Business Day (Johannesburg)

South Africa: Pick n Pay Ups LSM Target With Fairtrade

Johannesburg — PICK n Pay, SA's second-largest supermarket chain, yesterday said it plans to stock an increasing number of Fairtrade-certified products.

While the only products certified by the Germany-based Fairtrade organisation that are sold in SA are coffee and wine - for a market worth R5,7m last year, a tiny proportion of the global $3,4bn total - this country is a large producer of Fairtrade products, which have been bought in Europe for about a decade.

Fairtrade-certified goods meet specified labour, remuneration and sustainability standards. Last year, more than 16 000 small-scale farmers and farm workers in SA benefited directly from Fairtrade, the supermarket said.

"With more than 700 store around the country, we will be a key player in the creation of a Fairtrade market in SA," Bronwen Rohland, Pick n Pay's director of sustainable d evelopment, said.

The target market for Fairtrade in this country is the 10%-15% of consumers in the upper income bands of living standards measures (LSM) 7-10, said Fairtrade Label SA's spokeswoman Arianna Baldo said. "We are looking at a population that is concerned about people, that has purchasing power and that is involved in social issues. We estimate this population is about 12,5-million people," Ms Baldo said.

There is a moral argument for sustainable agriculture and improving the conditions of farm workers in agriculture - an industry that has a history of exploitation in this country. It is also a crucial tool for SA's top-end grocers to differentiate themselves from rivals as they try to protect, hold and increase market share.

At its annual results presentation in April, Pick n Pay CEO Nick Badminton said the company wants to "defend and grow leadership" in its LSM 8-10 "heartland".

Rival Woolworths already promotes its sustainability and environmental initiatives, which appeal to the same market.

"Woolworths have a strong organic food focus. The upper end of the income scale is their target market," said John Purchase, CEO of the Pretoria-based Agricultural Business Chamber.

"Pick n Pay also want to play in that market and they're looking for something by which to sell it."


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