Latin America: Ethical consumerism in Argentina – Big steps by small firms

Oliver Balch, Latin America Editor 11 Jan 07
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Oiling the wheels of micro-entrepreneurship
» Ethical consumerism: scaling new heights in Latin America » Argentinian unions, NGOs and consumer groups urge action on ethics
Ethical consumerism remains in its early days in Latin America, but two young companies have much to teach their bigger rivals when it comes to responsible marketing
Most of the 14 workers at shoemaker Desde el Pie are either immigrants or from minority ethnic groups. They used to work 15-hour days and unpaid overtime was common. When their factory went bankrupt five years ago, they decided to take responsibility for running it themselves. Their ethical credentials are first-class. All management decisions are made at the weekly workers’ assembly meeting and all the employees take home the same salary. They only use leather from free-range cows.From their factory in a poor neighbourhood of Buenos Aires, they are now shipping high-quality work boots for sale in the US. Using the internet to market and sell their products enables them to reduce their advertising and branding costs. This ensures they can receive a fair price for their labour.But Desde el Pie is not just another fair trade producer. It aims not only to change the way manufacturers make their products, but also to transform how consumers buy them.
Advertisement“The frustrating thing about fair trade is that the consumer often has no idea how much goes to the factory,” says Brendan Martin, co-founder of The Working World, a micro-finance organisation that supports employer co-operatives such as Desde el Pie. The Argentine shoe manufacturer provides a clear breakdown of costs alongside the final price tag. Online buyers know upfront how the $48 they pay for a pair of leather work boots is divided up: $4.50 goes on import duties, $7.50 on transport and marketing costs and $6 towards a joint co-operative fund. The remaining $30 returns to the producers.

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Martin calls the emphasis on transparent marketing an experiment in “revelation”, as opposed to “conflation” – he says too many advertising campaigns confuse consumers about the value chain.Another Argentine exporter looking to push the boundaries of responsible consumerism is Interrupcion. Established by a group of young professionals after Argentina’s 2002 economic crash, this Buenos Aires-based non-profit organisation recently started selling artisan products into the US. Again, Interrupcion aims not simply to service its consumers, but also to educate them. All its products, which include homemade jams and olive oil, have on-pack details about the micro-entrepreneurs behind the brand. This is backed up with a comprehensive web-based marketing campaign. In addition, Interrupcion employs sales assistants in the major stores where its products are sold. “For people to understand what we are doing, we need to talk to consumers one-to-one,” says Rafael Goldberg, head of Interrupcion’s US arm. The strategy has enabled this small exporter to reach 40,000 customers over the past three months. These small, ethical players are yet to dent Latin America’s fast-moving consumer goods market. Their production capacity is limited and domestic demand for their ethical goods remains small. That could all change. Before it does, larger retailers could learn a trick or two about transparent, honest marketing. Like Interrupcion’s Patagonian Berries Jam, once consumers get a taste for it, it proves a difficult habit to break. Useful

links:http://www.theworkingworld.org/http://www.interrupcion.net/