Where Most Needed

Surely there is little coincidence in a couple of recent stories about Wal-Mart: one from the Washington Post about a contract with a fair trade certified coffee producer in Brazil, the other about a contract with Rocky Mountain Institute, an environmental group, to advise on making its fleet more fuel-efficient.  The Wal-Mart public relations units has been on a war footing since at least last summer ("Wal-Mart's P.R. war" in Salon magazine, August, 2005)

The Post article gives us an insight into Wal-Mart's involvement in fair trade.  As might be expected, what drove this engagement was not altruism but an attempt to get a lower price by eliminating a middleman.  In this case the middleman was Proctor & Gamble, whose Millstone Coffee Mountain Moonlight Fair Trade Certified brand sells for 75 to 90 cents per ounce.  By going direct to a Brazilian distributor, the Sam's Club division is already selling a fair trade certified coffee for 29 cents per ounce.

Working with Wal-Mart in this case is the fair trade certification group TransFair USA (EIN 41-1848081 Form 990).  TransFair USA is an affiliate of Fairtrade Labeling Organizations International (international group, no Form 990), based in Bonn, Germany, which sets standards for small farmers and cooperatives as well as for workers in plantations and factories.  TransFair's brief extends to coffee, cocoa, tea, bananas and other fruits, according to the web site of Global Exchange (EIN 94-3066686 Form 990).  TransFair has a staff of 27 and annual income of about $2.7 million, of which about $2 million comes from fees for certification and education programs. 

Kirsten Miller, executive director of Global Exchange, is quoted in the article: "Wal-Mart is probably the last place in the world that we would recommend anyone shop. That makes it complicated."   Global Exchange, though a larger organization at $4.1 million and staff of 60, only has a small educational project related to fair trade (its main program are educational trips to places like Iran, which we discussed a few weeks ago).   The article also indicates that the Organic Consumers Association (EIN 41-1908341 Form 990) is advising against any purchase from Wal-Mart, fair trade certified or not.  But this organization, with a $900,000 income entirely from contributions and a staff of 13, does not make a living doing fair trade certifications. 

A similar pattern in environmental concerns:  Rocky Mountain Institute (EIN 74-2244146 Form 990) is enthusiastic in its embrace of a contract to improve its fleet fuel economy ("Greening a Giant: RMI Takes on Wal-Mart ... as a Client").  RMI has an income of about $6 million, just under half of which is from fees for consulting, and a staff of 41.

In contrast, the much larger Natural Resources Defense Council (EIN 13-2654926 Form 990) has worked with Wal-Mart on similar issues, but keeps careful watch on public association between the organization and the retailer.   Its income is $57 million, and over 90% of that is from contributions, and a staff of 250.

So Wal-Mart will find charities it can work with: they tend to be small organizations that rely on fee-for-service income. 

One side note:  the author of Sustainablog was quite taken with the notion that Wal-Mart would sell a fair traded coffee, and proposed that he would go out of his way to buy some.  I would encourage him to read the whole Washington Post article, especially the part where it explains how by going direct Wal-Mart is undercutting other fair trade efforts, primarily to get a lower price.  How Wal-Mart.  For fun reference, see the 2003 FastCompany piece "The Wal-Mart You Don't Know," an early article that spells out the effect Wal-Mart has had on its suppliers.  There's a slightly more skeptical take from the Treehugger blog.