Local Where?

One of the biggest banks on the planet, HSBC [1], has taken to calling itself “the world’s local bank.” Winn-Dixie [2], a 500-outlet supermarket chain, recently launched a new ad campaign under the tagline “Local flavor since 1956.” The International Council of Shopping Centers [3], a global consortium of mall owners and developers, is pouring millions of dollars into television ads urging people to “Shop Local” … at their nearest mall. Even Wal-Mart is getting in on the act, hanging bright green banners over some of its produce aisles that simply say, “Local.”

What’s wrong with this picture?

Hoping to capitalize on growing public enthusiasm for all things “local,” some of the world’s biggest corporations are brashly laying claim to the word.

This new variation on corporate greenwashing — call it “local washing” — is, like the buy-local movement itself, most advanced in the context of food. Hellmann’s [4], the mayonnaise brand owned by the processed-food giant Unilever [5], is test-driving a new “Eat Real, Eat Local” initiative in Canada. The ad campaign seems aimed partly at enhancing the brand simply by associating Hellmann’s with local food. But it also makes the claim that Hellmann’s is local, because most of its ingredients come from North America.

That’s not the only industrial food company muscling in on “local.” Frito-Lay [6]’s new television commercials use farmers as pitchmen to position the company’s potato chips as local food, while Foster Farms [7], one of the largest producers of poultry products in the country, is labeling packages of chicken and turkey “locally grown.”

This phenomenon has a precedent in the nationwide struggles to define “organic” and “natural.” And Vermonters in particular may see “local washing” as a new term for an old abuse of their state’s cultural cachet.

Long before consumers started identifying themselves as “localvores,” the word “Vermont” on a product’s label seemed to add an implicit guarantee of purity and craftsmanship. In 1989, the state attorney general’s office sued Mad River Traders [8] for calling its product “Vermont all natural soda,” though it was neither manufactured in Vermont nor of local ingredients. In 2005, after several similar cases, the AG’s office adopted a six-page rule that spells out precise requirements for placing the state’s name on a food product.

At the national and international level, corporate local washing has spread well beyond food. Barnes & Noble, the world’s top seller of books, has launched a video blog site under the banner “All bookselling is local.” The site, which features “local book news” and recommendations from employees of stores in such down-home-sounding locales as Surprise, Ariz., and Wauwatosa, Wis., seems designed to disguise what Barnes & Noble [9] is — a highly centralized corporation where decisions about which books to stock and feature are made by a handful of buyers. It presents the chain as a collection of independent-minded booksellers.

Across the country, scores of shopping malls, chambers of commerce and economic-development agencies are also appropriating the phrase “buy local” to urge consumers to patronize nearby malls and big-box stores. In March, leaders of a new buy-local campaign in Fresno, Calif., assembled in front of the Fashion Fair Mall for a kick-off press conference. Flanked by storefronts bearing brand names such as Anthropologie [10] and The Cheesecake Factory [11], officials from the Economic Development Corporation of Fresno County [12] explained that choosing to “buy local” helps the region’s economy. For anyone confused by this display, the campaign and its media partners — including Comcast [13] and the McClatchy-owned Fresno Bee [14] — followed the press conference with more than $250,000 worth of radio, TV and print ads that spelled it out: “Just so you know, buying local means any store in your community: mom-and-pop stores, national chains, big-box stores — you name it.”

The Real Buy-Local Movement
In one way, all this corporate local washing is good news for local-economy advocates: It represents the best empirical evidence yet that the grassroots movement for locally produced goods and independently owned businesses is having a measurable impact on the choices people make.

“Think of the millions of dollars these big companies spend on research and focus groups. They wouldn’t be doing this on a hunch,” observes Dan Cullen of the American Booksellers Association [15](ABA), a trade group that represents some 1700 independent bookstores. Last year the ABA launched IndieBound [16], an initiative that helps locally owned businesses communicate their independence and community roots. The Flying Pig Bookstore [17] in Shelburne is but one Vermont shop that has taken advantage of IndieBound’s materials. Co-owner Josie Leavitt says she uses IndieBound’s lists of “Indie Next” books, chosen by independent booksellers throughout the country, and gift cards accepted at all members’ stores. “IndieBound encourages people to shop locally,” says Leavitt, noting the group’s mission is complementary to Vermont’s “buy local” efforts.

Signs abound that consumer preferences around the country are trending local. Locally grown food has soared in popularity. The U.S. is now home to 4385 active farmers markets; one of every three of those appeared since 2000. Tiny Vermont is home to about 73 summer markets — a handful of them new this year — and a growing number of year-round markets give consumers access to locally grown root vegetables, specialty products and crafts throughout the winter.

Nationally, food co-ops and neighborhood green-grocers are also on the rise. Driving has decreased, and data from several metropolitan regions show that houses located within walking distance of small neighborhood stores have held value better than those isolated in the suburbs, where the nearest gallon of milk might be five miles away.

More independent businesses are catching on to the inherent marketing value of being local, and are reporting a surge in customer traffic as a result. In April, for example, as Virgin Megastores [18]prepared to shutter its last U.S. record outlet, independent music stores were mobbed for the second annual Record Store Day [19]. A celebration that features in-store concerts and exclusive releases, the event drew hundreds of thousands of music fans across the country into the smaller stores. Record Store Day was temporarily one of the top search terms on Google, and the nationwide events collectively triggered a 16-point upswing in CD sales, according to the retail reporter Nielsen SoundScan. That trend held true at Burlington’s Pure Pop Records [20], a locally owned store that participated both years. “It was fantastic,” reports Assistant Manager Herb Vanderpoll [21]. “It was the busiest non-holiday day for us. We will definitely continue to do it.”

In city after city, independent businesses are organizing and creating the beginnings of what could become a powerful counterweight to the big-business lobbies that have long dominated public policy. Local business alliances have formed in more than 130 cities or states and together count some 30,000 businesses as members.

Local First Vermont [22], an independent state organization, is affiliated with the national movement. According to Weston-based board member Chris Morrow, LFVT has attracted about 150 members since launching in 2005. However, the nonprofit is currently merging with Vermont Businesses for Social Responsibility [23], a partnership that “makes sense on many levels and will benefit both organizations,” Morrow says. LFVT will no longer exist as a separate legal entity, but its board will serve as a committee within VBSR to guide buy-local efforts.

Similar alliances across the U.S. are calling on consumers to choose independent businesses and local products more often when they purchase goods and services. Doing so, they say, is critical to rebuilding middle-class prosperity, averting environmental collapse and rejecting corporate uniformity.

Even in Vermont, where “small, local and independent” describes the majority of businesses, big-box retailers have taken firm hold — and indeed been welcomed — in some communities. Particularly in an economic downturn, shoppers are readily lured by the lower prices of a giant such as Wal-Mart. The problem is, such short-term thinking is not good for the community in the long run.

Even in the recession, though, buy-local initiatives appear to be giving some small businesses an edge over their chain competitors, according to a January 2009 survey of 1100 independent retailers conducted by the 35-year-old Institute for Local Self-Reliance [24], which has offices in Minneapolis and Washington, D.C. The survey also found that, while the Department of Commerce [25] reported a plunge in overall retail sales of almost 10 percent over the 2008 holidays, independent retailers in cities with buy-local campaigns saw an average sales drop of just 3 percent from the previous year.

Corporations Take Note
The localization trend has not slipped the notice of corporate executives and the research firms that advise them. In its annual consumer survey, the New York-based branding firm BBMG [26] found a notable increase in the number of people who reported that it was “very important” to them whether a product was grown or produced locally: That contingent climbed from 26 to 32 percent in the last year alone. “It’s not just a small cadre of consumers anymore,” says founding partner Mitch Baranowski.

“Food is one of the biggest gateways, but we’re seeing this idea of ‘local’ spread across other categories and sectors,” says Michelle Barry, senior vice president of the Hartman Group [27] in Washington. A report published by Hartman last year noted, “There is a belief that you can only be local if you are a small and authentic brand. This isn’t necessarily true; big brands can use the notion of local to their advantage as well.” Barry explains: “Big companies have to be much more creative in how they articulate local … It’s a different way of thinking about local that is not quite as literal.”

One way corporations try to claim next-door-neighbor cred is to stock a token amount of locally grown produce, as Wal-Mart [28] has done in some of its supercenters. The chain’s local-food offerings are usually limited to a few of the main commodity crops of the state in question, which sit amid a sea of industrial food and other goods shipped from the far side of the planet. Yet this modest gesture has won Wal-Mart glowing coverage in numerous daily newspapers. Few ask the salient question: Does Wal-Mart, which now captures more than one of every five dollars Americans spend on groceries, create more and better opportunities for local farmers than the grocers it replaces?

Wal-Mart, like other chains, has learned that tossing around the word “local” is a relatively inexpensive way to convey civic virtue. “It’s easier for companies to do than to improve how their employees are treated, or adopt a specific sustainability practice around their carbon footprint,” says Barry.

Redefining Local
Yet another corporate strategy is to redefine the term “local” to mean not locally owned or locally produced, but just nearby. The term is ripe for manipulation, notes the consumer-research firm Mintel [29], which counsels companies on how to “craft marketing messages that appeal to locally conscious consumers” — and on how to avoid “charges of ‘local washing.’” The key, Mintel says, is for companies to decide what they mean by local and to disclose that clearly.

And so corporate-oriented buy-local campaigns that define “local” as the closest Lowe’s or Gap are being rolled out in cities nationwide. Some represent desperate bids by shopping malls to survive the recession and fend off online competition. Others are the work of chambers of commerce. Still others reflect the half-baked plans of municipal officials casting about for some way to stop the hemorrhaging of sales-tax revenue.

Many of these campaigns are modeled directly on grassroots initiatives. In northern California, the Arcata Chamber of Commerce is producing “Shop Local” ads [30] that look similar to the Humboldt County Independent Business Alliance [31]’s “Go Local” ads, except that the former’s list includes chains. Log on to the Buy Local website [32] created by the chamber in Chapel Hill, N.C., and you will find Wal-Mart among the listings.

“That’s what’s happening with our local chamber,” laments Claire Benedict, co-owner of both Bear Pond Books [33] and Rivendell Books [34] in Montpelier. “They define ‘local’ differently than the downtown merchants define it; they consider any business in central Vermont local — including JC Penney and Wal-Mart. We consider it to [mean] locally owned and run.” When the Central Vermont Chamber runs “buy-local” promotions during the holidays, Benedict says, “We don’t participate because we just don’t feel we’re on the same page.”

Speaking of advertising, corporate media have jumped on the bandwagon as well: In Vermont, the Gannett [35]-owned Burlington Free Press [36] recently ran a buy-local promotion, though its own company headquarters are in Virginia.

Local-first organizations generally cite a study that found that, for every $100 spent locally, $45 stays in the community. One problem with claiming chain stores as “local,” besides the patent absurdity, is that this math only works if the money is spent at a locally owned business. Shop at a chain store, and only $13 of that $100 stays in the community.

Municipalities and chambers of commerce that describe “their” chains as local do so for one reason: sales tax. Big-box money is just as welcome to cities and states as is sales-tax revenue from locally owned businesses. The idea is that shopping at Wal-Mart is fine, as long as it’s not Walmart.com.

But sales-tax-driven campaigns may do more harm than good to local economies, according to Jeff Milchen, cofounder of the American Independent Business Alliance [37], a national advocate based in Bozeman, Mont. “If you encourage people to shop at a big-box store that takes sales away from an independent business, you’re just funneling more dollars out of town,” he says. “Because, unlike chains, local businesses buy lots of goods and services, like accounting and printing, from other local businesses.” Moreover, notes LFVT’s Morrow, “Local business owners live here; their kids go to school here. They make decisions based on what is good for the local community. In Vermont and other states,” he adds, “chain stores might close down for reasons that have nothing to do with the community.”

The irony of trying to reverse the decline in city revenues by encouraging people to shop at the local mall is that the mall itself may be the problem. The solution may lie in the opposite direction. The City of Berkeley [38], for example, has managed to post a small increase in revenue at the same time many California cities are facing budget cuts and even bankruptcy. Part of the reason is that Berkeley has more or less said no to shopping malls and big chain stores and remained instead a city of locally owned businesses that primarily serve local residents. That creates a much more stable revenue base. Berkeley hasn’t benefited from the temporary boom that a new regional mall might create, but neither has it gone bust.

Will “Big Local” Triumph?
Will corporations succeed in co-opting “local” — or at least in muddling the term until it loses its meaning? Faux-local campaigns may be more transparent to residents of a small state like Vermont. But, the Hartman Group’s Barry suggests, “For many consumers, these things are not being called into question much. They say, ‘Hey, it’s my local Wal-Mart or my local Frito-Lay truck.’ It depends where you are on the continuum and how you define local, which is a term that is really up for grabs.”

The very possibility of local washing has prompted many local-business advocates to reconsider their language and favor the word “independent.” That is not yet the case in Vermont. “We use ‘locally owned and independent’ as a phrase,” says LFVT’s Morrow. “I think Vermonters understand local.”

Here, the AG’s office has continued its crusade to protect the state’s name in commerce. Nevertheless, there are a handful of insidious methods companies use to insinuate the presence of “Vermontyness” where none exists. For example, the phrase “Green Mountain” is as yet unregulated. Hence it’s legal for TW Garner Food Company [39] of Winston-Salem, N.C., to manufacture and sell the formerly made-in-Vermont Green Mountain Gringo [40] salsa.

Since the average consumer may not be up to date on culinary mergers and acquisitions, it’s possible for a brand — regardless of whether it uses a state’s name or nickname — to retain “local” cred long after it has stopped being produced locally. McKenzie Country Classics [41]remains headquartered in Vermont, but the meats are made in Massachusetts.

Whatever their short-term success rate, corporate local-washing efforts may backfire to the extent that they end up raising consumers’ hackles — and their awareness. And that awareness may lend weight to the case for shifting our economy toward small-scale, local and independent commerce.

“I think people are going to recognize that these [claims] aren’t authentic,” concludes the ABA’s Cullen. “And that’s going to make the real thing all the more powerful.”