Credibility costs. Just ask, PepsiCo, which makes Naked Coconut Water, the first beverage to be made with coconuts that are newly Fair Trade Certified.
Few claims on a package lend more assurance to a certain kind of consumer than the words: “Fair Trade Certified.” And at a time when Whole Foods, the chief route to market for many coconut water companies, has asked them to more closely monitor their route to market over working conditions, the issue has become one of bottom line sensibility as well as morals. Naked is just one of several coconut product companies taking advantage of the new certification.
Long overseeing the transactions of sugar, cocoa and coffee, among other widely-transported ingredients, Fair Trade USA announced last week that it has launched the coconut certification.
“We are proud to offer Fair Trade Certified coconut products to create new economic opportunities for coconut growers across the globe,” Nora Pittenger, Fair Trade USA’s senior manager for consumer packaged goods, said in a release. “With demand for coconuts on the rise, Fair Trade USA is empowering consumers and businesses to choose products that not only taste good, but also do good.”
In the release, Fair Trade USA notes that despite the booming interest in coconuts, the producers are often receiving unfair compensation. For example, 60 percent of coconut farmers in the Philippines live in poverty, according to the release.
Below are a few other reasons that the organization noted for launching a coconut certification program:
Coconut farmers are among the poorest people in already impoverished countries such as Indonesia and the Philippines.
In the U.S., the average serving of coconut water sells for $1.50. However, farmers receive about 12 to 25 cents per nut. A farmer earns anywhere from $72 to $7,000 per year.
As coconut trees age, their inefficiency increases the costs of maintaining and harvesting coconuts.
Coconuts are typically grown as a mono-crop, which can hamper crop diversity, harm the environment and pose risks to the farmer.
The Fair Trade standards monitor child and forced labor, working conditions, water conservation and proper waste disposal. The organization also provides farmers with an additional 10 percent premium for each coconut sold, according to the release, which can be used for healthcare, education, agricultural training and business development.
While Naked Coconut Water, available at Whole Foods and Safeway, has kicked things off in the beverage industry, the release notes that Coco Libre Protein Coconut Waters will soon follow.
While certification allows coconut water companies to use their Fair Trade designation for marketing purposes, other companies would argue that their concerns for producers is already apparent, sans certification costs. Harmless Harvest, for example, uses coconuts that are sourced from small ecofarms, according to its website.
Whether or not Harmless Harvest products would pass the certification test, the launch of this certification program introduces a potential challenge for startups and younger companies. If you’ve recently launched a coconut water brand and need to use your already meager funds for production and marketing, can you afford to pay Fair Trade USA for the certification? The organization charges a varying fee based on quarterly sales of the product in question.
The recent auditing requests by Whole Foods have heightened the relevance of the dilemma. On Dec. 31, Errol Schweizer, Whole Foods’ global grocery coordinator, informed the company’s coconut water vendors of their need to be certified by agencies that have been pre-qualified for social responsibility audits.