The Fairtrade Kit Kat: More than just a Nestle marketing strategy?

For chocolate lovers with a taste for fairtrade 2009 has certainly been an exciting year.  The food industry is awash with rumours that confectionary giant Nestle are in talks with The Fairtrade Foundation in order to make the Kit Kat certified fairtrade.

The talks come hot on the heels of news earlier this year that Cadbury’s Dairy Milk had earned fairtrade certification – a breakthrough for the company which coincided with the upgrade of Cadbury’s hot chocolate to fairtrade too.  The new certification also marked the first anniversary of the Cadbury Cocoa Partnership (CCP), which sees a 10 year plan worth £45 million to improve the livelihood of cocoa manufacturers in Ghana, India, Indonesia and the Caribbean.

The prospect of Britain’s best-selling chocolate bar going fairtrade is an intriguing one, and sees Nestle, a company which has been surrounded by criticism of dubious ethical practices in the past, making what some critics may like to call ‘a leap onto the fairtrade bandwagon’. 

So is the move merely a late attempt for a food giant to re-align itself with the ethical fairtrade brands such as Divine and the Organic Seed & Bean Company?  Or is it more than just a marketing campaign?

From Nestle’s point of view the move may be overdue, but it also appears to be part of a bigger company change to bring its practices in line with other 21^st Century businesses eager to give their suppliers a fairer deal.  The decision to make the Kit Kat (their flagship product which saw sales increase by 20 percent earlier in the year) fairtrade does appear to be of utmost significance – and if it goes through will see the Fairtrade logo reach a wider audience than it has ever done so before. 

Additional reports also identified that the company is developing its own ‘sustainability initiatives’ similar to those of Cadbury and the CCP where $109 million is earmarked to be spent in the third world – a portion of which is going towards disease-resistant cocoa plants for producers (according to FoodBizDaily.com).  The company has also announced that it aims to be using only sustainable palm oil by 2015.

However, with further focus on how Cadbury has faired since the rollout of its new ethical stance recently, it is no wonder that Nestle is being seen to follow their footsteps – and a fairtrade Kit Kat may be seen to up the ethical ante once more within the industry.  There is also the complex matter of whether Cadbury and Hershey’s manage to strike up a deal.  If they do so, Reuters sources speculate that Cadbury’s increasing dominance in the market may be something of a threat to Nestle – one that might result in the company wrestling back the U.S. distribution rights of Kit Kat, which has been in the hands of Hershey’s since the 70s.

With this in mind, the fairtrade Kit Kat will no doubt be a huge step in the right direction for Nestle as they strive to keep up with other ethically minded chocolate manufacturers.  As for the industry as a whole, the most important change is likely to be felt by cocoa manufacturers.  Cadbury’s moves to make five Dairy Milk markets (Britain, Ireland, Canada, New Zealand and Australia) fairtrade is set to quadruple the cocoa demand for Ghana in 2010.  The move for Nestle could make the intended beneficiaries of Fair Trade, the indigenous cocoa producers, the real winners.