Fair Trade and Distribution: The Perils of a Cadbury Sale

Cadbury made waves earlier this year when it announced that it was switching to 100% fairtrade with their Cadbury Dairy Milk products. On Change.org it event produced a petition urging Hershey's to follow their lead. But as that company and Kraft circle with takeover bids, Jeff Trexler points out two big reasons why social entrepreneurs should take note.

First, there is the question of whether the socially-minded approach to sourcing cocoa beans will persist in the hands of someone like Kraft. This question of selling without selling out the social mission is one of the most difficult that social businesses face. Good Capital's Kevin Jones wrote a great piece on this on the Stanford Social Innovation Review. One of the tasks that GoodCap takes on with its investments is to try to bake the social good so deep in the mission and process of the company that it's quite hard to dismantle.

Super insightful as always, however, Trexler points out that the primary reason companies like Kraft are interested is Cadbury's distribution chains that give them access to consumers in places like India. Almost 40% of Cadbury's business comes from emerging markets (vs. 20% for Kraft), in large part because of how they make it easy for small shops and street vendors to sell their goods. Anyone who has been to a place like Egypt probably knows this.

In Trexler's estimation, "the attention being paid to taking emerging-market micro-enterprise to scale is arguably as significant as Cadbury's fair trade initiative vis a vis supply." His point, which I totally agree with, is that we should be keeping track of where "social" enterprise is happening - even if it isn't named as such.

(Photo: Sundeep1106)