Under the carved wooden arches and the soft glow of the gothic St. John's Lutheran Church in downtown Des Moines, Pastor Rachel Mithelman delivers sermons to about 500 worshipers every weekend on how to live better lives as Christians. She also tells them to buy fair trade coffee and chocolate so that poor farmers around the world are paid a reasonable price for the goods they produce. "We live our lives unjustly in so many avenues, but fair trade is one way to ensure justice, and there is no reason to buy cheap coffee on the backs of poor farmers," says Mithelman. To back up her point, she serves fair trade coffee during the church's fellowship hour. And fair trade chocolate is on sale through a baker's rack display.
It's easy to attribute the popularity of fair trade products in the U.S. to the growing tide of granola-crunching foodies who shop at Whole Foods (WFMI) and carefully allocate their spending to "ethical" products. After all, gourmet industry commentators at the popular Web site Epicurious refer to fair trade as "the new organic." But while that group of buyers is certainly growing, fair trade has some of its most loyal supporters in religious organizations. Pastors like Mithelman, and scores of others in denominations ranging from Catholic to Episcopalian, Mennonite to Methodist, are not only heavily promoting fair trade but investing in companies that walk the fair trade line.
For many church groups, fair trade's principles, ensuring that more of the retail price for a product goes to the small farmer, and less to retail and wholesale giants, align closely with their religious teachings. Currently, fair trade buyers pay farmers an average of about $1.35 for a pound of coffee, compared to about 70¢ a pound that conventional large companies are paying their farmers.
"People who come to church regularly hear the message of spreading God's love—with fair trade there is a tangible way of putting their faith and love into action," says Kattie Somerfeld, fair trade projects coordinator for the Lutheran World Relief, a nonprofit organization based in Baltimore that is also a ministry of the Evangelical Lutheran Church in America. About 3,100 Lutheran congregations around the nation buy fair trade coffee, teas, chocolate, sugar, pecans, and cranberries.
One company benefitting greatly from this religious connection is Equal Exchange, a cooperative based in West Bridgewater, Mass., outside of Boston. About 30% of the company's annual $30 million in sales comes from faith-based churches. Equal Exchange has even established a separate division that handles such orders. The company also gives back a percentage of such sales to religious nonprofit groups.
For each pound of coffee that Presbyterian churches and churchgoers purchase through the project, for instance, Equal Exchange donates 15¢ to the Presbyterian church to support small-farmer projects in coffee-growing regions. In 2007, Presbyterian purchases generated $23,591 for the fund, which is administered by the Presbyterian Hunger Program. Similarly, Lutheran World Relief receives 20¢ for every pound its members buy.
"This program encourages our churchgoers to give back to their church," says Melanie Hardison, program associate for the coffee project at Presbyterian Church USA.
One of Equal Exchange's first investments came as a $50,000 loan in 1994 from the Adrian Dominican Sisters. "We basically told them that this would be a high-risk investment, with low returns and no nonprofit tax write-offs," says Rink Dickinson, president and co-founder of Equal Exchange. "But the Adrian Dominican Sisters were attracted by the impact of our mission."
More recently, Lutheran World Relief invested $280,000 for an 8% stake in Divine Chocolate, a chocolate cooperative that is co-owned by 40,000 cocoa farmers in Ghana. Last year, Lutherans bought a total of $160,000 worth of Divine chocolate.
For many of the faith-based organizations, fair trade is another way to connect younger members with a relevant and modern message at a time when there is a decline in church attendance and churches are closing around the country. The Protestant church, for instance, is guiding its members on how to live green with better buying choices. "When people who are doubtful or cynical see these proactive messages of direct support for these types of programs, they can relate better to the church. It's an upbeat message that they can make a difference," says Hardison.
This evangelical attraction is certainly not lost on corporations like Wal-Mart (WMT). The Bentonville (Ark.)-based company, the largest retailer in the world, has paid close attention to evangelical groups in the past, halting sales of men's magazines such as Maxim and FHM in 2003 over their racy covers of scantily clad women. And last August, Wal-Mart started stocking a full line of faith-based toys, including David and Goliath action figures and Jonah and the Big Fish figurines.
Wal-Mart wouldn't comment on whether religious groups' interest played a role in its fair trade decisions. However, if the company was hoping for an endorsement, several religious groups contacted by BusinessWeek.com said they wouldn't back Wal-Mart's fair trade coffee in their churches.
"We are glad that there are more opportunities for people to shop fair trade and impact more farmers' lives," says Jacqueline DeCarlo, senior program advisor for Catholic Relief Services, which last year sold $2 million worth of fair trade coffee, chocolate, and crafts. "But we want people to aspire to the highest standards, and in this case companies that offer full commitment to fair trade merit our support."