Beyond the Label: Paul Rice on Conscious Capitalism, the future of Fair Trade US and why ‘Every Purchase Matters’

At first glance, the phrase "conscious capitalism" may come across as somewhat of an oxymoron. A notion that has been floated in many circles since the early 2010s (coined by the co-founders of the Conscious Capitalism movement, Raj Sisodia and John Mackey, the co-founder of Whole Foods Market), it's a philosophy that encapsulates a different way of thinking about capitalism and business, where ethical practices and benefits for all stakeholders from an integral part. Together with the phrase "fair trade," both have been resurfacing in global headlines more recently - albeit for different reasons. While fair trade today is linked to renewed talk of trade policies in response to the Trump administration's politicization of tariffs, the Fair Trade Certified label has deeper roots.

Emerging in the 1990s as somewhat of a niche movement, fair trade is a certification process that assures products such as coffee, cocoa, fish, and even apparel are made in accordance with strict environmental and economic standards, providing fair wages, safe working conditions, and sustainable practices for workers across global supply chains. Part of Fair Trade USA, a non-profit organization, the label has evolved into something much larger and is now part of the broader shift toward conscious capitalism, where profitability and purpose go hand in hand.

Conscious Capitalism: A tool or just B.S.?

Although both concepts have gained significant traction in recent decades, they still feel somewhat radical in today's polarized climate, which is precisely why they're grabbing global headlines. "Conscious capitalism is either total B.S. or incredibly inspiring - depending on how seriously companies take it," points out Paul Rice. If anyone would know, it's him. Founder of Fair Trade USA, he created the certification label in 1998 after spending 11 years organizing coffee farmers in Nicaragua to export directly to global markets and generate sustainable livelihoods.

After overseeing Fair Trade USA for 26 years, he stepped down from his former role as CEO last fall and turned his focus to reflecting on the movement's broader impact. In his new book, 'Every Purchase Matters,' he reflects on the journey from Nicaraguan farms to global boardrooms—and how fair trade has become a key component of conscious capitalism, helping companies integrate ethical sourcing into their core business strategies.

In an interview with FashionUnited, Rice shares his candid insights into the state of the fair trade fashion movement in the US, the rise of conscious capitalism, and why he believes every purchase is a vote for the kind of world we want to live in.

Storytelling Beyond the Label

The data is evident when it comes to consumer shopping preferences. According to a recent Givsly x GWI report, 64 percent of Americans are willing to spend more on brands that align with their values, with Gen Z and multicultural consumers leading the way. Which makes sense to Rice, because as consumers become increasingly aware of the impact that their purchase has - not just on the planet but on people too - they're choosing to vote with their wallets. "My daughter, she's 25 and right in the middle of Gen Z, and she, together with her friends, would never buy something on a whim from a fast fashion brand," shares Rice. With many fast fashion brands, from H&M to Zara, offering "sustainable" collections, Rice wonders if consumers are still buying into these claims today. "I think there is a large cohort of younger consumers that are really savvy, with great B.S detectors, and they're looking for authenticity and transparency."

"Companies that are just doing performative actions without going deep are not winning Millennials or Gen Z over." Consumers today are hungry for authenticity, continues Rice, and want to know the impact of their purchase and not just a sticker on the clothing tag. "Storytelling is the superpower of every great brand," explains Rice. "There's clear evidence that consumers respond when brands tell a powerful story about their sustainability efforts, whether it's fair trade or beyond. They show loyalty, they amplify the brand in their communities both online and offline, and they buy more."

This is particularly evident in some of the apparel labels that Fair Trade USA has been working with over the years. For example, Patagonia – one of the pioneers of Fair Trade apparel -- has taken many field trips to their suppliers and manufacturers to see impact, and created some mini-documentaries that tell the story of fair trade. "When you tell the story of a garment worker whose life has improved because of fair trade, that creates consumer loyalty. It turns customers into brand advocates. That's why I titled my book 'Every Purchase Matters,' because, at the end of the day, consumer choice does matter in terms of how companies act."

“Voting every four years for President is important. But we can vote every day with our wallets. And companies are listening,” - Paul Rice

According to Rice, the most successful brands and retailers today are the ones who have figured out how to use storytelling beyond the Fair Trade Certified label, although the label in itself is a great signal of confidence to consumers. "We have 66 percent consumer awareness of the Fair Trade Certified label in the US market today, which is pretty extraordinary, especially for a small non-profit." And consumers are paying closer attention than ever before, meaning that brand neutrality is no longer a safe bet. According to the Givsly study, half of US consumers expect brands to take a stand on social causes, with 3 in 10 changing their purchasing behavior based on a brand's values.

But this does not mean that brands have to be perfect. “Most consumers are open to change from a brand, as long as it's authentic, and followed by long-term commitment.” As more consumers prioritize responsibly made products, the opportunity for brands to build deeper, values-based connections grows. And as companies respond, each purchase becomes a powerful way for consumers to influence meaningful change.

"It's my belief that we don't have to wait four years to vote for change. We can vote for change today when we go to the store simply by choosing a sustainable product over a non-certified product, in whatever category, right?" However, if every purchase is a vote, it does raise an important question at the heart of conscious capitalism: who pays for the change? Should consumers bear the cost of fair trade and ethical sourcing, or companies? This is something Rice explores head-on in one of the chapters of his book, taking a look at both sides.

Who Should Have to Pay For Sustainability?

"On the one hand, there are business leaders like Tarang Amin, CEO of e.l.f. Beauty. In three years, the brand has converted 85 percent of its business to fair trade - without charging consumers more." By investing in sustainability, e.l.f Beauty has been able to pay fair wages while simultaneously seeing strong growth in sales and market share, which has helped the brand maintain healthy profit margins, shares Rice. Due to the brand’s higher product volume, their fixed costs are spread out more efficiently, and their unit margins have actually increased - a powerful example of how doing the right thing can also drive business success. “I think they've reported net sales and market share growth for 25 quarters in a row. It’s extraordinary, they're on fire.”

On the other hand, there are entrepreneurs like John Mackey, former CEO of Whole Foods Market, who believes consumers should pay more for sustainable products and that price signals quality and legitimacy. "If something is too cheap, consumers question the product's validity and think 'something's wrong here.' They expect to pay more." Much like we've learned to pay more for organic produce, Mackey believes that certified products should cost more. While this approach may appeal mainly to higher-income shoppers, it can still create a large and successful niche market, exactly like Whole Foods, which is one of the leading retailers of fair trade products in the US.

Conscious Capitalism, is it a Trend or Transformation?

When questioned about which point he believes, Rice states that he respects both paths. "Look, there's Target, which sells fair trade jeans for 19.95 dollars, and Whole Foods, which charges a premium. I like that both demographics can access fair trade, whether you're shopping at Target or Whole Foods." He adds that ethical sourcing often generates additional operational value and more resistant supply chains, which is important in the current global political landscape. A few years ago, Fair Trade USA did a pilot with Walmart and NatureSweet for fair trade tomatoes, where they paid the workers more but did not pass the cost along to the consumers. "Walmart found that farms that adopted the fair trade practices had four times the industry average in terms of worker retention. That translates into less money spent on recruiting and training and higher worker productivity. There's a supply chain business case for conscious capitalism, not just a consumer-facing one."

Touching on the current political climate in the US today, Rice is realistic about the changes taking place. “Depending on how you think about change, sitting in my office today, it may not feel like capitalism is evolving very quickly. In many ways, businesses are pulling back from progressive values—especially under political pressure.” Touching on Trump’s tariff policies, Rice believes it to have a negative impact overall, from raising prices for consumers, hurting businesses, and discouraging investment in sustainability. “I spoke with a company in Mexico last week that had plans to install solar panels and remodel worker housing—two key sustainability investments. Both projects are now on indefinite hold because they’re unsure if they’ll even be in business in a few months from now.”

Rice also criticizes how the policies have been implemented, saying they’ve created global tension and confusion. While he doesn’t see a direct negative impact on fair trade yet, he notes that Fair Trade USA certifies farms and factories in over 70 countries—including the US—and is ready to support domestic manufacturing if companies decide to bring production back home. “If Patagonia or William Sonoma want to bring back production, we would say ‘yes, of course, no problem.’” However, looking at the progress of fair trade from a broader perspective, the last 30 years show clear progress. “Brands care more about workers, about materials, about waste. Over the next 30 years we will go even further.” In 2024 alone, Fair Trade USA and its brand partners generated over 100 million dollars in premiums for farmers and workers. For Rice, capitalism isn’t going away, but it is constantly evolving, and not necessarily out of respect for the environment or workers. “I don’t expect every brand to act out of altruism. Most embrace fair trade because they find a business case. And that’s okay. That’s how capitalism works.”

What’s Next for Fair Trade USA and Conscious Capitalism?

Looking ahead to what's to come, Rice believes the future lies in radical transparency and data-driven storytelling. Fair Trade USA is currently working on a project to help brands access data and content at scale to have a larger impact, using new technologies to tell stories in new ways. "Hangtags are fine. But imagine scanning a QR code and watching a video of the seamstress who made your shirt. AI and blockchain will play a role in curating and delivering those stories in real-time," he says. "That's going to be a big part of Fair Trade USA's focus over the next couple of years. So stay tuned."

Overall, the Fair Trade USA certification process has evolved extensively over the last 26 years. For example, it standardized the “community development premium,” which is the amount of money a brand is required to pay back to the factory workers, to make it more accessible to more brands. “We used to have a sliding scale for premiums, 1 to 10 percent, which wasn’t scalable. Now we’ve simplified it: a flat 1 percent of the factory price goes directly back to workers. That’s manageable even at volume.” More importantly, that money isn’t earmarked by brands. It’s democratically managed by the workers themselves, who can choose to invest it in housing, healthcare, education, or daycare. “That empowerment is our secret sauce,” says Rice. “It’s why we see higher worker retention. They stay because they feel seen and heard.”

Fair Trade USA's continuous improvement of its certification process and model has certainly played a big role in the non-profit organization's growth. Although farms and factories must meet baseline criteria to get certified, they're then graded on the progress they make annually, encouraging long-term change and improvement. "That's how we moved from working with smaller brands to working with the likes of Gap and J.Crew." And the proof is in the pudding. Fair Trade USA's apparel program grew 24 percent in 2024, compared with 2% growth of the overall US apparel industry, highlights Rice.

"But if we can be successful with what I call a 'lighthouse brand,' like Patagonia, we can create competitive pressure on others. For example, we've been working with J.Crew and its subsidiary brand Madewell for seven years. Four or five years ago, they made a very public goal of having 90 percent of their jeans, cashmere, and chinos fair trade by 2025. And, they're going to hit the mark." Not only does this raise expectations for other brands, but it also holds Madewell accountable for its goals. The decision to publicly share its goals not only built consumer trust but also sparked interest from other brands like Banana Republic, which is now in talks with Fair Trade USA. Rice believes this kind of healthy competition among leading brands is a powerful driver of progress in ethical sourcing and production across the industry.

“It’s not just about niche consumers or boutique brands anymore. It’s about reshaping the market at scale. And when companies respond to consumer demand, that’s when real change happens.”