ANNUAL REPORT 2020 Max Havelaar Foundation (Switzerland)
BECAUSE IT’S IMPORTANT TO ME
Photo: Patricio Frei / Fairtrade Max Havelaar “In these difficult times solidarity is needed above all”: Television accompanies Renato Isella on a visit to a market partner.
THE CRISIS AS AN OPPORTUNITY This is particularly the case when it comes to communication. The Coronavirus pandemic has turned the spotlight on the precarious living conditions of those in developing countries. We were all set for a strong campaign year in 2020: doing the rounds of the fun runs with our “Empower Station”; rolling out a large-scale poster campaign in trains, buses and trams – and, not least, organising a tour of Fairtrade farmers and workers for media content creators. But Coronavirus changed all that. All plans were undone in one fell swoop. However, there was an urgent need for information. Fairtrade Max Havelaar responded straight away: On a dedicated website, we collected stories, voices and analysis that shed light on how the Coronavirus pandemic was affecting our farmers. It quickly became apparent that for the poorer populations in developing countries, this pandemic is far more devastating and deadly than it is for us. Our Managing Director, Renato Isella, launched a powerful appeal to consumers and market partners: “In these difficult and uncer tain times, one thing is needed above all, and that is solidarity! Solidarity between the young and the old, but also solidarity between us over here and less fortunate people elsewhere.” Although in the first few weeks we were mostly hearing cries of desperation, as the months went on, the reports became ever more encouraging and hopeful. In Ecuador, for example, the Fairtrade banana producers were distributing unsold bananas among those in need. In Pakistan, the sports-ball stitchers started to produce masks which they donated to people who needed them. In Africa, cooperatives used their Fairtrade Premiums to book broadcasting slots on local radio stations to raise aware-ness of the pandemic among the population, and to educate
2 Communication and Marketing
them about what protective measures they themselves could take. Alongside our communications about our farming families and workers in the developing world, we also supported our market partners at home with our communication efforts. For example, we actively raised awareness on social media channels about the takeaway offerings of our Fairtrade gastronomy partners and about the possibility to order Fairtrade flowers online. Focus in the media Understandably, the public media here were focussed on Coronavirus with an emphasis on Switzerland. Nevertheless, we con sistently managed to initiate relevant press reports. Before the pandemic, the spotlight had been very much on the 200th birthday of Eduard Douwes Dekker, the author who created the fictional hero “Max Havelaar”. The highlight came in the autumn: The Swiss TV broadcasting company SRF’s programme on economic matters came to our offices and filmed our Managing Director Renato Isella at work for two days, as well as visiting some of our market partners. The result was a six-minute portrayal of Fairtrade in its many facets. On the podium as a top brand Market research once again showed that Fairtrade was still very much “in vogue” in society and that consumers have a great deal of confidence in Fairtrade Max Havelaar: In Switzerland’s major market study, the “Havas Brand Predictor”, the 2020 report saw Fairtrade Max Havelaar taking yet another leap forward. In terms of the “Popularity” indicator we were ranked no. 3 out of more than 420 top brands!
Photo: Simone Orsinger / Fairtrade Max Havelaar The lockdown led to a boom in sustainable products: A backpack filled with Fairtrade provisions.
FURTHER GROWTH IN TURBULENT TIMES Fairtrade products once again grew in importance in 2020. Turnover rose by 5.6%. More and more partners are getting involved above and beyond certification. The Coronavirus pandemic had a significant impact on the Swiss Fairtrade market in 2020 and led consumers to change their purchasing behaviour. The lockdown saw sales of sustainable products booming. Demand increased for Fairtrade products, particularly in the retail sector. Especially worthy of note are storecupboard ingredients such as dried fruit and nuts, as well as fresh fruits and confectionery (including biscuits and ice cream). Reduced sales were seen primarily in flowers and plants due to the mandatory closing of flower shops in the spring. Reduced turnover in the gastronomy sector due to Coronavirus had a negative impact on certain Fairtrade products, in particular on coffee, fruit juice and baked goods. This decline was more than compensated for by the growth in the retail sector, however. Overall, the turnover of Fairtrade products increased by 5.6% to around 860 million Swiss francs.
Coop further raises wages and incomes Coop’s past commitment to Fairtrade has already played a major part in improving the lives of people in developing countries. In 2020, Coop went one step further. In collaboration with Fairtrade Max Havelaar, Coop further in creased the incomes of small-scale farmers and workers on Fairtrade banana plantations in the Dominican Republic and in a cocoa cooperative in Ghana, thus bringing these pro ducers ever closer to a living income and living wage. Coop is contin uing its efforts in Ghana (for cocoa) and Honduras (for coffee) to secure living income for Fairtrade farmers. Aldi invests in Fairtrade Flower Programme In the flower growing sector, what the Fairtrade Standards are targeting primarily are improvements in worker protection and safety, and freedom of association. In spite of its stringent specifications, however, Fairtrade has not so far been able to cover every aspect of sustainability.
The Coronavirus crisis has also shown us the importance of grass-roots support. To enable companies to help small-scale farmers and workers In 2020, Aldi Suisse therefore decided to in developing countries in ways that go Turnover: CHF 860 million invest in a Fairtrade rose programme. The beyond certification, Fairtrade Max Havelaar Growth: 5.6 % aim of the programme is to make cooking expanded its portfolio of services. The new Per capita: CHF 99 stoves available to employees that produce additions included programmes, supplysignificantly less smoke thanks to the use of chain services, and a holistic approach to Premium: 12.2 million dollars briquettes. This means that the air is healthier securing sustainable living incomes and and less polluted, less carbon dioxide is wages. Below are two examples of this from produced, and the women no longer have to spend time and the past year: effort going in search of firewood. This programme therefore covers an area that the Fairtrade Standards do not.
3 Market report
OUR SERVICES TO COMPANIES
ZERTIFIZIERUNG CERTIFICATION
What we offer We enable companies to trade under Fairtrade terms and reward those who do so with the right to display the Fairtrade label on their products.
Added value for you Achieving impact You increase the value of your products by using sustainably produced raw ingredients from empowered small-scale farmers and workers. Fairtrade has sustainably positive effects in the areas of economy, ecology and society.
Example: Nurturing the small-scale farmer Big corporations are dominating the market for orange juice and their large plantations are squeezing the small-scale farmers. However, former fruit pickers were able to buy a small amount of land with the help of Fairtrade, and come together to found the Coopersanta cooperative. Farmer Neia Aguar, for instance, now owns five hectares. She farms her plot of land with a great deal of pride, and is moreover benefiting from the Fairtrade Premium: The cooperative offers her training, as well as help with transporting the heavy sacks. All this means that Neia Aguar is improving her life by her own efforts!
4 Our services to companies
Risk management You can rely on one of the strictest and most trustworthy independent certification schemes out there. Compliance with the Fairtrade standard is independently moni tored by the ISO-accredited certification body Flocert. All of the steps along the supply chain are involved in the Fairtrade process at a contractual level. This creates transparency. Positioning Take advantage of the positive image that this well-known label enjoys among your customers. Fairtrade is the ethical label with the highest trust and recognition levels worldwide. Market studies demonstrate that brands using the Fairtrade label are seen in a more favourable light. The label enables you to reach new target markets. What is more, customers are prepared to pay a certain amount extra for fairly traded goods.
Photo: Guro Glavin / Fairtrade Norway
Fairtrade Max Havelaar has been standing up for Fairtrade since 1992, with a broad range of products carrying our label. Our history and experience mean that you can trust us to deliver the support you need.
PROGRAMME PROGRA Fairtrade programmes enable your company to have greater impact and to stand out from the crowd.
What we offer Certification of supply chains by an inde pendent assessor is undisputedly an effec tive way to achieve a more sustainable world. However, we cannot realise our vision of fair trading conditions through certification alone. Fairtrade Max Havelaar also provides a range of programmes which give companies the option to get involved through us in specific aspects of sustainability. Semi-standardised programmes Fairtrade Max Havelaar offers you the oppor tunity to be part of an existing programme that suits your needs, thereby achieving additional impact. These programmes are currently available for coffee, cocoa, flowers and bananas. We will develop a tailored programme part nership for you that addresses specific chal-
Example: West Africa Cocoa Programme When agricultural cooperatives are managed better and thus empower their mem bers, they become more sustainable busi ness partners which in turn means that farmers’ incomes increase. This is the idea behind the Fairtrade programme that has been established for over 230 cocoa cooperatives in Ghana and Ivory Coast. The Fairtrade West Africa Cocoa Programme offers train ing, coaching and advice to Fairtrade-certi fied cocoa cooperatives and their members. These measures have enabled cooperatives in Ivory Coast to sell more cocoa on the favourable Fairtrade terms.
In response to the wide spectrum of challenges faced by the companies it serves, Fairtrade Max Havelaar provides a range of services relating to certification and beyond. We look forward to supporting you throughout your supply chain with programmes and advisory services in the area of human rights.
EXPERTISE EXPERTISE
lenges in your supply chain. This applies whether your supply chain is Fairtrade-certified or not.
Added value for you Deepening your impact Do you have specific areas that you focus on in your own sustainability strategy? This is your opportunity to inject added value in areas that are of particular importance to you. Differentiation and communication Use concrete and measurable success stories, to distinguish yourself from the communicatively stand out from the competition. With Fairtrade Max Havelaar, you can rely on an experienced partner.
Photo: Fairtrade Africa
Efficiency Fairtrade Max Havelaar has a broad network of its own resources on the ground. You benefit from the cooperation with a professional organization anchored in the South. This saves you time and money.
5 Our services to companies
Fairtrade Max Havelaar offers consultancy ser vices on the sustainability topics you are inter ested in as they relate to your supply chain.
What we offer In addition to our well-known certification services, we also assist you and your com pany to implement effective sustainability solutions that are tailored to your needs, thereby reducing your supply-chain related risks. This includes services related to every aspect of your supply chain, as well as nonFairtrade sourcing and advice on responsible supply chain operations (e.g. due diligence on human rights compliance).
Added value for you Quality Take advantage of our many years of expe rience and benefit from our professional ser vices. We offer you competent and tailormade advice and support.
Example: Measuring improvements using indicators Nespresso is working together with Fairtrade Max Havelaar to support coffee farmers in the Ara Cahayani cooperative in Indonesia. The company wanted to be able to measure accurately how living conditions were being changed for the farmers. Fairtrade Max Have laar therefore estab lished various rele vant indicators for Nespresso that would allow the company to measure the changes to household income, productivity, coffee qual ity and environmental protection. Fairtrade undertakes an assessment of these indicators every two years in order to be able to deter mine the impacts in an accurate and measurable way. This is just one example of how Fairtrade Max Havelaar services can be tailored to meet the specific needs of our customers.
Trustworthiness Enhance the trustworthiness of your opera tions by working with an independent part ner. Thanks to our high profile and the extensive trust we enjoy among consumers and industry alike, we are your ideal busi ness partner. According to market research (Globescan, 2019), consumer recognition of Fairtrade Max Havelaar is at 89%, while con sumer confidence is at 82% and customer loyalty at 88%. Contextual perspective Understanding the cultural context and the local interrelationships and conditions is allimportant in terms of whether your resources will be deployed successfully and efficiently. Save resources by working together with a professional organisation which is strongly rooted in the local communities in the devel oping world.
Photo: Nick Hall / Fairtrade
AMMES
Allocation of expenses, 2020 Administration and infrastructure
Business Development
10 % Marketing and communication
Direct project support
14 %
15 %
Supply Chain Management
9 %
13 %
13 %
15 %
Contribution to the umbrella organisation Fairtrade International
11 %
Farmer/plantation support and networks
Total: 9.6 million Swiss francs
International cooperation
90 % used for the purposes of the foundation
10 % for administration
FINANCIAL STATEMENTS AND REPORT 2020 In spite of the pandemic, Max Havelaar saw an increase in license income of 3% more than the budgeted figure. The use of free generated capital was reduced further than anticipated. License income rose up to around 8 million francs. This represents a decrease of 7% compared to previous year. This decline was primarily due to the effects of the initial lockdown in the spring of 2020 on the categories of plants & flowers and soft drinks. Other business income includes an extraordinary amount of 1.1 million francs in contributions from other Fairtrade organi sations and from Seco, specifically allocated to the Coronavirus Fund. Operating expenses increased compared to previous year by 4%, largely due to the following: • The mandatory contributions to the international Fairtrade system were paid according to the current agreement. These contributions were lower in 2020 due to corrections to licence fees. • In order to respond quickly to the needs of farmers and plantations in developing countries during the pandemic, we transferred 842,000 Swiss francs that had been made available to us for this purpose by third parties. • Fairtrade Max Havelaar invested 378,000 Swiss francs in projects and programmes run by the farmers and growers we support. As was the case in previous years, our support focused predominantly on banana, coffee and cocoa growers in South America, Africa and Asia. • Personnel costs rose by 90,000 Swiss francs, primarily due to
6 Financial statements and report 2020
additional resources (including hiring a specialist in human rights due diligence). • Administrative expenses went down by 22,000 Swiss francs. The reason for the amount being very similar to that of the pre vious year is primarily that the increase in costs due to upgra ding the office and IT infrastructure was offset by the lower costs of external service fees. • Marketing and communication costs were reduced by one third compared to the previous year. Due to the pandemic, travel was not possible and certain marketing activities were dispensed with. The profit for the period before change to the organisation capital was 115,000 Swiss francs. 463,000 Swiss francs were allocated to tied capital. 272,000 francs were spent on projects and programmes over the course of the business year. The generated unrestricted capital therefore reduced by 76,000 Swiss francs to 5.07 million francs. As in the previous year, the licence fees for the 4th quarter of 2020 will be cleared in the 2021 accounts. We received over 0.3 million Swiss francs prepayments for license fees. Cash and cash equivalents decreased as a result of investments in securities in line with investment guidelines. The financial assets increased by the corresponding amount.
Balance sheet Assets CHF
Profit and loss account Appendix1
Appendix1
31.12.2020 31.12.2019
Current assets
2020
2019
7 983 231
8 591 170
89 666
0
Losses from receivables
1 334
7 052
Income from services
8 074 231
8 598 221
Income from earmarked donations
20 333
433
Income from donations
20 333
433
1 050 000
0
70 584
0
1 120 584
0
346 286
377 387
Total operating income
9 561 434
8 976 041
Contributions paid - mandates and programmes
(841 726)
0
(30 234)
0
(3 918 002)
(3 827 781)
Administration expenses
(901 788)
(923 339)
International cooperation
(2 926 039)
(3 218 903)
(485 904)
(727 171)
(40 349)
(78 877)
License income from third parties
Cash and cash equivalents
4.1
2 989 724
5 349 210
Accounts receivable
4.2
826 078
1 083 685
4.3
1 886 270
1 476 100
5 702 072
7 908 995
4.4
2 372 401
90 053
4.5
160 492
43 807
4.5
19 494
0
2 552 387
133 861
8 254 459
8 042 856
Accrued income
Non-current assets Financial investments Property Intangible assets
Total assets
Liabilities and equity CHF
31.12.2020 31.12.2019
Current liabilities
Income from earmarked mandate contributions Income from earmarked programme contributions Income from contributions Other operating income
Direct costs of services
Trade/services liabilities
Income from services
Personnel expenses 5.1
745 166
871 995
5.2
521 968
187 950
Marketing/communication expenses
Short term provisions
5.3
166 178
116 278
Deferred income
5.4
484 641
918 757
Depreciation of property & intangible assets
1 917 953
2 094 981
Appropriated reserves
277 548
3 768
Liabilities incl. appropriated reserves
2 195 501
2 098 749
Other short-term liabilities
4.5
Operating expenses
(9 144 041) (8 776 070)
Operating result
417 393
199 971
Financial income
44 508
98 315
(73 269)
(67 562)
(28 761)
30 753
Result before change to fund capital
388 631
230 724
Change to fund capital
(273 779)
(433)
Fund result of appropriated reserve
(273 779)
(433)
114 852
230 291
(190 726)
(334.690)
75 874
104.399
Financial expenses Organisational capital Paid-up foundation capital Fixed capital Generated unrestricted capital
Total liabilities and equity
Financial result 6
190 002
190 002
798 796
608 070
5 070 160
5 146 034
6 058 958
5 944 107
8 254 459
8 042 856
7
Annual profit/loss before change to organisational capital
Accounting in accordance with SWISS GAAP FER This annual account was comprehensively reviewed in an ordinary audit by BDO, and found correct. It provides a true and fair view of the assets, financial and income position in accordance with the Swiss GAAP FER and complies with Swiss law and the Deed of Foundation and Foundation by-laws.
7 Balance sheet and profit and loss account 2020
Allocation/use of organisational capital Change to fixed capital Use of free generated capital
1 The full auditors' report and the annual account together with the performance report and all notes can be found at www.maxhavelaar.ch/jahresbericht
COMMODITY & MARKET DEVELOPMENT 2020 1
Sales volumes of the most important commodities
BANANAS 38 296 tonnes -1 % on prev. year
FLOWERS 2 53 848 471 stems -16 % on prev. year
FRUIT JUICES 2 27 566 081 litres -3 % on prev. year
COFFEE 7 231 tonnes -5 % on prev. year
COCOA 6 578 tonnes +8 % on prev. year
CANE SUGAR 9 143 tonnes +5 % on prev. year
4
Sales per product category
Market share
Product
Sales (CHF)
Change comp. to 2019
Confectionery products - Chocolate - Cookies and others Bananas Beverages - Juices - Fruit juices including ice tea - Alcoholic beverages Coffee Exotic fruits - Other fresh exotic fruits 3 - Exotic convenience/tinned products - Pineapples Ice creams Dairy products - Yoghurt - Milkshakes - Miscellaneous items Bakery products Flowers and plants Dried fruits/nuts Rice Composite products Cane sugar Gold Spices Quinoa Spreads - Honey - Other Tea Cotton products Sport balls
145 614 263 115 788 342 29 825 921 115 115 223 91 074 911 66 129 481 24 264 844 680 586 86 641 583 85 068 474 49 471 114 29 436 665 6 160 695 63 672 084 58 178 616 47 231 404 5 731 289 5 215 924 56 607 673 45 261 195 40 482 524 15 090 857 11 989 102 11 189 080 8 071 213 6 645 352 6 115 583 5 962 362 4 180 486 1 781 875 3 566 605 3 094 509 88 615
2.7 % -1.6 % 24.1 % 1.9 % -6.3 % -9.7 % 4.1 % 10.2 % -1.8 % 10.1 % 17.7 % 0.2 % 5.5 % 77.4 % 0.9 % 2.3 % -6.8 % -2.4 % -11.7 % -20.1 % 25.5 % 22.2 % 192.6 % 18.0 % 146.1 % 36.0 % 18.9 % 18.9 % 9.5 % 197.3 % -3.7 % 11.0 % -30.8 %
Total
859 529 823
5.6 %
Cane sugar
92 %
Bananas
56 %
Fruit juices
32 %
Pineapples
31 %
Asian rice
26 %
Chocolate
14 %
Coffee
13 %
Honey
8 %
Tea
7 % 0
10
20
30
40
50
60
70
80
90
100
5
Organic share Tea
83 %
Cotton
71 %
Dried fruits/nuts
64 %
Bananas
61 %
Asian rice
53 %
Coffee
33 %
Beverages
16 %
Cane sugar
15 %
Chocolate
10 % 0
10
20
30
1
40
50
60
70
80
90
Also contains use of commodity in composites products The assignment of products to this category has been revised. The change relates to the adjusted value from the previous year. 3 Among others, avocados, coconuts, limes, mangos, oranges 4 Estimated retail market share based on sales volumes. Source : AC Nielsen 5 Percentage of Fairtrade commodities that also meets organic standards, based on sales volumes. 2
Max Havelaar Foundation (Switzerland) I Limmatstrasse 107 I 8005 Zurich +41 44 278 99 00 I info@maxhavelaar.ch I www.maxhavelaar.ch
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