The power of Supermarkets

Oxfam International recently launched their report “Ripe for Change”. This is one of the best studies I’ve come over since I started my Direct Trade business soon 8 years ago. I’m a witness of everything that is written in this report. It’s a must read. The report is quite long though, 120 pages, but you can read the first 25 pages summary.

In this study 12 of the most common products where chosen in supermarkets in the US and in Europe. In summary, the report shows that since 1995 producers share of consumer price has decreased 13%, while supermarkets share has increased a bit over 11%. Here’s a good graph illustrating the unequal distribution (click on image for larger scale).

Moreover, the report shows something even more terrifying. Products where women prevail in the workforce, earned 55% of living income in this study, compared to the 71% for men. Just the thought of the fact that there are people working their ass off for products we buy in our supermarket, and then go to bed hungry, makes me so angry. But the fact that women suffer even more, make me furious.

Even if I wish this report didn’t need to be even written, it was very important for me to read it, since it gives me some valuable statistics, that support what I’ve experienced and seen through the years.

I’ve seen how private labels have increased rapidly since I started in 2011. The portfolio of products in Sweden labelled Garant (Axfood), or I Love Eco (ICA) have increased significantly. Food business has become more and more bulk driven. Bulk means that the raw or primary product are bought large volumes, but processing and packing is made in, or closer to the country of destination. This implies that a very little share of the final products value-chain is left in the country of origin. In other words, bulk business takes work opportunities from these countries. Even Fair Trade supply chains are to large extent bulk driven.

I’ve been in contact with the large chains in Sweden and I can testify their priority on their private labels. They can both keep low prices towards end consumer, AND increase their own margins and share of end price. So while we run after discounts, supermarkets increase their share of consumer price, and the one who has to pay the whole thing is the producer. Gah, I get so angry when I think about this.

As a consumer I don’t want to support this. When I enter a supermarket or any web shop, I want to know for sure that the small-scale farmer is earning as minimum a living wage. Preferably more. I also want to know what work opportunities I’ve created with my purchase in the contry of origin. Today, there are no certifikates, that highlight what products are also produced in the country of origin. Do you think there is space for another certifikate in food business? Please share your thoughts!

PS Du som bor i Sverige kan stödja vår inklusiva affärsmodell* genom att köpa våra bonder frukter här: torkad mango, torkad ananas, torkad bananito, torkad physalis. Eller köp en hel låda till förmånligt pris.

Det här är när handel är bättre än bistånd på riktigt!

* Definition: Vi inkluderar i våra produkters värdekedja de som annars tjänar under 8 USD/dagen.