The cosmetic and beauty products industry can tap into this dynamic market through Fairtrade labelling and help bring positive change to the lives of marginalised farmers in developing countries who are queuing up to sell more of their crops on fairer terms. By using Fairtrade certified ingredients, manufacturers can help create new opportunities for producers to sell more of existing natural ingredients and their derivatives, plus create the potential to develop new ingredients. Until recently, the estimated 31%1 of British public who would buy Fairtrade cosmetics could not do so because there was no Fairtrade policy that allowed the labelling of finished cosmetic products. However that has all changed. Since May 2009, the Fairtrade Foundation UK Cosmetic and Personal Care Products Policy has made it possible for cosmetic manufacturers to create products sold in the UK that carry the Fairtrade Mark and, for Fairtrade producers from developing countries, to have a share of the five billion personal hygiene items that are sold every year in Europe.2 Since the UK launch in May 2009, eight large, medium and small UK companies are using the Fairtrade Mark on over 120 products incorporating ingredients such as shea butter, cocoa butter, honey, sugar, Brazil nut oil, sesame seed oil, olive oil and apricot kernel oil from 11 Fairtrade certified producer organisations. UK brands such as AKOMA, Boots, Bubble and Balm, Bulldog Men’s Grooming, Essential Care, Lush, Neal’s Yard Remedies and Visionary Soap have launched products including body butters, shower gels, lip balms, body oils, soaps, shaving gels, moisturisers and foot lotions. That is the tip of the iceberg and is far from meeting the demand of the estimated 31% of UK consumers who want to buy Fairtrade cosmetics. Fairtrade aims to improve the situation of farmers and workers at the bottom of supply chains who are at the sharp end of exploitation and injustice in international trade. Many producers in the developing world get their income from crops which are commonly used for beauty and/or food products, however in the conventional market they often have to accept prices below their costs of production and so do not have the ability to meet their families’ most basic needs. Fairtrade sets product standards which include economic, social and environmental criteria. The standards include minimum prices that mean the producer organisation receives an agreed and stable price for their products which covers the cost of sustainable production. If the market price is higher than the Fairtrade minimum price, then traders must pay the market price. An extra sum of money – called the social premium – is also paid to producer organisations and allows them to invest in social and environmental projects that benefit the community, or strengthen their businesses. Producers decide democratically how this should be spent – improvements to health care, clean water supplies, schools, processing facilities – the choice is theirs. Landlocked Burkina Faso, for example, is one of the poorest countries in the world. Ms Yago is a member of the Union of Women Producers of Shea Products of the Sissili and Ziro provinces, a group representing 2,000 women. The group was set up to improve the position of women involved in shea butter production, most of whom are illiterate, and reduce poverty in the villages. Traditional shea butter processing is done by village women who gather, boil and sun-dry the nuts before they are pounded and ground to a paste. The paste is mixed with water to separate the fat, which is then manually churned into creamy butter. Ms Yago says: “When we work together, we can help many people out of poverty. Most importantly, Fairtrade enables us to help ourselves and to support each other. The Fairtrade premium allows us to offer training courses to the women in our group. They learn to write and can see how important it is to have their independence in life. The status of women in our society has now increased.” Around 1.5 million tonnes of ingredients3 are used to make cosmetics sold in Europe. Opening the beauty market to Fairtrade labelling can provide potentially huge market opportunities to both existing certified producers of long standing and well-recognised cosmetic ingredients like shea butter, cocoa butter, olive oil and honey, as well as producers of potential new Fairtrade ingredients (for example beeswax, avocado oil and mango butter). Approximately 250,0004 tonnes of bulk ingredients used in UK cosmetics could include Fairtrade ingredients. Of this amount, approximately 45,000 tonnes (18%) of leave-on type products could potentially use at least 2,200 tonnes of Fairtrade ingredients starting at 5% in the formulation. Approximately 205,000 tonnes (82%) of wash-off type products could potentially use at least 4,100 tonnes of Fairtrade ingredients starting at a minimum of 2% in the formulation.
The Fairtrade Cosmetic and Personal Care Products Policy
Based on extensive research, a formulation policy outlining thresholds content of Fairtrade ingredients for a product to be eligible for Fairtrade labelling has been developed, targeted specifically for the industry. The Fairtrade Cosmetic and Personal Care Policy specifies the minimum requirements that products must at least achieve in order to use the Fairtrade Mark on pack. Full details are published on the website of the Fairtrade Foundation at www.fairtrade.org.uk/products/ beauty_products/default.aspx and www.fairtrade.org.uk/business_services/ product_certification.aspx. Finished products are eligible to carry the Fairtrade Mark once they comply to the policy and the supply chain is fully certified and registered within the Fairtrade system. Currently the policy applies to the UK market but the Fairtrade Foundation are seeking international alignment with Fairtrade Labelling Organisations International for international use.
Formulation levels
The policy considers cosmetics and personal care products divided into two broad product groups (Table 1). The two broad groups of products ensure that the formulation rules are easy to use and apply. The Fairtrade categorisation is slightly different to the EU cosmetic products regulation (EC 1223/2009) in that some products that might be categorised under EU regulations as rinse-off products, such as face masks and scrubs, fall within the leave-on category in the Fairtrade policy because these products can contain higher levels of typical Fairtrade ingredients.
Fairtrade ingredients – the Positive List
To help formulators decide what Fairtrade ingredients they can use, there is a “Positive List” of all Fairtrade ingredients currently available (see Table 3).
All that can be Fairtrade must be Fairtrade
All ingredients in a cosmetic product that can be Fairtrade must be Fairtrade sourced. This is a fundamental principle for all Fairtrade labelled products. If these ingredients or their derivatives are used in a cosmetic product and the ingredient appears on the Fairtrade Positive List then it has to be used, unless there are justifiable technical or logistical reasons why this is not possible.
Supply chains
The supply chain will involve a UK-based importer/distributor who is registered to trade Fairtrade certified ingredients. This includes refining, bleaching and deodorising options for vegetable oils. This approach follows typical distribution channels for the cosmetics industry and, from a purchasing perspective, makes it straightforward to obtain the Fairtrade ingredients. On application, Fairtrade Foundation UK will give details of current suppliers and traders registered to distribute Fairtrade ingredients. The list of approved intermediaries is not exclusive and other companies can also apply to become licensed intermediaries to supply Fairtrade ingredients. In some cases it is also possible to purchase directly from the certified producers in the country of origin.
Increasing the range of Fairtrade ingredients
As well as ingredients like cocoa butter, shea butter and Brazil nut oil, it is possible to manufacture more derivatives from existing Fairtrade starting materials, such as surfactants for use in the high volume wash-off categories. With a 5:1 difference between the potential sales volumes of wash-off and leave-on categories, making more Fairtrade ingredients suitable and available for the wash-off category will give more opportunities to producers. For example, there is an increasing prevalence of specific surfactants on the market made from exotic oils and fats, and hence there is an opportunity for certified exotic oils and fats to be processed to a wide range of derivatives. Once these derivatives are published on the Fairtrade Positive List, then manufacturers will have a greater range of products that they can use to formulate.
Minimum thresholds
All Fairtrade composite product guidelines (food and non food) use minimum threshold criteria for labelling with the Fairtrade mark and this is no different for cosmetic and personal care products. Table 2 shows the minimum levels required for the two categories of product. If you look in the average bathroom, you will find more of the creams, lotions, shampoos and shower gels that are purchased on a regular basis - but these kinds of products generally do not contain high levels of the types of ingredient commonly available from Fairtrade producers. So to maximise the opportunities for producers, the threshold levels have been set to be applicable to the best selling products as well as products that could contain much higher levels of certified ingredients. At the same time it is essential that products meet consumer expectations in terms of performance as well as social and sustainability criteria so that products containing certified ingredients earn the reputation as high quality products that customers want to buy again and again. The labelling and packaging requirements make it clear to consumers which ingredients are Fairtrade and which are not. A good number of products will be able to use higher levels of ingredients. Licensees are expected to use the highest possible levels of certified ingredients and of their derivatives and aim to exceed the minimum requirements. The Positive List of Fairtrade INCI ingredients will help formulators exceed the minimum levels because not only does the Positive List include direct replacements but also it may be possible to substitute one ingredient for another. For example, a product containing grapeseed oil – currently not available as Fairtrade – could be substituted with a certified vegetable oil. There are a number of creative possibilities. There is no minimum number of Fairtrade ingredients that can be used to achieve the threshold. For example, a body cream with 15% Fairtrade could contain one ingredient at 15% or five ingredients between 0.01% and 10% or any other permutation.
Ingredients that cannot be included as Fairtrade ingredients
Floral waters (hydrosols) can not be counted towards the amount of Fairtrade ingredients in a product, even if the Fairtrade starting material such as a herb, spice or flower was obtained from a certified producer organisation. Floral waters are generally low value and it would be too easy to achieve the threshold.
Prohibited and restricted ingredients
Decisions about which ingredients can be used, restricted or prohibited from Fairtrade labelled beauty products are entrusted to the European or national authorities in the country where the finished product is sold. Licensees can decide to apply more stringent requirements according to their own policies provided that these do not contravene applicable legislation. The Fairtrade objective is to ensure that producers benefit as much as possible and setting additional restrictions on the use of certain ingredients beyond what is allowed in law could limit this. This also means that Fairtrade Foundation UK is not responsible for the safety and efficacy of products and overall the licensee must comply with the prevailing legislation.
Use of conversion factors for derivatives
Many certified ingredients that are used in cosmetics are derivatives from the original Fairtrade starting material. Derivatives involve a physical or chemical transformation where the final product either has a smaller or greater weight than the starting material. For example, Fairtrade Brazil nut oil is a derivative of Fairtrade Brazil nuts. The Fairtrade minimum price applies to Brazil nuts and provided that all of the Fairtrade requirements are met, then oil expressed from Fairtrade Brazil nuts is also a certified ingredient. Also, for example, Fairtrade green tea can be used to make a liquid extract that would also be Fairtrade provided that all of the Fairtrade requirements are met. There are two rules for derivatives:
• When the “input” weight of the Fairtrade certified ingredient is more than the “output” weight of the derivative then the actual weight (% w/w) of the derivative used in the product is taken into account in the formulation, not the equivalent weight of original Fairtrade certified ingredient.
In the case of Brazil nut oil expressed from Brazil nuts, the input weight of Brazil nuts is more than the output weight of Brazil nut oil. Therefore if a finished product contains 10% Brazil nut oil then all of the 10% contributes to the overall amount of Fairtrade ingredient in that finished product. The same approach would be used for all oils, essential oils and dehydrated ingredients.
• When the “input” weight of the Fairtrade certified ingredient is less than the “output” weight of the derivative the equivalent weight of the Fairtrade certified ingredient used in the derivative will be taken into account in the formula and not the % weight of the derivative.
In the case of a simple plant extract, if 100 kg of plant material yields 1000 kg of liquid extract then the input weight is less than the output weight. Therefore if a product contains 40% of the liquid extract then the actual Fairtrade percentage is 4% due to the 1:10 extraction ratio. The same type of conversion factor would apply to other liquid extracts and surfactants. Companies need to obtain validated conversion factors from the manufacturers and provide these to the Fairtrade Foundation.
Procedures
Apart from the licensing agreements that must be signed between the Licensee and the Fairtrade Foundation UK, the company has to provide a composition of each product (as contained in the Cosmetic Product Safety Report). All ingredients must be listed by INCI name with percentages for the ingredients and any respective conversion factors. For cosmetics and personal care products, Fairtrade labelling is also conditional on licensees demonstrating a plan of support to producers with the aim to encourage partnership approaches to trading relationships, deeper engagement between buyers and producers and the development of sourcing strategies to help provide market access for marginalised producers. The aim is that companies and producers will benefit from the links and relationship built up with one another, helping to empower and develop each other’s businesses. One example of a plan in progress is from Visionary Soap Company, who is working in partnership with a social enterprise in South Africa to assist them with the production of handmade soaps, providing technical input and linking them with Fairtrade ingredients suppliers to enable them to further develop their production of soaps. Visionary Soap has also committed to further assistance with strengthening the marketing and communications to help promote their soaps.
Looking to the future
There are many more opportunities to increase the range of Fairtrade ingredients and make more products containing them. Table 3 identifies the available ingredients and the potential ingredients that can be made from existing sources of certified raw materials. Currently, for example, the range does not include surfactants or essential oils. Given the importance of these two categories it would be a great achievement to have Fairtrade sources available. With a source of natural alcohol derived from Fairtrade sugar there is also the potential to use this ingredient in fragrances. Added to this, there are the ingredients that are already used in cosmetics that are not yet included in the lists but which could be sourced from Fairtrade producers or derived from Fairtrade ingredients. More certified ingredients mean more potential for Fairtrade labelled products which means more opportunities for producers. However this can only happen with involvement and expertise of the companies along the supply chain. As with any business proposition this will require investment, but with an increasingly ethically aware consumer who is looking to buy Fairtrade certified cosmetics, there has not been a better time to earn an ethical return on that investment. Ultimately, the Fairtrade Foundation UK can only provide a better deal for producers in partnership with the commercial stakeholders who can make the products available on the market and, of course, in partnership with certified producers in developing countries. The Fairtrade Foundation will be pleased to receive enquiries and suggestions from retailers and manufacturers of cosmetic products and suppliers of cosmetic ingredients who would like to get involved in this exciting new Fairtrade category and create Fairtrade certified cosmetics.
References
1 Globescan 2009. 2 COLIPA. 3 These figures are extrapolated from Euromonitor 2005. 4 Based on COLIPA data UK market share is ~17% of EU market. Combined market share for cosmetics in Germany, France and UK is 57% of the EU market. 5 Table 3 is only a guide. Please consult the Formulation Policy and discuss your requirements with the Commercial Relations team: commercial@fairtrade.org.uk">commercial@fairtrade.org.uk">commercial@fairtrade.org.uk">commercial@fairtrade.org.uk