A new Fairtrade cola, made with sugar sourced in Africa, is taking on the world's biggest brand tapping on the rise in "ethical" shopping.

Ubuntu cola, named after the word Bantu meaning humanity or kindness, sells at a premium of 15 per cent above Coca-Cola, but has already reached Sweden's main grocery and convenience stores less than a year after its launch.

It is also available in hundreds of smaller cafes and shops in the UK, Ireland and Norway.

"Our mission is to propel Fairtrade into iconic and mainstream markets," says one of the company founders, Miranda Walker.

The Fairtrade movement was started by activists seeking better prices and working conditions for developing world farmers.

It guarantees a minimum price for their crops and a premium is automatically paid back to the community to fund development. But though the Fairtrade label has grown rapidly in recent years, with global sales surging 47 per cent last year to reach €2.3 billion, according to the Fairtrade Labelling Organisation, most of the available products are simple agricultural goods such as tea, coffee and flowers.

The UK-based Ubuntu Trading Company wants to offer higher value products.

"Most of the products sold under the Fairtrade label in the UK are primary commodities so we see this as a stepchange," says Ms Walker.

The Ubuntu founder faces a significant challenge in entering a market dominated by the global soft drink giant Coca-Cola.

Ms Walker says new cola alternatives arriving on the market will make the route somewhat easier.

The energy drink brand Red Bull has just launched a cola made only with natural ingredients.

Supermarkets also offer own-brand colas. Yet several colas have failed to survive, including Richard Branson's Virgin Cola and ethical brands such as Qibla Cola, a UK firm that donated 10 per cent of its profits to the local community.

A Coca-Cola product

Still, timing could prove crucial to Ubuntu cola's success. The Fairtrade label has begun to gain real sales momentum. "It has really reached a tipping point in the UK in the last year," says Ms Walker.

"The major retailers are behind it. Once you have that power and visibility behind the brand, you know it has made the mainstream." Joanne Denney-Finch, chief executive of retail analysts IGD, told a recent conference that "ethical" shopping, where shoppers select products based on the way they are produced and where, has moved from a niche activity to the mainstream.

As many as seven out of 10 Europeans surveyed by the firm buy ethically at least some of the time, and a quarter are dedicated shoppers, she said.

"There is immense growth potential for brands that can develop and emphasise ethical credentials, and tailor them to local markets at the appropriate time."

Consumer spending on Fairtrade products is expected to more than double over the next five years, according to IGD.

If Ubuntu cola is successful, it will benefit African farmers. It currently buys its sugar - a key ingredient in cola - from co-operatives in Malawi and Zambia.

Business grows

As the business grows, it may source from other countries.

It is also looking for a supplier of Fairtrade caffeine, an ingredient that Kenyan coffee growers could provide in the future. "We'd like to get Fairtrade caffeine included in the product, but the issue is traceability," explains Ms Walker.

When caffeine is extracted from coffee beans, no records are kept to show whether it came from Fairtrade beans or those produced by non-certified growers.

Environmental concerns currently prevent the firm from producing the drink in Africa.

"Cans full of liquid are heavy so it is not cost effective nor environmentally friendly to transport them to Europe," says Ms Walker.

But there could be a franchise model in the future, with bottling at market. "There are good bottling plants in Ethiopia. We have that on our radar."