Fair-trade chocolate and brand identity

Yesterday our fearless leader posted an interesting video on Cadbury's fair-trade chocolate initiative. It's something that I've been thinking about for a while, at least since the Financial Times wrote it up last March. As one might suspect, my own take is wrapped up in history and marketing strategy, and since Martin has asked for our perpectives here are mine in a nutshell.

From a corporate identity standpoint, the move is savvy, if not necessary. Cadbury is a company long identified with social benefit--its Quaker founder ostensibly saw cocoa as a positive alternative to alcohol, and for decades the company marketed its products for their health benefits, as evidenced by this 1889 British Medical Journal ad explaining why doctors recommend Cadbury Cocoa. The company is also famous for building Bournville, one of the era's more influential corporate towns, which even today serves as a model of corporate responsibility toward employees and their community.

However, prior to its fair-trade announcement, buzz was building that the company had sacrificed the social dimension of its brands in the pursuit of maximizing profit. Perhaps its most controversial action was cutting a substantial number of British jobs--including at its storied Bournville hub--in favor of outsourcing work outside of the UK. Moreover, although Cadbury had purchased the seemingly ubiquitous organic chocolate brand Green & Black, there was substantial concern that the company was diluting G&B or at best using it to greenwash its other profit-focused business practices.

Cadbury's fair-trade announcement could serve as a means to recoup the reputational losses incurred by the company's conspicuous focus on cutting cost and expanding market-share at the expense of its historic social commitment. This is particularly important in the U.K., where the company appears to be hoping that a focus on an ethical supply chain will distract attention away from its job cutbacks at home.

The effect of this gesture in the marketplace remains to be seen. In the U.S., where Cadbury is generally a tier or two above the everyday chocolates of Hershey and Mars, the move is arguably necessary, as that market has come to be dominated by chocolate with at least pretensions of do-goodery. Morever, Mars itself has recently announced its plans to make its chocolate fair trade and eco-friendly by the year 2020--a move that some say is a sign that Mars is being transformed by its recent purchase of Seeds of Change.

Is Cadbury's action enough? For eco-purists probably not, and some labor advocates would raise questions about not just the depth of its fair-trade practices, but the question of whether ethical practices overseas are just a fig leaf for cutting jobs in the UK. Still, it's a positive move, one whose long-term prospects are enhanced by its alignment with the company's historic values.