An investigation of Fair Trade product knowledge, beliefs, experiences and buying intentions of Generation Z in the US

• DOI: https://doi.org/10.13169/jfairtrade.3.2.0034
• Pages: 34-52
• Published date: 30 March 2022
• Date: 30 March 2022
• Author: Zoia Pavlovskaia,Ali Kara
• Subject Matter: fair trade,Generation Z,theory of reasoned action,fair trade purchase intentions

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An investigation of Fair Trade product knowledge, beliefs, experiences

and buying intentions of Generation Z in the US

Zoia Pavlovskaia and Ali Kara

Zoia Pavlovskaia is a Lecturer in Business at the Penn State University, Brandywine campus. Prof.

Pavlovskaia teaches courses in marketing and international business. She is a member of the Sustainability

Committee and serves as a Fair Trade representative on campus. In addition, she is involved with the Fair

Trade campaign in Media, ‘America’s First Fair Trade Town’, PA.

Ali Kara is a Professor of Marketing at the Pennsylvania State University, York Campus. He also serves

as the Discipline Coordinator of Business and Economics Division, University College. Dr Kara was the

recipient of the 2019 Milton S. Eisenhower Award for Distinguished Teaching. He has also received the

York Campus James H. Burness Award for Excellence in Teaching (2016) and Academic Advising Award

(2010). Dr Kara has published extensively in academic journals such as Journal of Marketing Research,

Journal of Advertising, International Journal of Research in Marketing, European Journal of Operations

Research, Omega, Journal of Small Business Management, Industrial Marketing Management, Journal

of Marketing Theory and Practice, Journal of Global Marketing and International Journal of Logistics

Management. He is a longtime member of the Graham Entrepreneurial Leadership programme at Penn

State York. Dr Kara teaches courses in marketing and international business.

Abstract

The Fair Trade movement is an alternative way to conduct international and domestic business

by trying to improve trading conditions of disadvantaged producers around the world through

consumer actions. Consumers can support the movement by purchasing FT certified products,

which confirm that products meet ethical principles and environmental standards that are

set in accordance with the requirements. However, FT product sales in the US have been

lagging in comparison to the FT product sales in Europe. For instance, per capita consumption

of the value of FT products was approximately €3 in the US in comparison to €34 in the UK

(Fairtrade International, 2016). This study investigates several variables that can influence

Fair Trade consumption, and, specifically, the effects of consumers’ knowledge, beliefs and

past experiences on their purchase intentions of Fair Trade products among urban youth

consumers in the US. Using the Theory of Reasoned Action as the conceptual framework, data

were collected from 154 subjects using an online survey. The results indicate that consumer

knowledge about FT has significant positive influence on their purchase intentions, but this

relationship is mediated and strengthened by their beliefs and past behaviour. We offer various

implications of these findings to FT businesses and organisations.

Keywords: fair trade; Generation Z; theory of reasoned action; fair trade purchase intentions

Introduction

Despite the recent popular trends of anti-globalisation around the world, economies have become more integrated

and interdependent. For instance, the global trade value of exports throughout the world amounted to

DOI:10.13169/jfairtrade.3.2.0034

An investigation of Fair Trade product knowledge, beliefs, experiences and buying intentions

Zoia Pavlovskaia and Ali Kara

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approximately US$19 trillion in 2019, which was around US$6.45 trillion in 2000 (Statista, 2021). The rise in the value

of goods exported around the world reflects developments in international trade, globalisation and advances in

technology. Furthermore, a significant proportion of apparel (97%) and shoes (almost all) are made outside the US

(Bhattarai, 2018; Cline, 2021), indicating how integrated global trade is in consumers’ lives. Most often, developed

countries, such as US, depend on resources from the developing countries, sometimes with little concern for the

conditions of the producers in those markets. Although the overall global value of trade will continue to increase,

globalisation is argued to contribute to the growing wealth inequality around the world. Fair Trade (FT hereafter) is

considered by non-profit FT organisations around the world to help to restore the balance and offers an alternative

way that international businesses can participate in global trade. FT is a movement to help the farmers and workers

in developing countries to get paid fairly and have access to the resources (i.e. compensation, credit, technical

assistance, etc.) needed to provide sustainable production (World Fair Trade Organisation, 2020).

The FT movement emerged in the 1950s and evolved over time, getting more attention starting the early

1990s. The FT movement now includes 1.7 million producers in 73 different countries. FT products are sold in 158

countries, and global retail sales for FT products reached an estimated €9.8 billion in 2018 (Fairtrade

International, 2019). The FT movement in the US is led by Fair Trade USA, which is a non-profit organisation that

develops standards, certifications and labelling for FT products to promote ‘sustainable livelihoods for farmers and

workers and protect the environment’. Fair Trade USA worked with 46 countries, had developed partnerships with

1,250 companies and provided an estimated cumulative financial benefit of $105 million to farmers and workers in

2018 (Fair Trade USA, 2018b). FT products have unique social and environmental benefits that are assumed to

attract innovative or initiator consumers, consumers who play an initiating role in the communication and diffusion

of new brands and products (Foxall, 1989), based on per capita consumption of FT products in comparison to

European consumers. The FT concept has been closely associated with social responsibility, cooperative business

relationships, protecting the environment and achieving sustainability. FT principles are known to align well with

many of the Sustainable Development Goals (SDGs) and promote cooperation among trade participants to ensure

a fair distribution of economic benefits Hence, FT is closely related to various actions taken by participants to create

better trading conditions for disadvantaged producers around the world through promoting awareness and

advocacy (Krier, 2007) and encouraging consumer actions in developed countries to achieve such goals.

Although the FT products are better recognised and are widely available in some European countries, awareness

and availability of them in the US have been limited (Hira & Ferrie, 2006). In 2017, UK and Germany were world

leaders with an estimated retail sales value of Fairtrade International certified products of €2.01 billion and €1.33

billion respectively, followed by the US at €994.12 million (Statista, 2020). Moreover, there are 427 FT towns in the

UK alone but less than 50 (47) FT towns in the US (Fair Trade Towns, 2021). Accordingly, one could argue that the FT

concept has attracted limited attention from researchers and policy makers in the US. Although FT logo is

recognised by over 60% of people in the US (Fair Trade USA, 2018a), consumers’ interest in purchasing FT products

have been limited. In addition, most international business courses and economics textbooks published in the US do

not allocate sufficient (if any) coverage to the FT concept. Research on FT has mainly been closely related to ethical

decisions and consumer activism behaviour towards consumption of the ethical products. Some studies question the

economics of FT (Dragusanu, Giovannucci & Nunn (2014) while others argue that higher prices are usually an

important impediment preventing consumers from buying FT products (Hainmueller, Hiscox & Sequeira, 2011;

Pedregal & Ozcaglar-Toulouse, 2011; Wright & Heaton, 2006). According to Fair Trade Certified, millennials and

Generation Z (Gen Z hereafter) outpace others in their desire for FT certified products. However, the FT product

consumption intentions of this group are a relatively under-investigated research area in the US. Hence, the

objective of this study is to investigate Gen Z’s purchase intentions of FT products in the US. More specifically, this

study investigates Gen Z’s (1) knowledge and awareness levels of FT products, (2) beliefs and (3) how previous FT

purchase experiences influence their intentions to buy such products. The results of this study are expected to

provide additional insights and fill the gap in the literature about this specific target market, with respect to the role

of FT perceptions and buying intentions, and to provide suggestions for promoting FT products in the US.