $956 $518,750 2003 $961,951 $43,792 $12,171 $1,017,914 2004 $1,648,720 $62,346 $38,291 $312,156 2005 $2,229,266 $169,823 $130,233 $312,442 $8,383 $781 $7,584 2006 $3,238,722 $212,725 $199,164 $171,956 $124,704 $5,851 $84,835 2007 $4,941,530 $389,210 $132,748 $244,234 $289,683 $6,449 $79,223 $8,125 2008 $8,777,297 $384,679 $261,752 $637,610 $303,891 $5,085 $101,094 $302,835 $19,197 $18,125 2009 $10,837,304 $389,679 $178,871 $1,268,332 $392,763 $29,445 $91,703 $295,352 $114,065 $17,055 $16,961 n/a $13,631,531 2010 $10,525,148 $461,858 $298,875 $1,271,414 $640,041 $51,022 $166,844 $317,698 $38,579 $62,537 $10,616 $3,731 $13,848,362 2011 $18,259,473 $543,605 $1,012,760 $1,786,353 $820,520 $40,962 $199,308 $396,734 $23,881 $30,264 $6,132 $14,322 $23,134,315 2012 $33,021,029 $505,062 $541,345 $2,876,775 $578,132 $159,706 $228,786 $382,550 $6,987 $7,514 $60 $25,891 2013 $31,162,381 $594,135 $2,134,078 $4,192,493 $317,048 $389,234 $269,581 $481,098 $8,364 $12,720 $440 $66,339 2014 $33,539,367 $628,557 $3,016,212 $5,522,675 $327,772 $242,234 $279,163 $525,244 $4,301 $27,052 $2,757 Total: $160,281,922 $4,426,644 $7,957,456 $18,596,440 $3,802,938 $930,769 $1,508,121 $2,709,635 $215,374 $175,268 $36,965 “Growth (2013-14)” 8% 6% 41% 32% 3% -38% 4% 9% -49% 113% 527% $344,222 $2,061,513 $2,858,513 $4,037,956 $6,091,203 $10,811,567 $38,333,835 $73,782 $39,701,693 $215,707 $550,239 $44,881,278 $325,990 $624,021 $201,591,543 225% 646% 8 Fair Trade USA 2014 Almanac Coffee: BY THE NUMBERS Since Fair Trade USA was founded in 1998, coffee imports have surpassed 1 BILLION pounds! We are proud to share that: • Coffee farmers and farm workers earned over $33.5 million in Community Development Premiums in 2014, and import volumes were up about 12 million pounds over 2013. • 44 new coffee business partners joined Fair Trade USA in 2014. As we work toward our next billion pounds, our focus will be on collaboration and innovation to achieve greater shared value for everyone that touches coffee. This also means improving the Fair Trade model to assess how we define and measure impact and its effect on all actors in the coffee supply chain. Going forward, we will stay focused on how many farmers, farm workers and independent smallholders are being positively affected, the impact we are having on these farms, how much individual farmers are earning, and the level of consumer awareness and participation. Percent of Fair Trade Certified Coffee Imports by Country of Origin Indonesia 8% East Timor 3% Other Asia Origins less than 1% Other African Origins 2% Ethiopia 3% Peru 22% Other Latin American Origins 1% Brazil 2% Guatemala 5% Costa Rica 7% Colombia 19% Honduras 8% Nicaragua 9% Mexico 11% 9 Fair Trade USA 2014 Almanac Coffee: Import Volumes and Premium Payments for Fair Trade Certified Coffee Organic 180 Conventional Volume (in Millions of Pounds) 160 140 120 100 80 60 40 20 0 1998 1999 2000 2001 2002 2003 2004 2005 Cumulative Coffee Premiums 2006 2007 2008 2009 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 Annual Coffee Premiums $180 Premium Dollars (in Milliions) $150 $120 $90 $60 $30 $0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 10 Fair Trade USA 2014 Almanac Produce: BY THE NUMBERS Since Fair Trade USA launched produce certification in 2004, farmers and farm workers have earned over $18 million in Community Development Premiums, $5.5 million in 2014 alone! We are proud to share that: • Fair Trade Certified produce from Mexico was the growth leader, with farmers and workers earning $2.4 million in Premiums – nearly $1 million more than in 2013. • 14 new producer organizations became Fair Trade Certified in 2014, with a total of 64 growers now selling Fair Trade Certified fruits and vegetables from nine different countries. • 2014 was also the biggest year yet for Fair Trade Certified flowers, with more than 11.7 million Fair Trade Certified stems imported. • 58% of all Fair Trade Certified produce sold in 2014 was also organic. Looking ahead, we will continue to collaborate with our growers and business partners to bring Fair Trade Certified produce & floral to more consumers, and bring the benefits of Fair Trade to more farmers and workers. Percent of Fair Trade Certified Produce Imports by Country of Origin Peru 5% Other Origins 4% Colombia 12% Mexico 32% Costa Rica 22% Ecuador 25% 11 Fair Trade USA 2014 Almanac Produce: Import Volumes and Premium Payments for Fair Trade Certified Produce Organic 250 Conventional Volume (in Millions of Pounds) 200 150 100 50 0 2004 2005 2006 2007 2008 2009 Cumulative ProducePremiums 2010 2011 2012 2013 2014 2012 2013 2014 Annual ProducePremiums Premium Dollars (in Milliions) $20 $15 $10 $5 $0 2004 2005 2006 2007 2008 2009 2010 2011 12 Fair Trade USA 2014 Almanac Consumer Packaged Goods: Cocoa, Sugar, Tea: BY THE NUMBERS The Consumer Packaged Goods (CPG) program is comprised of many different product categories including grains, sugar, cocoa, honey, tea, wine, spices and more. We are proud to share that: • • • • In 2014 Fair Trade cocoa volumes grew 42%, helping farmers earn over $3 million in Premiums. Over 10 million pounds of Fair Trade Certified sugar were imported into the U.S. in 2014. Coconut farmers in the Philippines earned $550,000 in Premiums. The volume of Fair Trade Certified tea imported into the U.S. was up 17% in 2014. Products with Fair Trade Certified ingredients provide an almost limitless opportunity to expand the benefits and impact of Fair Trade to the lives of farmers and workers. As Fair Trade USA looks to future growth of this category, its focus remains on the people who create the goods we consume. Growing demand for ethically and responsibly sourced goods will undoubtedly bring Fair Trade USA into new product categories, origins and brands as we continue building the Fair Trade movement in 2015 and beyond. Percent of Fair Trade Certified Cocoa Imports by Country of Origin Non-Direct/ Blended Origin 25% Ivory Coast 44% Ecuador 5% Peru 6% Ghana 6% Dominican Republic 14% 13 Fair Trade USA 2014 Almanac CPG: Cocoa Import Volumes and Premium Payments for Fair Trade Certified Cocoa Organic Conventional 35 Volume (in Millions of Pounds) 30 25 20 15 10 5 0 2002 2003 2004 2005 2006 2007 2008 Cumulative Cocoa Premiums 2009 2010 2011 2012 2013 2014 2011 2012 2013 2014 Annual Cocoa Premiums Premium Dollars (in Milliions) $8 $6 $4 $2 $0 2002 2003 2004 2005 2006 2007 2008 2009 2010 14 Fair Trade USA 2014 Almanac CPG: Sugar Import Volumes and Premium Payments for Fair Trade Certified Sugar Volume (in Millions of Pounds) Organic 25 20 15 10 5 0 2005 2006 2007 2008 2009 Cumulative Sugar Premiums Premium Dollars (in Milliions) Conventional 2010 2011 2012 2013 2014 2012 2013 2014 Annual Sugar Premiums $4 $3 $2 $1 $0 2005 2006 2007 2008 2009 2010 2011 Percent of Fair Trade Certified Sugar Imports by Country of Origin Other Origins 2% India 7% Paraguay 48% Belize 43% 15 Fair Trade USA 2014 Almanac CPG: Tea Import Volumes and Premium Payments for Fair Trade Certified Tea Volume (in Millions of Pounds) Organic Conventional 2,500 2,000 1,500 1,000 500 0 2001 2002 2003 2004 2005 2006 2007 Premium Dollars (in Milliions) Cumulative Tea Premiums 2008 2009 2010 2011 2012 2013 2014 Annual Tea Premiums $5 $4 $3 $2 $1 $0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Percent of Fair Trade Certified Tea Imports by Country of Origin Non-Direct / Blended Origins 19% India 41% Sri Lanka 2% Kenya 4% China 34% 2013 2014 16 Fair Trade USA 2014 Almanac Apparel & Home Goods: BY THE NUMBERS The Apparel and Home Goods category, formerly Apparel and Linens, includes manufactured Apparel and Home Goods products as well as cotton and sports balls. We are proud to share that: • In 2014, the number of Fair Trade products made in Fair Trade facilities grew by over 350%. This enabled a dramatic increase in total Premium dollars earned by cotton farmers and factory workers in 4 countries. • In total, cotton farmers earned over $7,000 in Premiums, and factory workers earned over $200,000. These funds were used for important investments in areas like seed cultivation, raincoats, healthcare, bicycles, trainings and more. • • In 2014 we certified 5 new facilities. In total, the Apparel and Home Goods category now covers more than 6,500 factory workers. Percent of Fair Trade Certified Apparel & Home Goods Imports by Country of Origin Ethiopia 5% Pakistan 3% Sri Lanka 17% India 75% 17 Fair Trade USA 2014 Almanac Apparel & Home Goods: Import Volumes and Premium Payments for Fair Trade Certified Apparel & Home Goods Organic Conventional 600 500 Volume (in Units) 400 300 200 100 0 2009 2010 2011 2012 Cumulative Apparel & Home Goods 2013 2014 Annual Apparel & Home Goods Premium Dollars (in Thousands) $350 $300 $250 $200 $150 $100 $50 $0 2010 2011 2012 2013 2014 “I am part of the Fair Trade committee at our workplace. I’m proud that we have such a group to help workers jointly voice their thoughts and work out ways to help each other. I’m happy that fair trade can help my future.” - Mohamed Shabudin, Gaya, Bihar, India. 19 Fair Trade USA 2014 Almanac 2014 Financial Statements: 2014 Revenue ASSETS Current Assets 2013 2014 Cash and cash equivalents 2,351,974 5,664,297 Investments 251,208 - Other assets - 300,000 Service fees receivable 2,335,138 2,651,742 Grants receivable, current 266,033 848,890 Other receivables - 23,740 Prepaid expenses 134,059 90,670 Total Current Assets 5,338,412 9,579,339 Property and equipment, net 133,508 139,034 Deposits 50,475 50,450 Grants receivable, long term Total Assets 352,213 5,522,395 10,121,036 Accounts Payable 242,226 149,885 Accrued Liabilities 1,522,312 585,103 Deferred revenue 12,355 3,110,991 Notes payable, current portion 1,275,000 314,497 Total current liabilities 3,051,893 4,160,476 Notes payable 1,550,000 2,535,503 Accrued lease incentive 358,361 324,993 Total Liabilities 4,960,254 7,020,972 Other 4% In-kind donations 6% Grants & Contributions 27% Service fees,net 62% LIABILITIES AND NET ASSETS Current Liabililities 2014 Expenses Fundraising 8% Net Assets Unrestricted 61,327 1,102,362 Temporarily restrucited 500,814 1,997,702 Total net assets 562,141 3,100,064 Total liabilities and net assets $5,522,395 $10,121,036 Service fees, net 8,996,698 62% Grants and contributions 3,910,765 27% In-kind donations 862,894 6% Other 629,763 4% Total Revenue and Support $14,400,120 General & Administrative 11% 2014 REVENUE AND SUPPORT Revenue & Support Program 81% Expenses Program 9,627,660 81% General and Administrative 1,319,656 11% Fundraising 911,670 8% Total Expenses $11,858,986 2014 Almanac www.FairTradeUSA.org Fair Trade USA 1500 Broadway, Suite 400 Oakland, CA 94612 tel: (510) 663-5260 fax: (510) 663-5264
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