Japan is appealed more to Fair-Trade Products

Japan is appealed more to Fair-Trade Products

June 9 - 2022

Coffee Geography Magazine

The fair-trade movement came about due to globalization and the rapid development of the market economy. While the huge distribution and procurement networks established thereby have meant consumers in developed countries can enjoy a wide range of products at affordable prices, there are noticeable cases where small-scale producers in developing countries are being undercut.

Consumer interest in sustainable development goals (SDGs) and environmental, social, and governance (ESG) criteria has gradually been increasing and sales of fair-trade household products grew during the COVID-19 pandemic. The estimated Japanese domestic market for 2020 showed that sales of fair-trade household products, including coffee, chocolate, cotton items, and tea, increased. During the pandemic, with more telecommuting and people staying at home “nesting,” momentum spread to buy fair-trade products, such as coffee, that were slightly more expensive but that provided peace of mind.

In 2021, according to calculations by the NPO Fairtrade Label Japan, the estimated Japanese market for fair trade grew by 20% from the previous year to ¥15.8 billion. Through fair trade, checks are carried out on the production and distribution processes, and trade that considers both people and the environment is encouraged. 

It works to prevent declining living standards of producers, child labor, employment that disregards human rights, and environmental destruction. Fairtrade Label Japan explained that by guaranteeing fair prices for producers and paying premiums, it also contributes toward achieving SDG targets. Sales were also boosted by leading retailers such as the AEON Group and Japanese Consumers’ Cooperative Union (Co-op) expanding their range of private brand fair-trade products as part of their SDG and ESG strategies. 

In 2021, the number of companies and corporations with fair-trade certification through Fairtrade Label Japan increased to 243, up 10% from 221 in 2020. Nonetheless, Japan remains a long way behind fair-trade leaders in Europe, where there is heightened interest among both companies and consumers. The estimated market size in 2020 for Germany was ¥237.4 billion, 18 times the size of the ¥13.1 billion Japan market. If fair trade is to become more mainstream in Japan, there needs to be a higher level of awareness and active development by companies to offer relevant products.