Bono at World Economic Forum Launches New Product Label That Will Give Portion of Profits to Global Fund
Irish musician Bono on Wednesday at the World Economic Forum Annual Meeting 2006 in Davos, Switzerland, announced he has created a new range of branded products called Product RED that will give a portion of profits from products made by a variety of companies to the Global Fund to Fight AIDS, Tuberculosis and Malaria, BBC News reports. American Express, Converse, Giorgio Armani and Gap are the initial partners in the program and will distribute credit cards and sell tennis shoes, sunglasses and t-shirts carrying the Product RED label, respectively (Weber, BBC News, 1/26). Product RED donations primarily will support Global Fund-sponsored programs for women and children affected by HIV/AIDS in Africa (Product RED release, 1/26). Bono and other participants at the press conference in Davos said the portion of Product RED sales that will be given to the Global Fund depends on how well each product sells and whether the products are sold directly or through a retailer, Reuters reports (Trevelyan, Reuters, 1/26). According to BBC News, partner companies have promised to give an average of 40% of the profits from the products to the Global Fund. The four partner companies have committed to the brand for five years, and Product RED hopes to partner with more companies. American Express will launch the no-fee Product RED credit cards in the United Kingdom in April and has said 1% of all purchases made by cardholders will be given to the Global Fund (BBC News, 1/26). Converse plans to sell a Chuck Taylor All Star shoe under the Product RED label in the U.S. and the U.K. and online beginning in March (Product RED release, 1/26). Gap plans to begin selling African-made t-shirts in the spring of this year and more Product RED items in the fall (Gap release, 1/26). Armani's first RED product will be wraparound-style sunglasses (Stanton, Edinburgh Evening News, 1/26).
Reaction
"This is a long-term initiative," Product RED CEO Bobby Shriver -- who co-founded the AIDS, debt relief and trade advocacy group DATA with Bono -- said, adding, "RED partners expect that they will broaden their own customer base and increase loyalty in a manner that delivers a sustainable revenue stream to boost the company and the Global Fund" (AFP/Yahoo! News, 1/26). Global Fund Executive Director Richard Feachem said the brand should bring "increased awareness of HIV in Africa," in addition to a "rising income stream" to the organization (Davey, Times, 1/26). The partnership is not a philanthropic but a commercial decision, Bono said, adding, "Philanthropy is like hippy music, holding hands. RED is more like punk rock, hip hop. This should feel like hard commerce." American Express Chief Marketing Officer John Hayes said the "traditional philanthropic models simply cannot solve" the pandemic, and Product RED is "conscientious commerce that will reward both our shareholders and the global community" (BBC News, 1/26). Some critics of the new brand say the lack of disclosure over what exact proportion of sales will go to the Global Fund by all partners except American Express might alienate some consumers. Bono said that "some people will be very upset" that the new brand is "working with big business," but the HIV/AIDS pandemic "just has to be sorted and we can't do it with governments alone" (Milmo, Independent, 1/27).