craf business presentation

7/30/2019 craf business presentation

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Growing the craft business –

options to consider

Lawrence Watson

IFAT Associate, and Lead Consultant

to the Asia Fair Trade Forum,

Shareholder - Citizen Dream



Growing the business

• Craft business is flat or declining – but not

the food business

Why ?



The Fair Trade Journey

Skills

Time

Economic

dependency

Economic

Independency



Skill development must translate into

higher value added products

Low

Med

Hi

Value-added higher price

Development phases



Low

Med

Hi

Different Customers,

Markets – and

probably partners

That means:



Today

Low

Med

Hi

80%20%

0%

…….Charity

Purchase motivation

Existing split



Tomorrow

Low

Med

Hi

…….Charity ……Value……..

Purchase motivation



Different niches –

different partners

Low

Med

Hi

80%

20%

50%

30% ???

20% ???

0%

Potential future split



Alternative Strategies

• World-Shops to retain their niche – with

improvements.





improvements.

• Separate, mainstream niches to be developed to

move up the journey



The Doi Tung Development Project



Doi Tung

Union of Myanmar

93,515 Rai

(150 Sq. km)

Mae Fah Luang

Thailand

Laos



1988



Today



Doi Tung Coffee



Coffee Bean $ 2 Per Kilogram



Roasted Coffee $ 10 Per Kilogram



Arabica (Retail) $20 per Kilogram



Doi Tung Coffee Shop $ 100 per Kilograms



Price per Meter

$ 20



Placemat made from

Vetiver Grass $ 5 per piece



Products in Doi Tung Development

Handicraft Centre



Siam Discovery



The bottom line

• In 16 years the per capita income on the

project has gone from $ 80 pa…….



The bottom line



• ….To $ 800 pa.



The bottom line



• ….To $ 800 pa.

• Are we having a similar effect?





improvements.

• Separate, mainstream niches to be developed to

move up the journey

• Develop the local markets – retail and wholesale



Craft:

• Craft sales are in a crisis – food is not.



Craft:


• Craft mainly limited to the FTO/NGO

network (north and south) – food is no

longer.



Craft:


• Craft mainly limited to the FTO/NGOnetwork (north and south) – food is nolonger.

• Challenge # 1- can the movement (N and S)recognise the crisis – and react?



Old business model

• The business model in craft (not food) is

essentially the same, now as “then”.



The market

• We do not even know the size of the FT

craft market.



The market

• We do not even know the size of the FT

market.

• ….but in Europe it is probably around € 100

million (retail value)



The market

• Conservatively – the mainstream gift

market in Europe is around € 6 billion



The market


market in Europe is around $ 6 billion

• Exports from Vietnam alone are $ 400

million = RSP $ 2.4 billion



The market


market in Europe is around $ 6 billion

• Exports from Vietnam alone are $ 400

million = RSP $ 2.4 billion

• India is $ 1.5 billion = RSP 9 billion



Some alternatives

• Northern FTO’s finance and set up a

separate “Craft Direct” wholesaler to

mainstream.



Some alternatives

• Northern FTO’s set up a “Craft Direct”

wholsaler to mainstream.

• The “up-market” Fair Trade private gift

shops or mainstream wholsalers




• .





improvements.





improvements.


• Private retail initiatives





improvements.

• Develop the local markets – retail and wholesale• Private retail initiatives

• Private or FTO-financed “Craft-Direct”

wholesaler - labeled products to mainstream

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