Not Another Preachy Trade Story, With Paul Rice, Founder of Fair Trade USA

Summary

From the Ground Up: Episode Summary Episode Title: Not Another Preachy Trade Story, With Paul Rice, Founder of Fair Trade USA
Release Date: May 19, 2025
Hosts: Diana Ransom and Christine Lagorio-Chafkin

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Introduction to Paul Rice and Fair Trade USA

In this episode of From the Ground Up, hosts Diana Ransom and Christine Lagorio-Chafkin engage in a compelling conversation with Paul Rice, the founder of Fair Trade USA and author of the book Every Purchase Matters. Paul shares his extensive experience in establishing and leading Fair Trade USA, a nonprofit organization dedicated to certifying companies that employ sustainable business practices and ensuring the ethical sourcing of products.

Origins of the Fair Trade Movement

Paul Rice's journey into the world of fair trade began at the age of 22 when he traveled to Nicaragua in 1983. Initially intending to stay for a year, Rice ended up living there for 11 years, immersing himself in sustainable farming practices and working closely with small farmers. His efforts culminated in the creation of Nicaragua's first fair trade cooperative, which empowered 3,000 families by providing fair wages, improving living conditions, and promoting environmental sustainability.

Paul Rice [07:07]: "I wanted to save the world. I wanted to work with farmers and fight global poverty."

Building the Business Case for Sustainability

Upon returning to the United States in 1998, Rice faced the challenge of convincing American companies to adopt fair trade practices. Recognizing that sustainability needed to align with business interests, he focused on demonstrating the "enlightened self-interest" of companies. By presenting fair trade as a means to enhance supply chain transparency, improve product quality, and foster consumer loyalty, Rice successfully partnered with pioneering brands such as Starbucks, Patagonia, and Ben & Jerry's.

Paul Rice [05:54]: "There needed to be a business case. And so I've spent the better part of the last 26 years building that business case so that companies could find self-interest, enlightened self-interest in fair trade."

Consumer Trends and the Influence of Gen Z

A significant portion of the discussion centers around the evolving consumer landscape, particularly the impact of Gen Z and Millennials. These younger generations prioritize sustainability, ethical sourcing, and corporate responsibility in their purchasing decisions. Rice emphasizes that "every purchase is a chance to vote with our dollars for a better world," highlighting the power consumers wield in driving positive change.

Paul Rice [04:56]: "Every product that we choose is a chance to vote with our dollars for a better world."

Combating Greenwashing through Certification

With the rise of greenwashing—where companies deceptively market their products as environmentally friendly—Fair Trade USA differentiates itself through rigorous certification standards and independent audits. This ensures authenticity and builds consumer trust, allowing consumers to make informed choices without falling prey to misleading claims.

Paul Rice [15:33]: "There is greenwashing out there, and I think discerning consumers are wary of that and are looking for evidence."

Impact of Tariffs and Trade Wars on Sustainability

The episode delves into the detrimental effects of tariffs and ongoing trade wars on both American businesses and global sustainability efforts. Rice argues that tariffs not only inflate prices for consumers but also strain international supply chains, leading to reduced investments in sustainable practices. This climate poses significant challenges for smaller farms and ethical producers who rely on fair trade to sustain their livelihoods.

Paul Rice [23:33]: "Tariffs are dumb. Tariffs are just dumb. Ask any economist. They're all saying tariffs are inherently inflationary and it's going to raise prices for consumers."

Success Stories: Starbucks, Patagonia, and ELF Beauty

Rice shares notable examples of companies that have successfully integrated fair trade practices without compromising profitability. Starbucks embraced fair trade to ensure high-quality coffee beans and supply chain transparency. Similarly, Patagonia and J.Crew led the apparel industry by prioritizing ethical sourcing. A standout success story is ELF Beauty, which incorporated fair trade into over 80% of its product lines without increasing prices, demonstrating that sustainability can coexist with affordability.

Paul Rice [27:26]: "They didn't raise prices. They have a stronger consumer following, their sales have grown so dramatically that they are able to essentially incorporate those extra costs of sustainability into their product."

Advice for Entrepreneurs and Businesses

For entrepreneurs looking to adopt sustainable practices, Rice advises integrating ethical sourcing from the outset. Understanding consumer demand and leveraging available resources can help businesses build responsible supply chains that resonate with modern consumers. He highlights the importance of aligning sustainability with business objectives to create mutually beneficial outcomes for companies and the communities they serve.

Paul Rice [13:59]: "Supply chain responsibility and sustainability shouldn't be an afterthought for any entrepreneur starting a business right now."

Future Predictions and Final Thoughts

Looking ahead, Rice is optimistic about the continued growth of the fair trade movement. He anticipates that consumers will increasingly "vote with their wallets," choosing sustainable and ethically sourced products even in challenging economic times. Despite current geopolitical tensions and trade issues, the momentum behind sustainable consumerism is poised to strengthen, fostering a more responsible and equitable global marketplace.

Paul Rice [30:37]: "Small acts of change, small acts of compassion and kindness for the world... that is going to grow."

Conclusion

This episode of From the Ground Up underscores the pivotal role of fair trade and sustainable practices in today’s business environment. Paul Rice’s insights reveal a landscape where consumer awareness and ethical corporate behavior drive meaningful change. By prioritizing sustainability, businesses not only contribute to social and environmental well-being but also secure their own long-term success.

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Notable Quotes:

• Paul Rice [04:56]: "Every product that we choose is a chance to vote with our dollars for a better world."
• Paul Rice [05:54]: "There needed to be a business case. And so I've spent the better part of the last 26 years building that business case so that companies could find self-interest, enlightened self-interest in fair trade."
• Paul Rice [15:33]: "There is greenwashing out there, and I think discerning consumers are wary of that and are looking for evidence."
• Paul Rice [27:26]: "They didn't raise prices. They have a stronger consumer following, their sales have grown so dramatically that they are able to essentially incorporate those extra costs of sustainability into their product."
• Paul Rice [30:37]: "Small acts of change, small acts of compassion and kindness for the world... that is going to grow."

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This comprehensive summary encapsulates the key discussions and insights from the episode, providing valuable takeaways for listeners interested in sustainable business practices and the fair trade movement.

Transcript

[Diana Ransom]

Qualified Digital is the premier full service customer journey experience agency. To find out how we can help your digital B2B and B2C offerings shine brighter, contact us at qualifieddigital.com QD powers the fuzzy app which verifies online profiles in seconds. Your digital gut check for safer real life connection. Find it in the app store [e-mail].

[Christine Ligorio Chavkin]

Diana Christine, what's something that you bought that you just totally didn't need?

[Paul Rice]

I mean, I think I do that all the time. I have things in my closet. I am not proud of this, but I have things in my closet that still have tags on them.

[Christine Ligorio Chavkin]

Well, you can resell them then, right?

[Paul Rice]

I guess. Yeah. But no, it's like, why did I buy that?

[Christine Ligorio Chavkin]

Are they special occasion outfits? Scuba gear like me?

[Paul Rice]

Yeah, actually there's really, there's definitely like snow that I was like, oh, my daughter will want this this winter. And then just. We didn't like go outside.

[Christine Ligorio Chavkin]

Snow or.

[Paul Rice]

It wasn't a, wasn't a crazy snow year. So. Yeah, I mean there's things like that that you buy as a parent as just like to be ready. But there's stuff that I've bought for myself that I thought I would wear, but I haven't. It just sits in the closet.

[Christine Ligorio Chavkin]

You heard this from a fancy Manhattan lady. Never goes out, never has anywhere to wear.

[Paul Rice]

Right.

[Christine Ligorio Chavkin]

Her stuff. Stuff.

[Paul Rice]

A mother of two. So yeah, yeah, yeah. No, it's. It's a wonder I actually get myself dressed in the morning, frankly. This is from the ground up. I'm Diana Ransom.

[Christine Ligorio Chavkin]

And I'm Christine Ligorio Chavkin.

[Paul Rice]

Today's episode. Not another preachy trade story.

[Christine Ligorio Chavkin]

So, Diana, I recently sat down with Paul Rice who is the founder of Fair Trade usa, which is a nonprofit that certifies companies that employ sustainable business practices and it certifies the products that they sell. Like I contain fair trade chocolate. Right. He just published a book called Every Purchase Matters. And in it he tells the story of how the whole thing, the whole movement came to be.

[Paul Rice]

Yeah, I remember Fair trade. Fair trade has been around forever.

[Christine Ligorio Chavkin]

It has 26 years. I think he was at the helm of his nonprofit and. And it all started when he was about 22 years old and traveled to Nicaragua. He started working.

[Paul Rice]

Was he in the Peace Corps?

[Christine Ligorio Chavkin]

I don't recall what brought him there, but he wanted to learn about sustainable farming and he ended up creating something of a co op of different farms so that they could work together to control their pricing better and get better deals for their. You Know what ended up being international trade and that model, he thought, okay, I can improve the lives of farmers on the ground. I can continue to improve the working conditions at the farm, continue to improve the community as it grows. And then after 11 years, he came back to the US and he had to start convincing US companies to spend money essentially on this movement, these goods.

[Paul Rice]

Well, he seemed to have a lot of success. I mean, Fair Trade was sort of everywhere for a long period of time.

[Christine Ligorio Chavkin]

Yeah, it was and it sort of still is. And you'll notice, you know, on the, on grocery store shelves is especially in like coffee aisles. Chocolate, fish increasingly and apparel now too. Cotton and sustainably sourced retail goods are everywhere. But you'll see like Rainforest alliance, you'll see Equal Exchange. Right. There's a lot of different nonprofit and B Corp sort of adjacent certifying bodies that are non governmental and this is just one of them. But Paul's been, I mean he's been around for a while and he, I was basically dying to ask him, like, what have you observed in terms of tariffs and this new trade war? Right.

[Paul Rice]

I would think his body of knowledge seems like more helpful now than ever.

[Christine Ligorio Chavkin]

Yeah, absolutely. And he's been in this since NAFTA and a lot of domestic manufacturing going abroad and has seen that shift and seen the kind of increasing need for this sort of activism. But also, I mean, I was so curious, like what have you seen in terms of consumer shifts? I see just a lot of, a lot more buying like today than ever before. And I. So I was really curious to ask him about Gen Z and what he thinks they really value.

[Paul Rice]

Oh, I can't wait to hear it.

[Christine Ligorio Chavkin]

Paul, your new book is called Every Purchase Matters, which sounds like quite an enlightened take in this world that so often just feels like everything is hyper consumption, that that's the norm. Give me the quick two minute version of why every purchase matters.

[Paul Rice]

Yeah, so I love that question. Because if you look at all of the sustainable products out there today, products that are organic or fair trade or non GMO or certified by Rainforest alliance, all the different labels and all the different expressions of what we might call responsible sourcing, what we realize is that every product that we choose is a chance to vote with our dollars for a better world. Every product is sourced and produced in a way that is either responsible or not. And so what we've seen over the last 20 years is a real growth in this market and a chance for us to encourage companies to do more through our purchasing decisions.

[Christine Ligorio Chavkin]

And what about from the corporate side of it, as a company that puts these kind of labels, you know, has made these decisions regardless of, you know, which decision or multiple ones they have made, to have their products be sour responsibly and sustainably. Like, what does it mean for a company?

[Paul Rice]

Clearly there are companies out there that were founded by values driven founders who see business as a vehicle for changing the world, right? Think Patagonia, think Ben and Jerry's. There are those companies out there. But most companies have to find a business case for sustainability. And therefore enlightened self interest is what I think we need to engineer, right? A way for businesses to be more successful by sourcing and producing in a more sustainable way. And that's kind of what gets me up every day, is figuring out how to create that win win scenario where farmers and workers around the world get a better living, the environment gets protected, companies get to make more money, and consumers feel delighted with the impact of the products we choose.

[Christine Ligorio Chavkin]

Fantastic. I want to ask you more about the enlightened self interest in just a minute, but let's back up a bit. I want to hear your story. A lot of your experience from that you bring to the book comes from your experience founding and running Fair Trade usa. Let's back up to when you, before it even began, you know, where did the seeds of the idea come from? And tell me your experience there.

[Paul Rice]

So, you know, my first big life experience was going to Nicaragua at the tender age of 22, right out of college, because I wanted to save the world. I wanted to go work with farmers and, you know, fight global poverty. And so I thought, well, getting some field experience would be the best way to do that. So I went to Nicaragua in the summer of 83. Thought I would stay for a year. I stayed for 11 years. I was way up in the mountains in the coffee lands, working with small farmers and ended up hearing about fair trade. Quite a ways into my Nicaragua journey, I heard about fair trade. There were a couple of companies here in the US Like Equal Exchange. There were a lot of companies in Europe doing this. And their whole premise was traded, not aid. Their philosophy was, farmers don't need our charity. They just want a fair price for their hard work and for the harvest that they produce. So I started Nicaragua's first fair Trade co op. I ran it for four years. It was amazing in the sense that our farmers were able to make enough money to do remarkable things like eat three times a day and stay on the land as opposed to hitting the road to head north and keep their Kids in school, I say remarkable, a little bit tongue in cheek, but we take things for granted that families around the world struggle with, like nutrition and housing and education and health. And so I lived this journey with 3,000 families of improving lives and protecting the environment through a market based approach. Not through charity, not through government intervention, but through a market based approach. And it changed my life. It led me to want to come back to the US and start the fair trade movement, which is what I did in 1998.

[Christine Ligorio Chavkin]

Yeah. So 1998 you moved to California and you start pitching companies on this vision, right? This idea that they can both do good for the world and do it in a way that's sustainable for their business, for their bottom line. How did you. I mean, I imagine that's kind of a difficult conversation to have because you're just at your core, you're trying to get them to do the right thing, right?

[Paul Rice]

Yeah, yeah. There were some pioneering Companies in the 90s that were led by values driven leaders that had a vision of business that and help change the world. So Ben Cohen and Jerry Greenfield at Ben and Jerry's Great example, or Yvon Chouinard at Patagonia.

[Christine Ligorio Chavkin]

I think all these folks have been on the COVID of Inc. Before. So yes, you know them well. Yes.

[Paul Rice]

So I first sought out those pioneers of what we might call conscious capitalism and sought advice and then developed a strategy to start reaching out to more mainstream companies. And it wasn't going to work. I knew from the get go it wasn't going to work to pitch fair trade as, hey, that's the right thing to do, right? Like pay your farmers more money because it's the right thing to do. I mean, it is the right thing to do. But there needed to be a business case. And so I've spent the better part of the last 26 years building that business case so that companies could find self interest, enlightened self interest in fair trade and things like it, right?

[Christine Ligorio Chavkin]

And make the case to their own shareholders, whatever form that takes, private company, public company, whatnot.

[Paul Rice]

So let me give you an example of that. The coffee industry was just starting to shift from fold to Starbucks, if you will, from nasty coffee in a can to higher priced, higher quality coffee that we could enjoy at a cafe or at home. That was happening in the 90s. Coffee companies at that time realized that to be able to delight the consumer with high quality coffee, they needed to make sure that the farmer got enough money to do that. Like if you're a coffee farmer and you're struggling to put food on the table, you don't have the resources to produce quality. On the other hand, if you're getting more money, you can lean in and produce higher quality. You can produce in a more environment, environmentally sustainable way. And so for companies like Starbucks, who I signed in year two of the venture, they saw in fair trade, a way to get greater transparency in the supply chain and make sure the money trickled down, if you will, to the farmers so that they could continue accessing high quality beans.

[Christine Ligorio Chavkin]

Yeah, and the coffee market is really competitive. I read in your book. It also seems to make the supply chain sturdier for individual coffee companies. Is that right?

[Paul Rice]

Indeed. Exactly. Supply chain transparency, supply chain reliability is a big attribute.

[Christine Ligorio Chavkin]

Yeah, that reliability, like the farm that you choose to work with is gonna stay with you because it's financially well supported, its workers are well supported, and they're loyal. That decreased costs.

[Paul Rice]

Exactly.

[Christine Ligorio Chavkin]

All of that I'm remembering from your book. No, it's really, really interesting.

[Paul Rice]

Thanks for reading my book.

[Christine Ligorio Chavkin]

Yeah, of course. Thanks for sending an early copy. So tell me, which first companies that you worked with, aside from Starbucks, really helped kind of build the movement. I know it's sort of a two way street, right. You need the movement to get out into the world and for brands that work with it, to help publicize it as well. Who came along for the ride, who was a valuable partner there?

[Paul Rice]

We started with coffee and then very quickly moved into other product categories. And today Fair trade certified works with everything from coffee and chocolate to tea and sugar and apparel and home goods and seafood. And we certify farms in the developing world. We also certify farms and factories here in the US So it has become a major multi product movement. But in each new product category, we found what we think of as a lighthouse brand that wanted to be first, that wanted to make the case that this interesting model that had been developed for coffee could be adapted to the fill in the blank industry, the chocolate industry, the apparel industry. And so then when the lighthouse brands came on board, others started to follow. So with apparel it was Patagonia. And then quickly thereafter, J. Crew came on board. And J. Crew is now 90 plus percent fair trade with home goods. First it was West Elm, and now other home goods companies are joining. So in each product category in chocolate, you know, it was Guittard and Ultra Eco, and now we work with Hershey. So in each category there was kind of a leadership role by a very special brand, often led by very special leaders who really have a vision for conscious capitalism. For business with purpose and who showed that it could be done, and then others follow it.

[Christine Ligorio Chavkin]

And those others, I mean, I imagine there's still folks right now who are starting up and thinking, like, I really want my supply chain to be traceable and clean and responsible. What advice would you have for founders who are just starting out? And whether they're getting into a apparel or food or beverage, what would you recommend are some early steps they can take?

[Paul Rice]

It's really clear that consumer demand is moving in this direction and that supply chain issues. Supply chain responsibility and sustainability shouldn't be an afterthought for any entrepreneur starting a business right now. I mean, the data is clear in terms of consumer preferences, especially Gen Z and millennials and their expectations that brands will not do harm. Right. I mean, no one wants to think that there's sweatshot labor in their clothes or child labor in their chocolate. So I think smart entrepreneurs today are really incorporating this thinking from the very beginning into how they develop their product lines and how they develop their supply chains. And there are tons of resources. This is not hard anymore. Like fair trade, there are so many other expressions of ethical fashion and sustainable sourcing in food products. And so there are plenty of resources out there to do it.

[Christine Ligorio Chavkin]

That's really refreshing to hear because I see as a reporter, just like, reading the news, I see so many brands sort of seem to be, like, stepping backwards into bad situations where they're all of a sudden, they're associated with the sweatshop, or there's child labor accusations, and they're doing all this cleanup work on the other side. But at the same time, I feel like, I wonder how much consumers are constantly bombarded with messages and just, like, don't know how to different what's greenwashing from what really is a clean supply chain. So how do you manage that sort of messaging from the fair trade perspective?

[Paul Rice]

You know, there is greenwashing out there, and I think discerning consumers are wary of that and are looking for evidence. And it's one of the reasons why in my journey, I chose to start a certification that is backed up by a rigorous standard and an annual audit. Right. So that you don't have to take Patagonia's word for it or J. Crew's word for it, that they're making sure the workers in their factories are getting a decent wage and being treated equitably and fairly. There's an independent audit that independently verifies that. So I think, like fair trade, there are so many different certifications, and my sense is that they are all helping consumers discern companies that walk the talk from companies that don't. It doesn't mean that all company owned efforts, if you will, to clean up their supply chain and to deliver a more sustainable product, it doesn't mean that that's all greenwashing. I wouldn't say that. I think companies try to do it on themselves. That's better than companies that do nothing. But think about this. Companies that are making claims about environmental or social impact, they're on this journey that is being supported by a shift in the business world and a shift in consumer expectations. And different companies are on different stages of that journey. But it's gives me hope that more and more mainstream companies are getting on board.

[Christine Ligorio Chavkin]

Yeah, tell me about that shift in consumer expectations and in business behavior. You've been on this journey for more than 20 years. Maybe 30 is more accurate, maybe 40, maybe 40. Tell me about what you've witnessed in terms of the actual studies about consumer sentiment and anecdotally even about business sentiment.

[Paul Rice]

So there's a lot of research now around consumer expectations of social and environmental care, if you will, from the business community and Gen Z and Millennial Consumers Index particularly high in terms of their expectations. But beyond the research, there's the actual performance of sustainable products and the companies that lean into producing in a more sustainable way, they're outperforming the market as a whole. And so beyond the research, it's just the actual market journey that we're seeing and the shift now increasingly not just by smaller brands, brands that have positioned themselves as sustainable, but even mainstream retailers. I mean, we have a great program with Walmart. Who knew that Walmart would be a place to buy sustainable products or organic products? And yet it's there. And so I think that shift in the business community is definitely being supported by, and in some ways driven by this, this groundswell of consumer interest.

[Christine Ligorio Chavkin]

Absolutely. And I mean Walmart, I feel like they're starting to make these bigger promises and maybe they're starting to try to get textiles made in the usa, making a promise there. So is it that a generational change or is that something that any leader of any company is seeing the data on and seeing that consumers just actually want that?

[Paul Rice]

Yeah, I think everyone's seeing the data and I haven't seen a business leader yet who didn't agree that the longer term perspective for business was one that definitely shifted toward more socially and environmentally responsible practices. I think a lot of companies, especially large companies, publicly traded companies, are so constrained by Quarterly earnings reports and the way the market pushes companies toward a more short term time horizon and focus. And I think that's the challenge. But certainly for leaders of companies that might be smaller and more agile, there's a huge opportunity to jump in front of this shift and to take advantage. I mean, in many cases, there are first mover advantages to companies doing sustainable products in emerging categories where sustainability is still quite new.

So hold on. It makes sense that millennials and Gen Z consumers are demanding more from the products and the companies that they purchase from. But for those same generations, things are really out of reach, like homeownership. Even buying a car is out of reach for these people and isn't, say, buying things that are like fair trade, isn't it more expensive?

[Christine Ligorio Chavkin]

I definitely talked to Paul about this. You know, fair trade and organic, to me seem like they're more expensive. But also think about a decade ago, they actually were more expensive. Think about today, like when I'm shopping at Costco, I don't actually notice the difference in organic produce price and conventionally grown produce. That's because they have really come close together. They've moved a lot closer. And that is something that he says is continuing to change as more and more consumers demand organic produce and organic goods and big, huge retailers like Costco demand those goods from their suppliers. Right?

[Paul Rice]

Yeah.

[Christine Ligorio Chavkin]

So it's this whole shift that continues to happen and even Walmart is changing some of their practices and suppliers. So, you know, he pointed out that when it comes to responsible business practices, that the first mover advantage may actually belong to smaller businesses and startups, but these large legacy companies are taking note. There is a problem, though, if these businesses are trying to do better. It may become more difficult if the administration's trade wars continue to escalate, which they are in the midst of, of doing.

[Paul Rice]

Absolutely. I don't think you can have a conversation these days that don't involve tariffs to some degree.

[Christine Ligorio Chavkin]

I dug a little bit deeper with Paul on this and let me just say his predictions for the effects of the trade war do not get sunnier, especially when it comes to smaller farms and human rights. That's after this break. Not totally trying to play devil's advocate here, but I do see a lot, I mean, just a lot of consumers, I mean, probably most, if not all, are driven by price and perceived value. Right. And I feel like the sustainable goods, while prices are maybe like kind of coming to a more similar place. I see organics coming to a more similar place in certain shopping experiences, but I feel like some of the higher end, sustainable, the most sustainable products, the most organic and certified products are available and purchased by the most affluent consumers. So how do we. You mentioned Walmart, but is this really coming to a mass movement? Will it be a mass movement?

[Paul Rice]

Yeah, I mean, it's already happening. You're right though, that we're coming out of an inflationary time where people are perhaps being somewhat more circumspect about their purchases. But we all have affordable luxuries, right? We all have our favorite little indulgence. And what we've seen from the data and from market performance is that sustainable products tend to be recession proof. They tend to be inflation proof. The fair trade products and their sales grew during the last two recessions. They grew during the first Trump presidency pretty dramatically. I think people realize that buying sustainable products is a way to kind of vote with their dollars, things that they believe in. Now. The remarkable thing is that now fair trade products are not only available at Whole Foods, but also at Walmart and Kroger and Safeway. And that again suggests that even mainstream middle income consumers care about these issues and care enough to, you know, to buy them, to buy products.

[Christine Ligorio Chavkin]

While we're talking about, you know, recession prices, consumers, another thing that has a lot of small businesses just absolutely biting their nails right now is tariffs and Trump's trade war. I mean, what is going on from your perspective and where do businesses stand here?

[Paul Rice]

Straight up, tariffs are dumb. Tariffs are just dumb. Ask any economist. They're all saying tariffs are inherently inflationary and it's going to raise prices for consumers. We all know that. What I don't hear people talking about enough is why tariffs are bad for American business and why they're bad for sustainability, bad for American business because of retaliatory tariffs. So if you're an exporter, you're going to find it more challenging to sell to Canada, to Mexico, to China, to other countries because of retaliatory tariffs. But also, I mean, I was talking with folks at Whole Foods last week and they see tariffs on Mexican produce as hurting their business because they're going to have to now raise prices on that produce and that's going to impact demand. And so they're concerned about tariffs hurting their sales, the sales of US Businesses that sell those products, number two. And then finally, tariffs are bad for sustainability because, you know, if you're a Mexican farm owner or a Mexican farm factory owner and you now have a huge tariff placed on you, you're going to have to cut costs in order to Try and make your product more viable in the US Market.

[Christine Ligorio Chavkin]

Right.

[Paul Rice]

What's going to be on the chopping block? Probably that new worker housing dorm that you are going to build or those energy saving investments that you're going to. So sustainability investments are going to be impacted by the whole tariff issue, right?

[Christine Ligorio Chavkin]

Absolutely. As companies try to take on some of that cost instead of passing it on to consumers. Right. That's so interesting that. Yeah, we don't talk about the sustainability aspect with tariffs because I think there's a world in which people imagine, oh well, tariffs will encourage American manufacturing and cut down the distance involved in certain supply chains. But you can't grow coffee in New York State. Right. I mean, we haven't figured it out.

[Paul Rice]

Well. And you know, with produce there's seasonality. Right. So we produce tomatoes in the US During a certain growing season and then it's too cold here and so we source tomatoes from Mexico. So it's not like you can grow tomatoes in the dead of winter in the US There needs to be that trade in order to have a year round supply of tomatoes on our grocery store shelves. And so the impact is going to be pretty negative for a lot of the growers that we work with. And here's another thing that I'll say about tariffs. If you're concerned about immigration, you need to keep Mexican farmers and workers in jobs. Tariffs are going to put a squeeze on Mexican farm owners and there will be businesses that close that won't be able to survive, whether it's farms or factories. And so that means more workers in Mexico out of work. What are they going to do?

[Christine Ligorio Chavkin]

Do?

[Paul Rice]

Where are they going to go? If you live in northern Mexico near the border and you've suddenly lost your job, which direction are you going to head? North or south? Right. And so I think, you know, a lot of these policies today are just, they're not only counterproductive, they're not going to be effective, I guess.

[Christine Ligorio Chavkin]

Let's look at your entire experience in this growing movement. I'd love to hear just more of your kind of cultural thoughts about adopting this kind of standard. Adopting from a consumer and a small business perspective, you know, the certifications for these standards. What else has grown or changed in terms of that, I don't know, consumer sentiment that you've seen over the last several decades.

[Paul Rice]

Consumers are definitely shifting towards products that are not only high quality and affordable, but also have impact in the world. And what's interesting is that while there are certainly a lot of consumers that'll pay more as you pointed out earlier, some consumers don't want to pay more for a sustainable product. And so, you know, it's fun to work with companies that are figuring out how to engineer sustainability into their products in a way that doesn't cost more. So ELF Beauty, are you familiar?

[Christine Ligorio Chavkin]

Yeah, no, I've spoken with the CEO.

[Paul Rice]

He's actually with Turang.

[Christine Ligorio Chavkin]

Yeah, he's great.

[Paul Rice]

Turing's great. And ELF has joined the fair trade movement three years ago and they're now up to more than 80% of all their product lines are fair trade certified.

[Christine Ligorio Chavkin]

Oh, I had no idea.

[Paul Rice]

And they didn't raise products.

[Christine Ligorio Chavkin]

Yeah, yeah. They have more women on their board than almost any other company.

[Paul Rice]

They do.

[Christine Ligorio Chavkin]

It's amazing.

[Paul Rice]

Yeah, I mean, they really walked the talk as a company in terms of dei, in terms of so many ways. And when they embraced fair trade, they looked for ways to make sure that the workers in their factories were taken care of, got a living wage, and they didn't want to raise the price to consumer. And so they've figured out how to make that happen. And what they're doing finding is that by being fair trade and cruelty free and clean certified, they have such a stronger consumer following, their sales have grown so dramatically that they are able to essentially incorporate those extra costs of sustainability into their product. And as you know, they're one of the. I mean, they're super successful.

[Christine Ligorio Chavkin]

Absolutely. Yeah. They're sold everywhere. It's amazing. Yeah. And at really accessible price points.

[Paul Rice]

I'm really. Exactly, exactly. I'm really proud of ELF because they've shown that sustainable products have to cost.

[Christine Ligorio Chavkin]

More and they're often really like targeting a very young consumer too. So Gen Z, Gen Alpha, are their eyes open to all this or is this just natural to them that they expect it?

[Paul Rice]

I think there's an expectation, but we also see Gen Z consumers quick to kind of move away from brands that they perceive as inauthentic or indifferent to these issues. So that's really encouraging that, you know, they may not have the discretionary spending that boomers and Gen X have or millennials even. But there's a walk away factor where if a brand is outed for bad practices, Gen Z will walk away from them.

[Christine Ligorio Chavkin]

Oh, interesting. I mean, that's got to be a nightmare for a company. What kind of behavior triggers that and how can companies avoid it?

[Paul Rice]

Well, certainly fast fashion and the brands that are kind of tagged as being a part of fast fashion have been exposed to this kind of consumers voting with their feet, walking away when they perceive the practices to be unsustainable or unethical in one way or another. And you know, that's led to many of those companies doing more, frankly, on the sustainability. So I think, you know, that's really interesting to watch how companies react to being pressured. I mean, look at Walmart. Walmart 20 years ago had all kinds of pressure on it for labor practices. And fast forward to today, it's clear that Walmart is making genuine efforts to do better. Doug McMillan, the CEO, made a really important speech a few years ago about Walmart becoming a regenerative company and developing more sustainable supply chains, reducing energy usage, raising wages for its employees. And no company is perfect. And the bigger the company, the longer the journey and the harder it is to affect change. But I'm just really encouraged by, by companies like that that are clearly moving in the right direction.

[Christine Ligorio Chavkin]

Give me a prediction for the future. Let me hear what's on your mind in terms of what's going on in all these realms. And what do you predict will come in the next decade?

[Paul Rice]

I'm troubled and dismayed by the news cycle right now, as are so many people. And I think a lot of people are wondering what they can do right now besides just wait four years to vote for change. And you know what's remarkable about sustainable products is that you don't have to wait four years. You can vote today. You can vote today. When you go to the store and choose this product versus that one. When you choose a sustainable product or an ethically sourced product over one that isn't. Small acts of change, small acts of compassion and kindness for the world. Right. I think that is going to grow. We saw Fair Trade product sales boom during the first year Trump presidency.

[Christine Ligorio Chavkin]

Oh, interesting.

[Paul Rice]

And I think we're gonna see more and more consumers right now looking for ways that they can affect small change through something like a cup of coffee or a banana.

[Christine Ligorio Chavkin]

Right. So it's not just like boycott Tesla, they're every little banana.

[Paul Rice]

Right?

[Christine Ligorio Chavkin]

Yeah.

[Paul Rice]

Right. We all have so much power and influence to affect change through the products that we choose. It's why the title of my book is Every Purchase Matters. Because it doesn't, Right?

[Christine Ligorio Chavkin]

Absolutely. And what's something you've learned so far in publicizing your book? How is it going so far bringing this book out into the world? You've stepped down from being the head of Fair Trade usa, right?

[Paul Rice]

I have. I'm a free man.

[Diana Ransom]

Yeah, yeah, yeah.

[Christine Ligorio Chavkin]

But now you have your book.

[Paul Rice]

Yes.

After 26 years at the helm of this beautiful social enterprise, that I gave birth to back in 98. I now get to be a free agent and to help build the movement in a bigger way. And that's exciting to me. And this book is exciting to me. And what has resonated in the conversation so far, you know what resonates is the relevance of this message for this moment. What we were talking about a minute ago, the fact that so many people in business, and so many people, consumers in general, are wondering what they can do, and the notion that through our businesses, we can advance social and environmental outcomes in many ways. The deregulation that is happening now, the withdrawal of government from programs and initiatives around social and environmental sustainability makes it even more incumbent on the business community and on us as consumers to find market based approaches to live our values and to protect the planet and improve the lives of people. So I think there's a lot of curiosity around the book for that reason. By the way, this book, it's not my story. It's the story of a movement as told through the voices of the protagonist itself. So, as you know, I interview CEOs from all kinds of companies, large and small, and we get to hear their stories, both of success and failure with this really interesting, what I would call multi generational movement toward more responsible business.

[Christine Ligorio Chavkin]

Yeah, wonderful. Well, thank you so much, Paul, for being here today.

[Paul Rice]

Thank you. It's a real pleasure.

[Christine Ligorio Chavkin]

Reflecting back on my conversation with Paul, two major things stuck with me first, and I probably have thought too much about this since our conversation.

[Paul Rice]

I'm sure you did.

[Christine Ligorio Chavkin]

Oh, my gosh. The potential toll of tariffs and the trade war on human rights abroad and on sustainability initiatives. It does make sense, though. When budgets get tight, what gets cut? Companies giving back initiatives. There are new projects, right? Better housing for workers. Paul said all of those things are the first things to go. Bonuses for workers. And those are things that make all the difference to people's actual lives.

[Paul Rice]

Yeah, that's pretty sad to hear. Suffering.

[Christine Ligorio Chavkin]

Yeah. The second thing that stuck with me was a little bit brighter. You know, Paul's been in this line of work for decades, and he's seen the tide shift not only in consumer behavior, but also in the fact that companies are recognizing that behavior. And the biggest companies are willing to make changes in their supply chains to help keep promises to customers who expect more from them.

[Paul Rice]

And I loved his quote about nobody wants child labor in their chocolate.

[Christine Ligorio Chavkin]

Yeah, no, absolutely. And he said, very true, true, true. He did seem to be a big fan of voting with your wallet and consumers making the right choices. Just day to day in the little things that they're buying and that the tide of millennial Gen Zs caring about sustainability, human rights, fair working conditions and wages, caring about protecting our air and water and earth is only growing.

[Paul Rice]

So that's hopeful.

[Christine Ligorio Chavkin]

Yeah. And companies are listening. So that's the good news. That's all for this episode of from the Ground Up.

[Paul Rice]

Be sure to subscribe on Apple Podcasts, Spotify or your podcast platform of choice. Also, if you like this episode or have suggestions of what topics you'd like to hear about, leave us a review on Apple Podcasts or reach out to us on all of Ink's social channels.

[Christine Ligorio Chavkin]

From the Ground up is produced by Blake Odom and Avery Miles with Diana Ransom and myself with help from Sam Gabauer and Hawa Ohtori. Editing by Matt Todder, mix and sound design by Nicholas Torres. Our executive producer is Josh Christensen.

[Paul Rice]

Thanks for listening and we'll see you. See you next week.

Panoply.