Making History TransFair USA, Annual Report 2009 About Us

TransFair USA is a nonprofit, mission-driven organization that tackles social and environmental sustainability with an innovative, entrepreneurial approach. We are the leading independent, third-party certifier of Fair Trade products in the United States, and the only U.S. member of Fairtrade Labelling Organizations International (FLO).

We license companies to display the Fair Trade Certified™ label on products that meet our strict international standards. These standards foster increased social and economic stability, lead- ing to stronger communities and better stewardship of the planet. Our goal is to dramatically improve the livelihoods of farmers, workers and their families around the world.

Our Mission

TransFair USA enables sustainable development and community empowerment by cultivating a more equitable global trade model that benefits farmers, workers, consumers, industry and the earth. We achieve this mission by certifying and promoting Fair Trade products.

Letter from the President & CEO Contents Dear Friends, 04 2009 Accomplishments In 2009, the Fair Trade movement In 2009, we certified over 100 million As we move forward, we have renewed ushered in a new era. Our eleventh year pounds of coffee for the first time, more hope for economic recovery and of certifying Fair Trade products saw than was certified in our first seven continued growth in sales of Fair 06 Fair Trade Certified Apparel social consciousness emerge as a top years of business combined. We saw Trade products. This next phase of priority for consumers, and the numbers opportunities for farm workers broaden Fair Trade is just beginning, and the 08 Social Sustainability reflected it. Yet in many ways it was as we expanded from fewer than 30 Fair accomplishments of 2009, though the first year forward after a decade Trade product categories to more than monumental in their own right, are 12 Community Empowerment of gathering valuable experience. 100. As this expansion occurred, we saw but a small step towards the ultimate Throughout the country and throughout schools and clinics being built, farmers goal of alleviating poverty through a 22 Environmental Sustainability the world, the feeling that 2009 marked learning new methods of production, revolutionary economic model. a new beginning was palpable. A sea and women armed with pride and 24 Building the Movement change seemed to be occurring in the leadership skills. We watched children Sincerely, way people saw their place on the planet, proudly take their first steps down and Fair Trade was ready for the world newly paved roads to schools where 28 Industry Momentum to turn our way as people embraced the they would encounter opportunities concepts of environmental, economic that their parents would never have 32 Fair Trade Imports & Products and social sustainability. even dreamed of. Paul Rice President & CEO 38 Supporters 42 Financial Summary TRANSFAIR USA ANNUAL REPORT 2009 5

Farmers Make Progress Apparel Standards Go Live In 2009, U.S. companies sourced Fair Trade products from 325 After a decade working to improve livelihoods on farms, TransFair farming cooperatives around the world. This powerful partnership USA moved to address the plight of factory workers in the apparel generated $48 million in above-market prices and additional income sector. To ensure impact and integrity, we incorporated multi- for hardworking farming families. Funding for Fair Trade community stakeholder input and public comment in our pilot factory standard, development projects increased 25 percent to nearly $14 million. which extends the strict social, economic and environmental protections found on Fair Trade farms to benefit garment workers. Industry Partners Grow The first Fair Trade Certified apparel and home goods hit U.S. retail shelves in fall 2010. Over 800 U.S. businesses joined our movement by year’s end, 10 percent more than in 2008. With the expansion of product categories available for certification, the number of Fair Trade Skoll Renews Support 2009 Accomplishments Certified™ products available to U.S. consumers skyrocketed past In 2009, TransFair USA received its second grant from the Skoll 6,000. Foundation for $1 million. Paul Rice was first honored by the Coffee Reaches Historic Milestone foundation in 2005 as one of the inaugural recipients of the Skoll Imports on the Rise Award for Social Entrepreneurship. The award invests in, connects TransFair USA certified 109 million pounds of Fair Trade coffee in 2009, more than we certified in our first and celebrates leading social entrepreneurs with the potential for seven years combined. Certified coffee and sugar import volumes jumped more than 25%, large-scale positive impact. despite the recession, while bananas – our second-highest volume category – doubled. In newer, smaller categories, imports increased an impressive 500 percent for wine, 300 percent for rice, 400 percent Retailers Innovate for mangoes and 1,000 percent for avocadoes. Whole Foods Market nearly doubled the number of Fair Trade Certified products on its shelves to end the year with almost 1,500. New Products Launch Sam’s Club, Costco, Target, Trader Joe’s and scores of other retailers expanded their certified product offerings as well, despite the TransFair USA significantly increased the number of certified choices recession. available in the United States, introducing all remaining products certified through our international network, Fairtrade Labelling Organizations (FLO). These new offerings include quinoa, Brazil nuts, Our Efforts are Recognized olive oil, spices and herbs, vegetables, and even sports balls. Thanks in part to these many accomplishments, TransFair USA was named one of Entrepreneur Magazine’s Top 100 Brilliant Companies Access to Credit Expands for the second year in a row. TransFair USA and Starbucks joined forces to create the Small Farmer Sustainability Initiative, which provides farm loans, technical assistance and market linkage to small-scale coffee farmers. $1.2 Billion in U.S. Starbucks pledged to increase its farmer loan programs to $20 million by 2015. “ Retail Sales. ” TRANSFAIR USA ANNUAL REPORT 2009 7

Fair Trade Starts with Higher Standards Worker Training In 2009, we developed a new, unprecedented standard for Fair Trade Most factory training programs today are geared towards Certified™ apparel, benefitting not only underprivileged cotton management and do not give workers the tools needed to advocate farmers but also garment workers at the other end of the supply for their basic legal rights. Our approach to Fair Trade clothing starts chain. Our rigorous pilot standards build on core International with workers. Worker training is an essential requirement for facilities Labor Organization (ILO) standards. But beyond the basics, the seeking to sell certified apparel. distinctive Fair Trade principles of better livelihoods and democratic organization of farmers and workers are central to this ground- Worker training programs will feature: breaking initiative. • Local educators who use local-language curriculum Core factory labor standards address: • Peer training that builds capacity and develops leadership Project management skills needed to implement Wages and Benefits Freedom of Association • • • development projects • Health & Safety • Non-Discrimination • Child Labor • Environmental Management Rigorous Factory Monitoring • Forced Labor • Women’s Rights TransFair USA partnered with Verité, a highly-respected monitoring organization that supports fair labor practices worldwide, to develop What makes this standard unique, relative to other codes of conduct tools that will measure factory compliance with Fair Trade standards. in the apparel sector, is that both cotton farmers and factory After conducting a test audit at a facility in Rwanda, Verité helped us workers will earn a significant “Fair Trade premium” for each item develop a more robust and rigorous monitoring protocol. sold with the Fair Trade Certified label. This premium, set at 5-10 percent of the factory cost of each garment, effectively doubles Our monitoring approach highlights worker participation: the wages of factory workers over time. Workers can decide to Worker representatives participate in opening and closing distribute Fair Trade premiums as cash bonuses or invest them in • meetings of the audit community development projects. The pilot Fair Trade standards go beyond most existing codes of conduct by requiring manufacturing • Auditors directly interview workers at work and at home New Standard for Apparel companies to raise wages over time to a true living wage. • Auditors solicit input from local NGOs and unions

Extending Fairness From Farm to Factory During the public comment period on the pilot standard, we Lending a Hand to Cotton Farmers In 2009, we laid the foundation for Fair Trade Certified™ apparel by developing rigorous pilot standards, a worker training received input from 55 organizations in 15 countries. In response Small, family-run cotton farms in India and West Africa often struggle program, and tools to monitor sewing facilities against the standards. to input, we strengthened the standard as it applies to living just to survive. Fair Trade standards help certified farmers get a wage requirements, environmental sustainability and women’s better price for their harvest and support sustainable agriculture. rights. TransFair USA will review the apparel standard again at the Until now, Fair Trade Certified cotton products have only been end of the two-year pilot, based on multi-stakeholder evaluation available in Europe. With the launch of our pilot apparel standard of field results. in 2010, certified cotton farmers will finally gain access to the U.S. market and the promise of a better livelihood for their families. Social Sustainability Our Fair Trade Improving Income & Quality of Life Principles Every day, millions of farmers in developing countries diligently cultivate the land to grow products that Americans both love and take for granted. For a variety of reasons, ranging from lax government regulations to predatory local middlemen, farmers often cannot sell Fair Prices Empowerment and Transparency their crops for what they’re worth. The result is a cycle of poverty that harms not just individual farmers and their families, but entire communities and ecosystems. Our unique commitment to fair prices and community development Empowerment is an essential goal of Fair Trade. Small-scale farmers distinguishes the Fair Trade Certified™ label from all others. Farmers typically form cooperatives that allow them to process and export The Fair Trade system has helped almost 1.5 million families in 70 developing countries develop viable export enterprises, receive better are ensured a price that covers the cost of sustainable production their harvests competitively. Workers on larger farms organize prices for their products, and steadily improve their quality of life. with premiums for community development projects and certified Worker Councils that plan and manage their own community organic crops. development projects. Both types of organizations are audited annually for transparency, democratic process and sound financial Better Working Conditions management. Workers on certified farms can count on more than just better wages. They are guaranteed freedom of association, safe working Community Development conditions and protection from dangerous agrochemicals. Child U.S. companies pay premiums that allow farmers and workers to labor, forced labor and discrimination are strictly prohibited. invest in community development projects. These projects improve families’ access to clean drinking water, health, education, housing Market Access and other basic social services. Most Fair Trade farmers develop the business capacity to export their own harvests, which allows them to bypass middlemen and plug Environmental Sustainability directly into the global marketplace to get significantly higher prices. Fair Trade has one of industry’s highest standards for sustainable agriculture and environmental conservation. These standards Access to Credit strictly prohibit the use of most toxic agrochemicals and GMOs, promote active conservation of soil and water resources, and protect U.S. importers are encouraged to offer commercial credit to farmers, surrounding forests. In 2009, nearly half of all Fair Trade products either directly or in collaboration with financial intermediaries. were certified organic. Access to timely credit allows farmers to increase export capacity and improve product quality. 10 TRANSFAIR USA ANNUAL REPORT 2009

Rigorous Certification The Label: The Fair Trade Certified™ label represents a unique, powerful symbol for consumers that the farmers and workers behind the product got a better deal. It is more than a certification stamp, more than a Standards seal of approval that reassures consumers that their purchases are responsible. It is the end result of a rigorous global inspection and monitoring system. And it is a call to action. Behind the Fair Trade Certified™ label is an audit process widely Supply Chain Audit and Certification considered to be the most rigorous and transparent social auditing TransFair USA has built a highly-qualified certification team that system in existence today. We track transactions along the supply audits transactions between U.S. importers, manufacturers and chain between more than 800 U.S. companies and the farmer distributors and the farming organizations from which they source. groups from whom they source. In 2009, our certification team We verify the chain of custody to ensure that the companies audited more than 40,000 transactions between producers, licensed to display the Fair Trade Certified label meet our strict importers and manufacturers. Our team makes certain that the standards. A commitment to transparency and traceability lies at Fair Trade price is paid and holds companies accountable when Fair Trade the heart of our certification model and is one of the advantages of standards are not met. the Fair Trade approach. Certification Process TransFair USA is one of 24 member organizations that collaborate Commitment to Continuous Improvement under the Fairtrade Labelling Organizations International (FLO) umbrella. Based in Germany, FLO is a nonprofit, multi-stakeholder We constantly evaluate and improve our certification process to association of Fair Trade certifiers and farmer groups from Africa, ensure the integrity of our label. TransFair USA audits companies Fairtrade Labelling Organizations TransFair USA Asia and Latin America. TransFair USA is the only FLO-affiliated with a two-pronged approach: a desk audit review of transactions International (FLO) certifying body in the United States market. combined with on-site audits. Our on-site auditors visit partner companies and carefully review their files, inventories, internal Development of Fair Trade Standards control systems and traceability protocols. This deep-dive audit into how companies manage their Fair Trade product flow has proven FLO develops global Fair Trade standards based on academic, highly valuable to encourage transparent accounting and full industry and field research. All standards are vetted through a compliance with our standards. Reports & Data Sharing multi-stakeholder consultation process that reflects best practices in the fields of social and environmental certification. TransFair USA To learn more about FLO and FLO-Cert, visit www.fairtrade.net. sits on FLO’s Board of Directors and several operating committees, including the Standards Committee, to help guide the expansion of the global Fair Trade market. Certification on the Farm Transparency and The international certification agency FLO-CERT, a wholly owned traceability is key to subsidiary of FLO, has developed a global network of highly-trained “ Quarterly field auditors. These social audit professionals monitor cooperatives the credibility of any Audits & Report Reports & Audits & Report and companies to verify their strict compliance with Fair Trade Validation Supporting Validation social and environmental standards, as well as their investment of Documents community development premiums. Offering certification services certification label. in 70 countries around the globe, FLO-CERT gained accreditation in 2008 by the International Standards Organization (ISO), based on ” the strength of its audit and certification processes. It is the only social certification that is ISO 65-accredited. LICENSEES

PRODUCERS IMPORTERS MANUFACTURERS TRANSFAIR USA ANNUAL REPORT 2009 13

Community Investment Benefiting Producers and Their Families Fair Trade standards require U.S. buyers to deliver an established There were 865 certified producer organizations in 70 countries by premium to producer organizations to fund community the end of 2009, representing more than 1.5 million farmers and development and environmental conservation projects. workers. Fairtrade Labelling Organizations estimates that more Community members come together to assess and prioritize local than five million people worldwide directly benefit from Fair Trade, needs and then manage premium investments in community including certified farmers, their families and dependents. One development projects, such as: has only to visit a certified farm to realize that the uplifting social and environmental benefits of Fair Trade have a ripple effect that • Microloans for housing projects and small businesses touches millions of lives in the surrounding communities. Schools and scholarship programs • Number of Producer Organizations Selling to the U.S. Market. Health care coverage for workers and their families • YEAR 2008 2009 • Deep wells and clean water supplies Coffee 152 183 • Childcare facilities Tea 41 42 • Training programs supporting women and youth Produce 13 32 Cocoa 17 19 Flowers 21 16 Sugar 4 7 Wine 4 7 Vanilla 5 5 Community Empowerment Rice 5 4 A Safety Net Against Market Fluctuations Honey 4 3 Total 266 318 No other label in the world offers farmers the combination of sustainability, price and community development premiums that Fair Trade certification provides. In fact, other certification systems deliberately avoid the sticky issues of low wages and commodity prices in developing countries. The Fair Trade minimum price gives farmers a safety net when global commodity markets fluctuate wildly. When market prices fall, our farmers still receive a harvest price that allows them to cover the cost of production, protect the environment through more sustainable cultivation and care for their families. 14 TRANSFAIR USA ANNUAL REPORT 2009 Fair Trade On the Ground: Global Producer Services

The dramatic growth of Fair Trade in the United States has created Our projects focus on a few common challenges faced by new market opportunities for certified producers. However, doing most farmers as they strive to build profitable enterprises and business with global companies can be a challenge for many achieve sustainable development: producer organizations in the developing world, which often lack Improving product quality access to the latest production technology, market information, • working capital and management expertise. • Building business and financial management capacity • Helping cooperatives gain access to working capital TransFair USA launched its Global Producer Services (GPS) program Connecting farmers to U.S. buyers and forging strong five years ago to address this challenge and help producer • commercial relationships organizations maximize the benefits of Fair Trade certification. Our close relationships with importers, retailers and producers give us Our implementation model is lean and cost-effective. We have a unique perspective on global supply chains and allow us to easily cultivated a network of NGOs, development agencies and industry identify mutually-beneficial trade and investment opportunities. experts to deliver high-quality, results-oriented training and We work directly with producers to help them capture these investment services that help farmers overcome specific barriers to opportunities, develop strong relationships with U.S. business business growth. Ultimately, we measure project effectiveness and partners, and grow their Fair Trade sales. impact in terms of the return on investment for beneficiary farmers, assessing both their short-term and long-term income generation potential. Success Stories of 2009, By the Numbers The hands-on approach of GPS helps create concrete results around practices, and another 246 cooperative members were trained in the world that lead to lasting change. There are many examples of cocoa quality assessment. A health clinic was constructed this past this impact worldwide, but we would like to highlight three origin year with Fair Trade premiums, bringing medical care directly into countries that had especially successful years and have invested the community. Members of two producer groups were given six heavily in the future. motorcycles, a welcome alternative form of transportation for the incredibly heavy burlap sacks of cocoa beans. Small farms and cooperatives in every corner of war-torn Rwanda have embraced Fair Trade in the quest to rebuild their economy and Fair Trade coffee farmers in Brazil are on a mission to break down country, and in the process have instituted some completely unique the conception that Fair Trade coffee is somehow of lesser quality. ideas. The women of Rwandan coffee have hit the ground running, They are doing so through massive infrastructure improvements and in 2009 alone five women’s associations were formed, three of and trainings, made possible by Fair Trade premiums. Four new which participated in the Women’s Entrepreneurship Program. This producer groups became Fair Trade Certified™ in 2009, joining led to a special “women’s coffee” being marketed by 130 members 12 other groups in this investment project. It resulted in the of the women’s associations. In just its third year in Rwanda, GPS construction of a cupping laboratory, 57 drying patios being paved saw 2,520 farmers benefit from Cooperative Governance and Fair and the installation of a mechanical coffee sorter and 14 hulling Trade training, and 1,352 farmers receive a $50,000 grant from the machines. This infrastructure investment manifested itself in International Labour Organization. In a nation where educational education as well as construction. There were 313 producers directly opportunities are scarce, 90 percent of children in Fair Trade trained in coffee quality, 60 days of cooperative governance training cooperatives attend school. Education is the best investment and over 300 hours of administrative and accounting training. When that can be made, and sowing the seeds of training programs for all was said and done, over 26,000 pounds of high quality coffee farmers and consistent schooling for their children will yield a future was sold in the second annual Fair Trade Cupping Competition as strong and bright as the midday Rwandan sun. Auction, and $100,000 was granted to producer organizations for further infrastructure improvements. Just like their compatriots in The GPS program in the West African nation of Cote D’Ivoire seeks the Beautiful Game, Brazilian Fair Trade coffee farmers cannot be to build a sustainable cocoa industry that focuses on quality. In stopped when they set their eyes on the goal. 2009, over 1,400 Fair Trade farmers were trained in agronomy best Producer Origin Developing Economic Partnership Projects Sustainability

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Brazil: Cote D’Ivoire: Rwanda: 1 2 Responsible Sourcing Partnership Supporting Cocoa Farmers 3 Rebuilding with Coffee

Since 2007, TransFair USA has partnered with USAID, Walmart Our program in the West African nation of Cote D’Ivoire supports Rwanda’s efforts to rebuild its coffee industry have garnered financing from the international Progreso Fund to purchase coffee Foundation, Sam’s Club, Walmart Stores and Brazilian partner small cocoa farmers around the challenges of product quality, farm global recognition. TransFair USA works closely with government cherries from members that ensured fulfillment of their contracts. SEBRAE to boost the income and sustainability of small-scale productivity and market access. In 2009, we trained over 1,400 ministries, USAID, the Clinton-Hunter Development Initiative, and This loan is the first for Progreso in Africa, and the organization will Brazilian coffee farmers. Through training and infrastructure Fair Trade farmers in agronomic best practices and cocoa quality U.S.-based coffee companies to help small farmers take advantage expand its services to other Rwandan cooperatives if successful. development, this three-year project has enabled over 5,000 Fair improvement. We also linked cocoa cooperatives to U.S. chocolate of Rwanda’s re-entry into the global coffee market. Since 2006, Thanks to these and other efforts, in 2009 every available Fair Trade Trade coffee farmers to achieve three strategic goals: improve coffee manufacturers to help boost sales. As a result, participating farmers TransFair USA has invested in infrastructure and training to boost Certified coffee bean in Rwanda was sold on the international quality, increase co-op management capacity, and strengthen built a new health clinic this past year with Fair Trade premiums, coffee quality, enabling farmers to negotiate better prices for market under Fair Trade terms. direct market linkage with U.S. buyers. To date, this project has bringing medical care directly into their community for the first their harvests. We have trained more than 9,000 farmers in our achieved a 5:1 return on investment for participating farmers. time. Two other cooperatives used their premium funds to purchase “Cooperative 101” governance and management program. These Seeing firsthand TransFair USA’s work motorcycles for hauling heavy burlap sacks of cocoa beans from programs are enabling the cooperatives to become more efficient, “with coffee cooperatives in Rwanda their farms to community collection stations – a small but poignant profitable, democratic and transparent. confirms my enthusiasm for our family’s example of progress in the countryside. TransFair USA also assists coffee cooperatives in securing working charitable investment in this wonderful capital and building stronger relationships with U.S. buyers. social enterprise. With our support, the COOPAC Cooperative received pre-harvest − Ron Cordes, Cordes Foundation” 18 TRANSFAIR USA ANNUAL REPORT 2009

Land to the Tiller União dos Pequenos Agricultores de Santana da Vargem, Brazil

União dos Pequenos Agricultores de Santana da Vargem (UNIPASV) As sharecroppers, my wife and I had to is a coffee cooperative in the state of Minas Gerais in southeastern “turn over half our harvest each year to the Brazil. In 2000, the 74 small-scale coffee growers in the community landowner, who is one of the richest men united to form a cooperative in order to pursue a common dream of a better life. At that time, 80 percent of the co-op’s members were in our region. We never dared to complain either sharecroppers or renting farmland at continually higher prices. and lived in constant fear of losing our land. Like farmers everywhere, these families all dreamed of owning Our poverty was unending. For us, the only and cultivating their own land. But that dream remained painfully escape from this nightmare was to buy our elusive, due to the high cost of land and coffee production relative to the low prices paid by local buyers for their coffee harvest. Life was own land. We took the first step when we precarious, full of hardship, with little hope for change. organized the cooperative. But it wasn’t until we joined the Fair Trade movement that our In 2003 the community found a solution in Fair Trade certification. dreams began to come true. They made their first Fair Trade sale to the U.S. market a year later, earning more than double the price they had received the year − Francisco Alves, UNIPASV farmer ” before. With higher income, land ownership became a reachable goal for these humble farmers the first time in their lives. Today many Brazilian coffee farmers Francisco Alves has been co-op president for nearly eight years. His “are disillusioned. Many have abandoned personal story as a sharecropper-turned-landowner mirrors that of their fields, due to high production costs many of his neighbors. Francisco and his wife Teresa could never and low harvest prices. But through Fair afford to buy their own land. No matter how hard they worked and Trade, our community gets a decent price tried to save, they just barely made ends meet. But once they began selling to the Fair Trade market, things changed, and they were for our coffee. With last year’s premium, we able to set aside part of their earnings after each harvest. In 2008, repaired the roof on the schoolhouse and after years of patiently saving and hoping, Francisco and Teresa had added an extra classroom so our kids can enough money to buy their own four-acre coffee farm. Today, get a better education. 90 percent of the co-op’s members are landowners. “Life feels full of possibilities,” says Francisco. − José Milton Bento, UNIPASV farmer ”

The community has also used Fair Trade premiums to support local schools and build a new cooperative headquarters. Now that most co-op members have land, Francisco and other community leaders have turned their attention to coffee quality, enrolling their farmers in TransFair USA’s quality development program. Their ambitious aim is to boost quality scores, coffee sales and net income in the next few years. 20 TRANSFAIR USA ANNUAL REPORT 2009

The Women of Hinga Kawa Abakunda Kawa Cooperative, Rwanda

The women of Abakunda Kawa Coffee Cooperative often gather Over the next few years, things got better for them, and word outside the Rushashi coffee washing station in the late afternoon to of their success spread. By 2009, Hinga Kawa had grown to 155 relax after a day’s work and gaze out over the countryside. A nation members, and their export volume topped 18 tons. To find a about the size of Vermont, Rwanda stretches across thousands of market for their expanded production, the women decided to hills and valleys to create a breathtaking landscape. Sixteen years send Esperance Nyarigumafura, their President, to the 2009 after the devastation of war, Rwanda is a place of renewal and hope. Specialty Coffee Association of America (SCAA) Conference in Nowhere is this more visible than in its coffee communities. Atlanta, Georgia. It was a dream come true for Esperance and her colleagues, since none of them had ever travelled outside of Coffee is one of Rwanda’s most important export crops and its Rwanda. By the second day of the conference, Esperance had not primary source of foreign exchange. Ideal growing conditions, only found a buyer for their coffee, selling the entire harvest to an combined with the astonishing work ethic of the farmers, make it American coffee importer on Fair Trade terms, but she had also built possible to cultivate coffees renowned for their unique flavors. The relationships with dynamic women in the U.S. coffee industry that women of Rwanda are the heart of its coffee culture. would help them realize other dreams in the future.

Rwanda has an unusually high female population as a result of the In late 2009, the women of Hinga Kawa participated in their war, and one-third of all households are headed by women. Over first-ever entrepreneurship trainings focused on financial literacy, 62 percent of those families live in poverty. Many women struggle accounting and general administration. The women leveraged to reconstruct their families and villages while learning to be the initial trainings offered by TransFair USA to strengthen successful farmers and businesswomen. organizational and management practices at both the household and cooperative levels. Always building on positive experience, the In 2006, a group of 26 pioneering farmers from the mountains women subsequently developed a project proposal for continued of Gakenke province – all women – came together to discuss training in leadership, social dialogue, health and sanitation, and the plight of their community and start to organize. They called income diversification – a project which they hope to fund in 2010. themselves the Hinga Kawa Women’s Association. Faced with very low coffee prices in the local market, these women joined Hinga Kawa’s success has inspired women in other regions of a local Fair Trade cooperative and pitched the idea of marketing Rwanda to launch women’s associations and take on leadership their harvest separately to Fair Trade buyers interested in women’s roles in their cooperatives. It appears that a movement has been empowerment. born. Women in Rwanda have become the center of an effort that is driving real change and a positive future for the country as a whole. The idea was an immediate success. In their first year, they sold four tons of coffee at a premium price, using this niche-marketing approach. With the extra money they earned, the women were able to keep their kids in school and pay for health care. TRANSFAIR USA ANNUAL REPORT 2009 23

Stringent Environmental Standards Organic Conversion Fair Trade principles assert that social and environmental Fair Trade’s strong environmental requirements are complemented sustainability are inextricably linked. Nowhere is this logic more by financial incentives that motivate farmers to explore organic evident than in the developing world’s agricultural sector, where conversion. For major Fair Trade commodities such as coffee, cocoa decades of deforestation and “modern” agriculture have led to and bananas, farmers are ensured a 15-20 percent price premium depleted soil, polluted water sources, ravaged ecosystems and for crops that are also certified organic. This incentive has lead declining household income for farmers. By embracing sustainable thousands of farmers to seek organic certification in order to satisfy agriculture, Fair Trade farmers are enhancing their own well-being growing market demand for “double-certified” products. In 2009, and that of generations to come. To support this journey, our 47 percent of all Fair Trade Certified products imported into the U.S. rigorous environmental standards address the critical elements of market were also certified organic. ecosystem sustainability: Technical assistance • Restricted use of agrochemicals. Fair Trade standards impose TransFair USA collaborates with companies, NGOs and farmers the most stringent restrictions of any non-organic product on technical assistance projects that improve land stewardship. certification on the use of harmful herbicides and pesticides. Key program activities include organic conversion, reforestation, To achieve Fair Trade certification, farmers must agree not to reduced water usage in processing, solar drying infrastructure use the dangerous agrochemicals found on the World Health and farmer training in sustainable agriculture. We believe that Organization’s Class Ia & Ib lists, the Pesticide Action Network’s technical assistance programs are essential to achieving continuous “Dirty Dozen” list and the United Nations Environment Program’s improvement in environmental conservation. Prior Informed Consent Procedure list. • Smarter farming practices. Fair Trade farmers must implement Fighting Climate Change integrated crop management systems based on leading A growing body of literature now indicates that climate change, agroecological principles. This model dramatically reduces the both in local ecosystems and at the planetary level, is linked to need for pesticides and other agrochemicals by employing destructive agricultural practices. Fair Trade standards address this natural farm management techniques such as composting, challenge head-on. By adopting progressive agricultural practices, crop rotation and biological pest management. Farmers must reducing the use of petroleum-based agrochemicals, encouraging demonstrate continuous improvement of soil and water energy-saving processing methods such as solar drying, managing conservation practices, as well as implement recycling and waste watersheds, and supporting forest management and reforestation, disposal systems. The result: lower production costs, higher our farmers are actively sequestering carbon from the atmosphere profitability and greater environmental sustainability. Environmental Sustainability while dramatically reducing their own carbon emissions. By Protecting Our Planet’s Future • Saving the forest. Farmers must develop forest and watershed committing to smarter agriculture and environmental stewardship, management plans for any forest lands on or around their farms. over 1.2 million Fair Trade farmers make a powerful everyday Environmental conservation is a key element of international Fair Trade standards. More than half of all Fair Trade farms are certified organic, This helps reduce soil erosion and protects water sources while contribution to our shared future. one of the most environmentally friendly forms of agricultural production. Ultimately, Fair Trade empowers farming families to become supporting biodiversity. successful stewards of their land and defenders of our entire planet. • No Genetically Modified Organism (GMO) crops. Fair Trade environmental standards prohibit the use of GMOs on all certified farms. Protecting the

Healthy Land and Healthy People environment“ goes Restricting agrochemical use has a positive effect on public health hand-in-hand with and safety. Reduced usage of toxic chemicals on Fair Trade farms is helping eliminate the contamination of groundwater sources. More- improving lives over, by reducing their exposure to harmful agrochemicals, farmers report dramatic reductions in pesticide intoxication and related and developing health issues that once were prevalent in most farming regions. communities. ” TRANSFAIR USA ANNUAL REPORT 2009 25 Ethical Consumerism on the Rise Celebrating From our humble roots in grocery cooperatives and independent coffee houses, Fair Trade Certified™ has grown to encompass Fair Trade Month a wide variety of products available in more than 50,000 retail outlets. Across industries, pioneering brands continue to innovate 31 Days, 31 Ways the category, expanding into new food products and ingredients sourced from 70 developing countries. TransFair USA’s Fair Trade Month campaign brings together brands, retailers, NGOs, consumers and the media to promote Every week, an estimated 50 million American consumers choose Fair Trade. Grassroots events, producer tours, media relations, retail outlets and products based on their desire to be part of a online marketing and distributer promotions all help to galvanize solution to global poverty and sustainability. From a morning coffee supporters and build consumer awareness. The end result is more and bowl of fruit to wine with dinner and a piece of chocolate products sold and more farmers served. before bed, Fair Trade helps us all make a profound difference in the lives of hardworking farming families simply by choosing to October 2009 marked the sixth annual Fair Trade Month in the purchase the right products. United States, commemorated with a major online community- building campaign: 31 Days, 31 Ways. Each day of the month was In 2009, TransFair USA and our European colleagues commissioned marked by a different Fair Trade fact and a simple action that a major global consumer study to better understand awareness enthusiasts could take to support the movement. These facts and and attitudes toward Fair Trade. The international research group actions were spread virally through our growing social networks on GlobeScan conducted the study by surveying consumers in 15 Facebook and Twitter with the help of our industry partners, NGOs countries with well-established Fair Trade markets. and enthusiastic consumers.

The study found that: By the end of the month we had reached our goals of 31,000 fans of • Nearly nine in 10 American consumers believe that companies Fair Trade Certified on Facebook and 3,100 followers of @FairTradeUSA that source products from poor countries should pay workers on Twitter. These growing online communities play a critical role in fairly and ensure safe working conditions. our efforts to raise awareness and demand for Fair Trade products. • Eighty-one percent of American consumers believe that companies sourcing from developing countries should Building the Movement contribute to community development. Raising Awareness • The Fair Trade Certified label positively affects brand perception Fair Trade Month is a great example for 81 percent of American consumers. “of companies, activists and consumers Millions of consumers actively support social responsibility and environmental sustainability through their purchasing decisions. The Fair Trade Certified™ label is a call to action and a powerful symbol of this groundswell of conscious consumerism. • Fifty-seven percent of Americans say they would spend at least collaborating for the common good. The five percent more for Fair Trade Certified products. end result: more consumers are awakened • More than half of American consumers believe that the best and empowered to vote with their shopping way to verify a product’s social or environmental claims is by dollars for a better world. certification via an independent, third party organization. – Paul Rice, President and CEO of TransFair USA”

Given the continuing rise of the ethical “consumer right through the economic crisis, Fair Trade Certified is one of the brands most likely to succeed. – Doug Miller, Chairman, GlobeScan” 26 TRANSFAIR USA ANNUAL REPORT 2009 TRANSFAIR USA ANNUAL REPORT 2009 27 Fair Trade Month Igniting Citizen 2009 Highlights: Consumers: Fair Trade Towns

The Fair Trade Towns campaign began in this country in 2007 as an authentic grassroots initiative to mobilize local communities. Taking the credo of “think globally, act locally” to heart, community activists work to raise consumer awareness, expand the availability of Fair Trade products in local stores, and promote the movement in local media. Ultimately, by boosting sales of Fair Trade products in Achieving Fair Trade Town Status their communities, the Towns activists have a direct, positive impact Municipalities must meet five goals to become official Fair Trade on farming families and communities around the world. Towns. The five goals are intended to build a platform for long-term TransFair USA’s President and CEO Paul Divine Chocolate hosted a Share the Fair Trade advocacy. • ages from Dunkin’ Donuts. Dunkin’ Do- • The movement began in the United Kingdom in 2000 when Rice joined Starbucks Senior Vice Love campaign, sponsoring dozens nuts also hosted a campaign on Facebook Garstang, England, was recognized as the first Fair Trade Town in President of Coffee & Tea Dub Hay at the of chocolate sampling events in cities 1. A local Fair Trade Steering Committee is formed and and Twitter to promote Fair Trade to the the world. Since then, the number of Fair Trade Towns has grown Starbucks headquarters in Seattle for throughout the country, including New meets regularly. company’s massive online audience. to 800 across the United Kingdom and Europe. TransFair USA has a live Q&A session that was broadcast York City, Washington and San Francisco. Green Mountain Coffee launched the played a leadership role in the Fair Trade Towns USA campaign since on USTREAM. More than 5,000 people • 2. Fair Trade products are readily available in local stores, cafés Eat, Drink & Be Fair campaign, which Global Exchange partnered with Equal its inception and this year launched a significant fundraising effort viewed the broadcast, which is currently • and other retail locations. included a website, daily Fair Trade trivia, Exchange, Alter Eco, Sweet Earth to expand the program. available online. a major culinary event and plenty of free Organic Chocolates, La Siembra and 3. Local community organizations and institutions use and serve TransFair USA teamed up with the Fair Fair Trade Certified coffee. Coco-Zen for the third annual Reverse During 2009, the movement grew from nine to 13 declared Fair • Fair Trade products. Trade Boston campaign and the Boston Trick or Treat campaign, in which hun- Trade Towns while activists launched more than 40 new campaigns Faith & Justice Network to give 25,000 dreds of children in the United States and around the country. To learn more about Fair Trade Towns, please 4. The campaign attracts visible support and media attention. Boston T riders coupons for free hot or Canada handed out Fair Trade Certified visit www.FairTradeTownsUSA.org iced Fair Trade Certified™ espresso bever- chocolate and educational materials to 5. The City Council passes a resolution to support the campaign adults on Halloween. Fair Trade Towns and commits to procure Fair Trade products.

Media, PA; Brattleboro, VT; Milwaukee, WI; Amherst, MA; Taos, NM; Northampton, MA; San Francisco, CA; Montclair, NJ; Ballston Spa, NY; Chico, CA; Bluffton, OH; Burlington, VT; Highland Park, NJ Fair Trade is like an international farmers “market, and now our citizens have the ability to affect social change by becoming conscientious consumers. – Tom Barrett, Mayor, City of Milwaukee, WI ”

Fair Trade Towns USA empowers “socially responsible community groups and businesses around the country that are committed to raising consumer awareness around a simple truth: every dollar we spend is a powerful decision, with ramifications that echo across continents. – William Linstead Goldsmith, National Coordinator of Fair Trade Towns USA ” TRANSFAIR USA ANNUAL REPORT 2009 29 A Community of Leading Brands

Leading brands and retailers, spanning scores of product categories, have made Fair Trade the success that it is today. In 2009, more than 80 new companies joined the movement to offer Fair Trade Certified™ products, bringing the total number of U.S. industry partners to 813. In addition to the hundreds of companies that carry single-ingredient products such as coffee, tea, sugar and bananas, many businesses now carry composite products that contain multiple certified ingredients. From ice cream to beverages to cosmetics, Fair Trade Certified ingredients now appear in more than 6,000 products.

Industry Momentum A Symbol of Fairness & Quality To earn the license from TransFair USA to use the Fair Trade Certified™ label on their products, companies must buy from certified farms, pay Fair Trade prices and community development premiums and submit to a rigorous supply chain audit. This process necessitates a high level of transparency and traceability in their global supply chains. Today, our partner companies range from small, mission-driven coffee roasters to some of the largest international corporations in the world.

U.S. retail sales of Fair Trade Certified products was an estimated $1.2 billion in 2009, a increase of seven percent over 2008. 30 TRANSFAIR USA ANNUAL REPORT 2009 TRANSFAIR USA ANNUAL REPORT 2009 31

Raising Awareness Fair Trade Certified In 2009, Dunkin’ Donuts prominently added the Fair Trade™ Certified label to all hot espresso beverage cups sold in the United States. Notably, Dunkin’ has exclusively Firsts & Honors purchased Fair Trade beans for all of its espresso drinks since 2003.

Dunkin’ Donuts also joined TransFair USA and hundreds of Fair Trade supporters in a high- profile promotional effort to distribute coupons to Boston transit riders for free Fair Trade Certified espresso beverages.

Frontier Launched Fair Trade Adina and Steaz Among Certified Spices BevNET’s Best America’s ‘First’ Tea Frontier Natural Products Co-op became the BevNET.com’s sixth annual “Best Of” awards first company in the United States to offer Fair recognized the year’s best new product launches, Honest Tea became the first bottled-tea manufacturer in the United States to market a Trade Certified organic spices to consumers including two TransFair USA partner companies— Fair Trade Certified product when it launched Peach Oo-la-long in 2003. Since then, the and ingredient manufacturers. The company’s Adina Holistics and Steaz Teas. Adina’s innovative company has expanded to nine Fair Trade flavors. 16 new organic spices all hail from Sri Lanka, product design and delicious taste made it BevNET’s and include cinnamon, nutmeg, mace and Best New Non-Carbonated Beverage. Steaz took In 2009, the company was honored to learn that President Barack Obama’s favorite both black and white pepper. home both the Best New Organic Beverage and beverage is Honest Tea Black Forest Berry. The news inspired the company to convert this Best New Carbonated Beverage honors with its Zero item to 100 percent Fair Trade Certified ingredients, ensuring Fair Trade’s rightful place in Calorie Sparkling Green Tea. the White House.

Peak Organic Brewing Introduced Rishi Tea Won Big at World Tea First Fair Trade Certified Beer Championships Driving Innovation TransFair USA is pleased to announce the arrival of Competing among 41 different companies Fair Trade Certified™ beer: Peak Organic Brewing who submitted nearly 300 teas, Fair Whole Foods Market, the leading retailer of natural and organic foods, is committed to Company‘s Espresso Amber Ale. This Portland, Trade champion Rishi Tea took home an supplying food that is beneficial to consumers, producers and the earth—a commitment Maine-based brewery teamed with its friends down unprecedented 28 awards, including a underscored by its highly visible ethical sourcing program, called the Whole Trade™ the street at Coffee By Design to create a robust ale stunning victory of 11 First Place winners at Guarantee. infused with flavorful Fair Trade espresso. the 2009 World Tea Championship.

After doubling its Fair Trade offerings in 2008, Whole Foods kicked off 2009 with an impressive 860 Fair Trade Certified products and nearly doubled the number of Fair Trade products over the course of the year, ending with 1,500. From tea, coffee, sugar and chocolate to energy bars, flowers, jams, cosmetics and wine, Fair Trade Certified products are now available in almost every aisle, in part because Whole Foods Market has actively encouraged its vendors to convert their product lines to Fair Trade. Much of the product Alter Eco Introduced Kenneth Davids and innovation and category expansion of Fair Trade in 2009 is a direct result of Whole Foods Fair Trade Certified Olive Oil The Coffee Review Market’s leadership and encouragement. Alter Eco unveiled the first Extra Virgin Olive Oils Every year, world-renowned coffee from Palestine, which are certified organic, Fair Trade expert Kenneth Davids evaluates and carbon neutral. These GMO-free, gluten-free coffees from across the globe for The and vegan oils originate from Rumi and Nabali olives, Coffee Review. In 2009, eight Fair Trade Toasting Fair Trade both native to Palestine. Certified varieties scored 90 or above on a 100-point scale and six others Target introduced a Fair Trade Certified wine collection at 800 stores nationwide in 2009. scored in the 88-90 range, a record The Wandering Grape collection includes an award winning Malbec-Merlot blend from number for Fair Trade coffees. Argentina and a Cabernet-Shiraz blend from South Africa. Target has also been selling Fair Trade Certified chocolate and coffee for several years. TRANSFAIR USA ANNUAL REPORT 2009 33 Coffee Quality Coffee Producer Advisory Council Our Coffee Producer Advisory Council gives farmers an opportunity & Market Linkages to play a leading role in developing strategies for expanding the Fair Trade market. This Council is comprised of 10 highly-regarded grassroots leaders Latin American and African cooperatives, who According to the International Coffee Organization, nearly 70 per- gather with us to study market dynamics, discuss strategies and cent of the world’s coffee farmers are small-scale growers who own address producer concerns. fewer than 20 acres of land. These family farmers often sell to local middlemen at very low prices, locking them in a cycle of poverty. In 2009, we convened the Council three times for joint meetings These are the families we support and empower through capacity with leading importers and roasters from the U.S. coffee industry. building, market linkage and collaboration with industry partners. The meetings focused on understanding and reacting to emerging challenges and opportunities in the growing Fair Trade market. Key Coffee continues to be the predominant Fair Trade product in issues included the rise in production costs faced by coffee farmers the United States. In 2009, U.S. companies achieved an historic and lack of access to farm credit. milestone by importing more than 109 million pounds of Fair Trade Certified™ coffee, a volume increase of 25 percent over 2008. These Fair Trade Certified Cupping Competition imports generated almost $11 million in community development Our second Fair Trade Certified Cupping Competition, part of the premiums for coffee farmers and their families, helping improve Responsible Sourcing Project, took place in 2009. Held in Minas lives with vital social services and infrastructure. Gerais, Brazil, the competition recognized the best Brazilian Fair 1998-2009 2009 2009 Trade Certified coffees and the farmers who produced them. An in- Pounds Certified Pounds Certified Percent Organic ternational panel of eight experts judged the coffees, and the win- 448,275,603 109,795,363 47% ning farmers received generous rewards. The winning coffees had the added benefit of fetching above-market prices when auctioned Imports & Products off after the competition. However, the real prize was the industry 2009 Coffee Market Guide recognition of the high-quality coffee that these farmers produce. Record Growth Each year we publish the Coffee Market Guide in English, The demand for Fair Trade Certified™ products has grown rapidly nationwide and made 2009 a banner year for TransFair USA and our Portuguese and Spanish. Part of our farmer capacity building partners. We certified over 100 million pounds of coffee for the first time in our eleven-year history. Demand for Fair Trade Certified wine program, this guide is distributed to coffee cooperatives around quadrupled, bananas doubled and avocados increased tenfold. We opened up new opportunities for Fair Trade Certified grains, nuts, the world. It offers data and insight into the U.S. coffee market and olive oils and sports balls. helps cooperatives improve their coffee sales and production. 2009 imports of Fair Trade Certified products into the United States (in millions of pounds). Specialty Coffee Association of America

Coffee 109,795,363 Tea 1,372,157 Cocoa 2,629,411 Rice 971,454 Sugar 10,963,627 The annual Specialty Coffee Association of America (SCAA) 1 2 Conference is the leading event for the global coffee industry. Produce 50,272,722 Vanilla & Spices 149,344 Flowers 9,539,859 Honey 242,671 Wine 1,450,717 Members include coffee retailers, roasters, producers, exporters 1 2 Unit measure for flowers is stems. Unit measure for wine is 750ml bottles. and importers. The conference gives farmers a unique opportunity to do business directly with U.S. buyers, promote Fair Trade and participate in valuable training sessions.

At the 2009 SCAA conference in Atlanta, Georgia, TransFair USA hosted 150 farmers representing 55 coffee cooperatives from 15 countries. These producer organizations sold an estimated 3.7 million pounds of coffee, thanks to their participation in the show, the equivalent of about 120 million cups. 34 TRANSFAIR USA ANNUAL REPORT 2009 TRANSFAIR USA ANNUAL REPORT 2009 35 Fair Trade Certified Cocoa Wine After a booming growth year in 2008, Fair Trade Certified cocoa In 2009, Fair Trade Certified™ wine grew in leaps and bounds, Product Overviews imports scaled back in 2009 as cocoa importers sold off their marking a successful end to the first complete year since its launch remaining 2008 inventory. The percentage of organic imports, in the U.S. market. Argentina took the lead as the largest origin of however, continued to grow and represented 85 percent of Fair Trade Fair Trade wine, but a steady contribution was seen in South African Fresh Produce cocoa in the U.S. market. Furthermore, our community of partners and Chilean imports, too. Produce continues to be a leading product category in terms of that use Fair Trade cocoa has continued to grow—85 companies now In South Africa, Fair Trade wineries have implemented special growth. Market demand for Fair Trade Certified™ produce increased source certified product. The use of Fair Trade Certified cocoa butter programs to support post-apartheid economic empowerment. In even more sharply in 2009 than in 2008 as volumes nearly doubled, in body care products is on the rise, and cocoa powder has started 2009, TransFair USA hosted South African wine producers Fairhills as did community investment funds back to farmers and workers. to appear in ready-to-drink beverages, baking mixes, ice cream and energy bars. Looking ahead, 2010 promises to be a growth year for and Stellar Organics to participate in market linkage opportunities, Banana volumes almost doubled from 2008, while avocados cocoa, since many top global chocolate companies have pledged to including an exciting cross-country tour during Fair Trade month, increased by a factor of 10 and mangoes quadrupled. strengthen their commitment to Fair Trade sourcing. meetings with interested buyers, wine tastings and educational talks. We celebrated the impact of Fair Trade in South Africa at two Sales of Fair Trade bananas continued to rise in the U.S. market for 2002-2009 2009 2009 special events held at the South African Embassy in Washington, the third year in a row. The result was an impressive $1 million in Pounds Certified Pounds Certified Percent Organic D.C., and the South African Consulate General in Chicago. premium funds in 2009 to support scholarships, microloan programs 12,200,171 2,629,411 91% for small businesses, environmental programs and many more The amount of community development premium funds has sustainable community development projects in Latin America increased by more than 500 percent since Fair Trade Certified wine South African Ambassadors Honor Tea first hit U.S. shelves, which demonstrates the remarkable impact Fair Trade Certified Wine Launch 2004-2009 2009 that this product can have on farmers and vineyard workers. Product In spite of the difficult economic climate, imports of Fair Trade On June 25 and July 1, 2009, the South African Embassy in Pounds Certified Pounds Certified Certified tea remained stable in 2009 at around 1.3 million pounds. Washington, D.C. and the South African Consulate General in 2008-2009 2009 2009 Avocados 610,550 554,550 Chicago feted TransFair USA and Stellar Organics in celebration Almost 5.5 million pounds of Fair Trade Certified tea have been Bottles Certified Bottles Certified Percent Organic Bananas 102,574,890 49,270,680 of the U.S. launch of Fair Trade Certified wine from South sold in the U.S. market since 2001, generating nearly $2 million in 1,708,677 1,450,717 14% Mangos 1,114,754 303,777 Africa. These festive and collaborative events were attended premiums for farmer organizations in nine different countries. These by a wide variety of TransFair USA allies including business, organizations have invested in programs to enable better access to Fresh Flowers government, foundation, media and grassroots partners, and Sugar health care and education, support women’s initiatives and protect Flower imports were virtually flat in 2009. Nevertheless, loyal were a powerful debut for Fair Trade Certified wine in the Fair Trade Certified sugar continues to be a success story with growth the environment. Beyond the premium benefits for producers, the retailers such as Whole Foods Market and Shop Rite purchased United States. of more than 25 percent from 2008 to 2009. This versatile product Fair Trade standard also supports better wages, the right to organize nearly 10 million stems from 16 certified farms in Kenya, Ecuador reaches the U.S. market as packaged sugar and as an ingredient in and a safe working environment on large tea estates. A keynote speaker at the gatherings was Berty Jones, Head and Colombia. These imports generated almost $300,000 in an ever-growing list of consumer packaged goods such as chocolate of the Joint Body of Stellar Organics in Trawal, South Africa. While traditional Asian origins (India and Sri Lanka) continue to community development premiums, which were paid back to bars, bottled beverages, jams and spreads. Mr. Jones touched hearts by telling his story of rising from be the largest source of Fair Trade tea in the U.S. market, African farmers and workers on certified farms. These funds helped pay a concrete-layer who couldn’t speak English to his current teas—especially Egyptian herbal and Rwandan conventional teas— for medical clinics and treatment, clean water, better housing, The continued market expansion of sugar is exciting for consumers position as cellar master. and a sweet deal for farmers. Since the introduction of the Fair grew sharply in 2009. Other notable trends: China is becoming an scholarship programs and other vital social programs benefitting Trade Certified sugar category to the United States, companies have increasingly important origin for certified tea, while Fair Trade herbal the workers and their families. paid more than $1 million in Fair Trade premiums to small-scale teas are expected to report strong growth in the coming years. You cannot imagine what it is like for sugar farmers in Paraguay, Malawi and Costa Rica. These premium 2007-2009 2009 In 2009, many industry partners expanded their lines of Fair Trade Stems Certified Stems Certified “someone like me to come all this way payments contribute to the alleviation of poverty in these countries, teas. Meanwhile, 13 new tea manufacturers joined the Fair Trade as well as much needed improvements in the livelihoods of the 20,025,719 9,539,859 to tell someone like you about the impact community, bringing the U.S. total to just over 100 tea companies. producers, their families and their communities. of Fair Trade and the difference that Fair Trade Certified tea is now prevalent in the specialty market and is Honey it is making, 2005-2009 2009 2009 picking up momentum in mass markets nationwide. Fair Trade Certified honey imports, which are entirely organic, have – Berty Jones, head of the” Joint Body of Stellar Organics Pounds Certified Pounds Certified Percent Organic in Trawal, South Africa 2001-2009 2009 2009 remained modest since the program’s U.S. launch in 2008. The 32,170,469 10,963,627 85% Pounds Certified Pounds Certified Percent Organic U.S. market is largely driven by the dedication of a few visionary 5,454,842 1,372,157 78% companies who remain committed to delivering continued impact to beekeepers and their families across Mexico.

As honey extends beyond the food industry to the body care industry, and as TransFair USA looks to expand supply into new origins, Fair Trade honey is expected to take off in the coming years.

2008-2009 2009 Pounds Certified Pounds Certified 509,055 242,671 36 TRANSFAIR USA ANNUAL REPORT 2009 TRANSFAIR USA ANNUAL REPORT 2009 37 Vanilla Rice New Fair Trade Fair Trade vanilla imports support the livelihoods of farmers in rural Fair Trade rice has been something of a sleeper category for us regions of India and Uganda, giving them a larger portion of the final since launching in 2005. But rice imports tripled between 2008 Certified Products selling price. In 2009, vanilla imports rose 20 percent and farmers and 2009, suggesting renewed industry interest in the high-quality received more than $26,000 in community development premiums. Fair Trade basmati and jasmine rice varieties grown by small family farmers in India and Thailand. Most of these farmers have turned to Quinoa Sports Balls In India, these funds are channeled through the Eco-Agri Research organic rice cultivation as a way to reduce costs, increase income, After much anticipation, TransFair USA was delighted to certify TransFair USA began testing the certification of Fair Trade sports Foundation, a nonprofit organization that supports small-scale protect their ecosystems and achieve greater sustainability at the Fair Trade quinoa for the U.S. market in 2009. Sales in this first year balls for the U.S. market in early 2009, addressing an industry that is vanilla farmers in Karnataka and Kerala states. Training programs community level. reached a respectable 300,000 pounds. Consumers can now find outside of our traditional agricultural model. Certified sports balls funded by Fair Trade premiums educate farmers and school children Fair Trade Certified™ quinoa in bulk bins and retail packages in select include rugby and soccer balls, with the potential for footballs, bas- on sustainable and organic farming techniques that both improve 2005-2009 2009 markets as demand for this protein-rich grain continues to grow. ketballs and volleyballs to become available over the next few years. crop quality and protect delicate ecosystems. Pounds Certified Pounds Certified 2,190,234 971,454 2006-2009 2009 2009 Fair Trade quinoa comes exclusively from Bolivia, where it has been This new category brings benefits to workers in Pakistan, a new Pounds Certified Pounds Certified Percent Organic cultivated for more than 6,000 years. Farmers live in conditions origin for the U.S. market. At Vision Technologies in Pakistan, 444,031 53,261 28% of extreme isolation in the Altiplano of southwestern Bolivia, which has been selling Fair Trade soccer balls to Europe for several where poverty is endemic. With their new Fair Trade community years, workers now receive free transportation to and from the development funds, farmers report that they are investing in work site, group insurance coverage, free vaccinations, subsidized several educational and training programs, including an organic meals, and medical attention for surrounding communities. cultivation program that teaches farming methods that don’t rely on harmful chemicals. 2009 Product Balls Certified 2009 Sports Balls 850 Product Pounds Certified Quinoa 304,351 Herbs and Spices The spice category presents exciting opportunities both as a Nuts and Oilseeds retail-ready product and as an ingredient in composite products. The launch of nuts and oilseeds in 2009 was modest, but it presents Fair Trade Certified spices can be found with certified tea, sugar an exciting opportunity for companies to expand their Fair Trade and cocoa in chai blends and baking mixes. Bottled spices hit the offerings. We anticipate that an array of body care and chocolate bar shelves in late 2009. Cloves, pepper and cinnamon represent the companies will take advantage of these new products in the future. bulk of U.S. Fair Trade spice imports to date. The expansion of the standards to include additional herbs and spices in July 2009 Fair Trade olive oil has brought much-needed assistance to signifies greater growth potential for the category in coming years. marginalized rural communities in the war-affected regions of Palestine. Fair Trade premiums helped fund higher-education In 2009, nearly $15,000 in community development funds reached scholarships to the children of 10 farmers per year, covering full spice farmers in India, Uganda and Sri Lanka as a result of their tuition and expenses for the students for four years of university. exports to the newly-opened U.S. market. In addition, there is an olive tree replanting program, a women’s microloan program and a workers’ capacity-building program, all 2009 2009 Product aimed at enhancing production and furthering sustainability. Pounds Certified Percent Organic Herbs & Spices 96,084 100% 2009 Product Pounds Certified Nuts & Oil Seeds 53,001 Shea Butter 54 Olive Oil 16,867 Brazil Nuts 36,080 TRANSFAIR USA ANNUAL REPORT 2009 39 Board of Directors Advisory Council

Tom Bullock Kenneth J. Beeby Chairman of the Board, Mac-Gray Corporation & Attorney (Consultant) & Retired Vice President of the General former President and CEO, Ocean Spray Cranberries Council, Ocean Spray Cranberries Susan Clare Andrew J. Ferren, Esq. Business Consultant Partner, Goulston & Storrs Michael E. Conroy Barbara Fiorito Chairman of the Board and former Senior Lecturer & Former Chair, Oxfam America, FLO Research Scholar, Yale University’s School of Forestry & Environmental Studies John Hannan Director of Development, Audubon Connecticut Theresa Fay-Bustillos Principal & Co-Founder, Ideal Philanthropy, LLC John Henry Former Senior Vice President of Grower Relations & Paul Hodge CFO, Ocean Spray Cranberries, Inc. Founding Chair, Global Generations Policy Institute Tim Horan Rick Larson Former Vice President Human Resources, Latin America, Director of Sustainable Ventures, The Conservation Fund Gillette Company

Katy Murray Stephen Land, Esq. Executive Vice President and Chief Financial Officer, Taleo Partner, Linklaters LLP Ellen Peck Joshua Mailman Senior Officer and Director of Development, President, Sirius Business Corporation Supporters Save the Children Paul D. Rice Kim Samuel-Johnson President, Samuel Family Foundation Philanthropists Showed Their Support President & Chief Executive Officer, TransFair USA As a nonprofit organization, TransFair USA depends on a community of individual, business, government and foundation donors to support Frank Tsai George Scharffenberger the growth of Fair Trade. We are grateful to repeat funders, including the Peery Foundation, the Skoll Foundation, RSF Social Finance, Special Assistant for International Development Policy and Practice, Partner, FLG Partners Stichting Het Groene Woudt, the Levi Strauss Foundation, and the Marisla Foundation for renewing their commitment in 2009. We were Office of the Vice Chancellor for Research, UC Berkeley also honored to receive grants from new funders, including the Ansara Family Fund at the Boston Foundation, the Curtis & Edith Munson Carlos Vargas Leitón Michael Shimkin Foundation, the Germeshausen Foundation, and the Cordes Foundation. Additional new funders in 2009 included Green Mountain Coffee, Financial Manager, CoopeTarrazu R.L. Costa Rica the Green Mountain Coffee Roasters Foundation and Wal-Mart Stores, Inc. Former Executive Vice President, Simon & Schuster, Inc.

Management Team

Joan Catherine Braun Chief Financial Officer Lynn Lohr Vice President of Resource Development Paul D. Rice President & Chief Executive Officer Todd Stark Chief Operating Officer

* As of July 2009 40 TRANSFAIR USA ANNUAL REPORT 2009 TRANSFAIR USA ANNUAL REPORT 2009 41

Theresa Fay-Bustillos North Beach Foundation Rachel Lee Holstein In-kind Supporters South African Consulate General in Partners, Allies and Donors Todd Gentzel Numi Organic Tea Eric Husby-Gerry Chicago Latin America Fund John Peed David Izzo Allegro Coffee Group South African International Business Collaborators Geoff Massingberd F. Elliott Ryder Ludvin Jacobson Alter Eco Linkages (SAIBL) Clinton Global Initiative Visionaries - $100,000 or More Ellen M. Peck Saint Mark’s Cathedral Nancy Janssen America’s Best Coffee Roasting Starbucks Coffee Company Equal Exchange Paul D. Rice & Marisol Aguilar Lara Santiago David & Jean Jonasson Company Stellar Winery Fair Trade Federation Anonymous donor – RSF Social Finance Geomar Foundation Sylvia Schelly Michael Kearney Angus Anderson Surf City Coffee Company Fair Trade Resource Network Green Mountain Coffee Roasters Foundation George Scharffenberger Patricia Scofield Sherry Keith Anti-body Swoonbeams Fairtrade Foundation Peery Foundation Small Planet Fund of RSF Betsy & Ira Silverman Deborah Kim Awaken Café Taleo Talent Management Solutions Global Center for Social Skoll Foundation Social Finance Chris & Margaret Sinclair Jacqueline Klippenes Bay Area Rapid Transit (BART) Tcho Entrepreneurship, University of the Stichting Het Groene Woudt Frank & Frances Tsai Connie Smith Donna Kreisberg Blends for Life Organics TechSoup Pacific United States Agency for International Development (USAID) Elaine Spaull Tannisha Lambert Borlaug Institute of Texas A&M The Roasterie Global Exchange Walmart Foundation Advocates - Sports Basement Gilbert & Elaine Lessenco University Theo Chocolate Green America $500-$999 Shelley Weiss Carolyn Lief Bradesco Tony’s Coffee and Tea Jan Vossen Consulting Gladys Wong Roger & Joanne Lind Bruegger’s Traditional Medicinals Lutheran World Relief We support TransFair USA because it Allen Fischer & Renate Belville Yahoo Inc. Donor Advised Fund Eric Lloyd Business Meets Sustainable Travel Chocolate Oxfam America Doña Tomás Restaurant “provides families and communities around David Zebker Kathy Lyons Development (BSD) Tully’s Coffee Root Capital Tim & Jeanne Horan the world with the dignity of work and Neil Marshall Bull Run Roasters Wild Card Roasters Sara Lee Rebecca Lee Friends – Judy McEvitt Café Imports Wholesome Sweeteners Schwab Foundation for Social Lynn Lohr & Lance Belville opportunity. And, of course, because we Linda & Mark Moriarty Capricorn Coffees World Flowers Entrepreneurship Pedro F. Mata Up to $99 believe Fair Trade Certified chocolate simply Amanda Morrell Carmichael Lynch Spong Zhena’s Gypsy Tea Skoll World Forum Adrian & Kim McCarthy Anonymous Barbara Noparstak Choice Organic Teas 1-800-Flowers Social Venture Network tastes the best. Microsoft Matching Gifts Program Alice Adler Kevin Olin Clinton Hunter Development Walmart Brasil Matthew Mlinac Dina Angress – Dave Peery, Executive Director,” The Peery Foundation Maneesh Pangasa Initiative World Economic Forum Salesforce.com Foundation Nathan Arico Nikki Posnick Counterculture Jane Serlin & Sam Egan Atonement Lutheran Church Erin Quiring De La Paz Coffee Maya & Dan Sharp Larry Bach Frances Ramirez Divine Chocolate Champions - 25,000-$99,999 Heather Soffan Diane Baer Richard Redfern Dunkin’ Donuts Cordes Foundation Thomas International USA Charlotte Baker Linda Roy Ecologica Green Mountain Coffee Roasters Incorporated Cindy Ballaro Tricia Russell Embassy of the Republic of South Alan Hassenfeld Peter Wantuch Katie Barrow David & Sandra Russell Africa Stephen & Jane Land John Bayer Sarah Saastamoinen Equator Estate Coffees & Teas Levi Strauss Foundation Rita Bohling Sociates - Deborah Sanborn & Donald Davella Fair Spirits Co. Jerome J. Lohr M. Bremer $100-$499 Emanuel Santa-Donato Fair Trade Sports Marisla Foundation Sarah Brown Maria Arellano Nebyat Shewaye Fairhills Ronald B. Rankin Changing the Present Nancy Baker Kelsey Stevens Ford Foundation Whole Foods Market Woodworth & JoAnne Chittick Chris Bancells Erin Swenson-Klatt Google Dan & Sue Cockrum Elizabeth Berlik Kurt & Mary Teichmann Goulston & Storrs Benefactors - $10,000-$24,999 Barbara & Don Cohen Nancy Bliss The Clorox Company Foundation Green Mountain Coffee Roasters Kayla Cole Ansara Family Fund at the Boston Foundation Kevin Braun Margaret Thomas Hub Bay Area Joan Conklin Susan Clare & Peter D. Parker Temmie Brier Tia Upchurch-Freelove In bloom Group Linda Couch Curtis & Edith Munson Foundation Cedar Lane Unitarian Universalist M. Upshaw J. Lohr Vineyards & Wines Carol Cox Germeshausen Foundation Church Joshua Von Korff Kopali Clyde Cramer Paul & Lorna Hodge Cheltenham High Ping Huang Wang Kris Besch Merredith Crist Kim Samuel-Johnson Philip Cook Mobi Warren La Yapa Nina Cudney Michael Shimkin & Barbara Fiorito Chris & Kathy Duda Robert & Allyson White Linklaters LLP Samantha Dickey Donor Spotlight: Maya & Dan Sharp Harriet Mouchly-Weiss Itzel Duran Anna Wiersma Massachusetts Bay Transportation Michael Dwyer Susan Farber Authority (Boston T) Maya and Dan Sharp of Pasadena, California are true Fair Trade Econscious Market Patrons - $5,000-$9,999 David Funkhouser Lenders Microsoft Software Donation devotees who have been spreading the word about Fair Trade Rebecca Ennen John Groce Program Jerome Dodson Andrew Ferren & Sue Wilkins Catholic Healthcare West for years. They have hosted Fair Trade events and supported Marghi Hagen Mortar Rick Larson & Gair McCullough Charlie Floyd Ford Foundation TransFair USA monetarily as contributors. And on top of it all, Lois Hallen Mountanos Brothers Coffee Katy Murray Linda Foster Idyll Development Foundation Maya is currently looking into how to introduce curriculum Susan Hanley Company Carlos Alberto & Ana Vargas Leitón David Gardiner Nonprofit Finance Fund Nikki Neufeld & Brian Harper Numi Organic Tea about Fair Trade into her children’s classrooms. William & Flora Hewlett Foundation Danica Gardiner Sisters of Charity of New York John & Diana Harrington One World Flowers GoodSearch Sisters of Charity of St. Elizabeth Amelia Holstein Pinhalense Partners - Susan Groff Sisters of the Holy Names of Jesus When asked what drew them to the movement, Maya and Gary Hutchens Prestige Wine Group $1,000-$4,999 Justin Guay and Mary Dan said that they are inspired by how Fair Trade empowers W. Burns & Marcia Bell Jones Republic of Tea Mark & Amy Hamilton Sisters, Servants of the Immaculate farmers and workers in impoverished countries to take the Bastian+Skoog David Katz Rishi Tea Michaeli Hansen Heart of Mary Kenneth & Shelley Beeby Lucy Koelle Royal Coffee lead on improving life for their families and communities, Bill Hayden Sisters of St. Francis of Philadelphia Joan Catherine Braun Shade Keys Little Salesforce.com instead of just receiving temporary aid. They are also Lauren Hayes St. Joseph Female Ursuline Thomas & Elizabeth Bullock Jim & Mary Lohr Salesforce.com Foundation passionate about the environmental benefits of Fair Trade, Elysa Hays Academy, Inc. Caroline Blanton Thayer Trust David Ly Samovar Tea Lounge Julie Helou Viva Investments Company SA such as deforestation prevention, conversion to organic Marin Community Foundation Chris & Liz Lyser SEBRAE Jonna Hensley & Dylan Hawhee agriculture and restriction of GMO use. Michael Conroy & Lucy Atkin Jocelyn Mini Jerry Hoff 42 TRANSFAIR USA ANNUAL REPORT 2009 Financial Summary 2009 Revenues TransFair USA Statements of Financial Position for the Years Ended December 31, 2009 and 2008 Trade show support 0.2% ASSETS 2009 2008 Other income In-kind donations Current assets: 1.4% 2.4% Cash and cash equivalents $1,299,168 $2,243,986 Investment, at market value $765,822 $310,898 License fees receivable, net of allowance $1,754,970 $1,261,467 Grants receivable $1,237,672 $1,027,500 Prepaid expenses and Other receivables $322,588 $181,012 Grants and Total current assets $5,380,220 $5,024,863 contributions Property and equipment, net $286,424 $278,443 27.4% Deposits $50,350 $76,787 Long-term grant and contributed revenue $715,000 $505,000 License fees Total assets $6,431,994 $5,885,093 68.5%

LIABILITIES AND NET ASSETS Current liabilities: Accounts payable $211,169 $226,115 Accrued liabilities $817,632 $544,349 Current portion of notes payable $70,000 $54,000 Total current liabilities $1,098,801 $824,464 Long-term liabilities: Grants and Contributions Trade Show Support Notes payable, net of current portion $5,220,000 $5,290,000 License Fees Other Income Accrued lease incentive $192,407 $191,478 In Kind Donations Total long-term liabilities $5,412,407 $5,481,478 Net assets surplus (deficit): Unrestricted ($2,347,479) ($2,278,656) Temporarily restricted $2,268,265 $1,857,807 2009 Expenses Total net assets surplus (deficit) ($79,214) ($420,849) Fundraising Total liabilities and net assets $6,431,994 $5,885,093 6.3% Management and TransFair USA Summary of Activities for the general Years Ended December 31, 2009 and 2008 13.2%

REVENUES AND SUPPORT 2009 2008 License fees $6,881,181 $5,757,709 Grants and contributions $2,752,477 $3,273,512 In kind donations $245,712 $189,288 Trade show support $21,060 $41,348 Program Other income $121,177 $70,673 80.5% Net unrealized/realized loss on investments $19,087 ($19,035) Total revenue and support $10,040,694 $9,313,495

EXPENSES: This annual report was printed by a FSC Program $7,809,173 $7,299,987 The information on the adjacent page is Photo credits summarized from the TransFair USA financial Didier Gentilhomme, Christof Krackhardt, Certified printing company and only paper Management and general $1,280,896 $1,109,534 statements which are audited by Bregante Simon Rawles, Frédéric Raevens, Tabitha that meets the internationally recognised Fundraising $608,990 $656,984 & Company LLC. Copies of the completed Otwori, Jenna Payne, Gregor Dicum, Nicolas FSC Principles and Criteria of Forest Total expenses $9,699,059 $9,066,505 Program Fundraising audited financial statements are available Gauthy, Linus Hallgren, Kennet Havgaard. Stewardship has been used. Net change in assets $341,635 $246,990 Management and upon written request. General TRANSFAIR USA

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