Fair-trade business celebrates doing good
Inside Bay Area
Oct 22, 2006
By Eve Mitchell, Business Writer
BERKELEY - CAPITALISM and compassion are thriving side by side at Berkeley-based World of Good, which is bringing fair-trade crafts, jewelry and housewares to stores nationwide.
The for-profit company is bringing handmade products made by more than 5,000 artisans representing more than 150 artisan groups in 35 developing countries to more than 700 natural grocery stores, bookstores and other retailers, including many in the Bay Area.
The artisans are paid a fair-trade price for their goods — a concept that's meant to provide a local living wage. Ten percent of World of Good's profits are then distributed to the company's nonprofit side, which supports economic and social programs to improve the lives of artisans and their families, and building a stronger fair-trade crafts movement in the United States.
Since it was founded two years ago, the number of stores selling World of Good merchandise has grown from 50 to about 750, while the number of employees has increased from two to 40.
During October, which is Fair Trade Month, the company launched a new retail partnership with Wild Oats Markets Inc., a national chain of natural food stores. It also introduced a gift and housewares lines at Wegmans Food Markets Inc., a supermarket chain with stores in the Northeast and Mid-Atlantic area.
Around the corner from its office is World of Good's warehouse, where shelves are filled top to bottom with more than 100,000 items representing about 500 different products from around the world. They range from silk organza placemats hand-woven in Laos to polished bamboo bowls from Vietnam and soapstone bookends from Kenya, along with intricately woven baskets, brightly covered scarves and pencil cups made from candy wrappers. The majority of the items are created by women.
"We live in the world's largest importing nation. When we are buying things, we are literally affecting economies all over the world. The mission of our business is to make it as easy as possible for every consumer in the U.S. to have an ethical choice," said Priya Haji, 36, co-founder and chief executive officer of World of Good.
This year, World of Good's volume of unit sales is expected to be five times that of last year, she said. The company's executive team now includes Bob Lally, co-founder of Emeryville toymaker LeapFrog Enterprises Inc., who recently joined World of Good as its chief financial/chief operating officer. Earlier this year, Suzy Schuman, who also
FAIRIBusiness 2worked at LeapFrog, became World of Good's national sales director.
Haji and Siddharth Sanghvi, 31, director of marketing and technology, are both MBA graduates from the University of California, Berkeley's Haas School of Business who founded the company in February 2004.
"It's the idea of conscious consumerism — people expressing their values in their economic choices," Haji said.
Products imported by World of Good follow fair-trade principles such as paying a fair wage relative to the country of origin and building long-term business relationships as outlined by the Fair Trade Federation, a membership group for North American fair-trade-related businesses.
Currently, there is no certification process for handmade products like there is for fair-trade coffee, which sets a minimum price for growers to receive for their crop. Oakland-based TransFair USA oversees the certification process for fair-trade certified coffee sold in the United States.
Oakland-based Cost Plus Inc., which operates 274 stores in 34 states, is not a federation member. Still, the retailer of imported crafts and other products has a practice of paying fair prices to producers, said spokesman Derrick Meyer.
"We do carry a lot of fair-trade items in our stores, like fair-trade coffee. It's something that the company as a whole has integrated within our culture to pay that fair price," he said. "Whether we are part of an organization or not, it's part of the company's mantra and thinking."
The amount of money paid to artisans who create a product imported by World of Good is linked to how long it takes to make the product and what the daily living wage is in the country of origin, Sanghvi said.
World of Good artisans typically receive about 20 percent of the product's retail price. Small, or micro, interest-free loans are also made to artisan groups to help them buy materials.
"It's a beautiful product, plus consumers feel good knowing (they) made a difference in the artist's life," Sanghvi said.
In the Bay Area, World of Good-distributed products are available at dozens of stores, including Whole Foods, Mollie Stone's and Elephant Pharmacy outlets, in addition to small independent grocers such as Alameda Natural Grocery. Consumers can also go online to http://www.worldofgood.com to shop.
"It sells really well," said Randy Owczarzak, general manager for Alameda Natural Grocery in Alameda. "The stuff is attractive and our customer base tends to be concerned with fair trade. It fits in with our product mix."
While there are other companies that import fair-trade gifts from specific countries, World of Good's approach is to be a one-stop place for consumers and retailers to find products from many countries, Haji said,
Fair-trade products — both food and non-food items — account for only a sliver — 0.01 percent — of the all goods sold worldwide, according to the Fair Trade Federation. But it's a growing sliver.
Total North American sales of handmade fair-trade items, including apparel, went from $48 million in 2001 to $76 million in 2004, according to a report of member sales from the federation, which expects increased demand for fair-trade handmade items in the coming years.
There are indeed some consumers who are willing to pay a premium for fair-trade products, said Anne Brouwer, a partner with Chicago-based retail consultant McMillan/Doolittle LLP. But the sector still has a long way to go before it starts to enter the mainstream marketplace in the way that organic foods have.
"I think one challenge will be that consumers are really not as well informed and don't understand what fair trade means the way they understand organic. This is a concept that may take some time," she said. "Consumers can feel one way but may make a different decision when it comes to dollars and cents."
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