Selling out local

HSBC, one of the biggest banks on the planet, has taken to calling itself “the world’s local bank.” Winn-Dixie, a 500-outlet supermarket chain, recently launched a new ad campaign under the tag line “Local flavor since 1956.” The International Council of Shopping Centers, a global consortium of mall owners and developers that includes a Sacramento chapter, 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 its produce aisles that simply say “Local.”

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 local.

This new variation on corporate greenwashing—local-washing—is, like the buy-local movement itself, most advanced in the context of food.

Hellmann’s, the mayonnaise brand owned by the processed-food giant Unilever, is test-driving a new campaign in Canada called “Eat real. Eat local.” The campaign claims that Hellmann’s is local because most of its ingredients come from North America. Frito-Lay’s new television commercials use farmers as pitchmen to position the company’s potato chips as local food; while Foster Farms, one of the largest producers of poultry products in the country, is labeling packages of chicken and turkey “locally grown.”

Corporate local-washing is now spreading 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.” 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 assembled in front of the Fashion Fair mall for a kickoff press conference. Flanked by storefronts bearing brand names including Anthropologie and The Cheesecake Factory, officials from the Economic Development Corporation of Fresno County 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 and the McClatchy Company-owned Fresno Bee, 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.”

In one way, all of 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 now sweeping the country 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,” observed Dan Cullen of the American Booksellers Association, a trade group which represents some 1,700 independent bookstores. Last week, the ABA mailed a letter to Gov. Arnold Schwarzenegger, criticizing his recent veto of the state’s budget, which contained a provision requiring out-of-state online retailers doing business in California to collect and pay sales tax.

Signs that consumer preferences are trending local abound. Locally grown food has soared in popularity. The United States is now home to 4,385 active farmers’ markets, one out of every three of which was started since 2000. Food co-ops and neighborhood greengrocers are on the rise. A growing number of independent businesses are trumpeting their local ownership and community roots, and reporting a surge in customer traffic as a result.

In April, even as Virgin Megastores prepared to shutter its last U.S. record store, independent music stores across the country, including The Beat and R5 Records in Sacramento, were mobbed for the second annual Record Store Day. The event drew hundreds of thousands of music fans into stores, was one of the top search terms on Google and triggered a 16-point upswing in album sales, according to Nielsen SoundScan.

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. The Business Alliance for Local Living Economies, which bills itself as world’s fastest-growing network of sustainable businesses, maintains chapters in Sonoma, Marin and Napa counties. Although Sacramento has yet to form a local alliance, Chico’s BALLE chapter has already proven to be an enormously effective tool for promoting and defining what “shop local” really means.

Surveys and anecdotal reports from business owners suggest that these initiatives are in fact changing spending patterns. A survey of 1,100 independent retailers conducted in January by the Institute for Local Self-Reliance (where I work) found that, amid the worst economic downturn since the Depression, buy-local sentiment is giving local businesses an edge over their chain competitors. While the Commerce Department reported that overall retail sales plunged almost 10 percent over the holidays, the survey found that independent retailers in cities with buy-local campaigns saw sales drop an average of just 3 percent from the previous year. Many respondents attributed this relative good fortune to the fact that more people are deliberately seeking out locally owned businesses.

None of this has slipped the notice of corporate executives and the consumer-research firms that advise them. Several of these firms have begun to track the localization trend. In its annual consumer survey, the New York-based branding firm BBMG found that the number of people reporting that it was “very important” to them whether a product was grown or produced locally jumped from 26 to 32 percent in the last year alone. “It’s not just a small cadre of consumers anymore,” said 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,” said Michelle Barry, senior vice president of the Hartman Group. 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 can be “local” too is to stock a token amount of locally grown produce, as Wal-Mart 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 that particular state—peaches in Georgia or potatoes in Maine—and sit amid a sea of industrial food and other goods shipped from the far side of the planet.

Wal-Mart, like other chains, has learned that, with consumers increasingly motivated to support companies they perceive to be acting responsibility, tossing around the word “local” is a far less expensive way to convey civic virtue than the alternatives. “Local is one of the lower-hanging fruits in terms of sustainability,” explains Barry. “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, for example.”

Another corporate strategy is to redefine the term “local” to mean not locally owned or locally produced, but just nearby. “With the term ‘local’ being so nebulous, it seems ripe for manipulation,” notes Mintel, another consumer-research firm that counsels companies on how to “craft marketing messages that appeal to locally conscious consumers” and 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 so as not to be accused of trying to misappropriate the term.

Corporate-oriented buy-local campaigns that define “local” as the nearest Lowe’s or Gap store are now 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 trying to remain relevant. Still others are the half-baked plans of municipal officials casting about for some way to stop the steep drop in sales-tax revenue.

Many of these AstroTurf campaigns are modeled directly on grassroots initiatives. “They copy our language and tactics,” said Michelle Long, executive director of Sustainable Connections, a seven-year-old coalition of 600 independent businesses in northwest Washington state that runs a very visible, and according to market research, very successful “local first” program. “I get calls from chambers and other groups who say, ‘We want to do what you are doing.’ It took me a while to realize that what they had in mind was not what we do. Once I realized, I started asking them, what do you mean by ‘local’?”

Examples abound. In Northern California, the Arcata Chamber of Commerce is producing “Shop local” ads that look similar to the Humboldt County Independent Business Alliance’s “Go local” ads, except they feature both independents and chains. Spokane, Washington’s Buy Local program, started by the local chamber, is open to any business in town, including big-box stores. Log on to the Buy Local Web site created by the chamber in Chapel Hill and Carrboro, N.C., and you will find Wal-Mart among the listings.

When billboards proclaiming “Buy Local Orlando” first appeared in Orlando, Fla., Julie Norris, a cafe owner who last year co-founded Ourlando, an initiative to support indie businesses, was excited to see the concept getting such visibility. But she soon realized that the city-funded program, which provides businesses who join with a “Buy Local” decal, was open to any business in Orlando. “We sat down with the city and said, ‘What you guys are doing is a real disservice to the local-business movement,’” she said.

The city did agree to remove from its press materials and Web site a reference to a study that found that, for every $100 spent locally, $45 stays in the community. The problem was that the study, conducted by the firm Civic Economics, found that to be true only if the money was spent at a locally owned business. Shop at a chain store, the analysis found, and only $13 of that $100 spent stays in the community.

The Economic Development Corporation of Fresno County also appropriated the $45-stays-local statistic when it kicked off its “buy local” campaign at the Fashion Fair mall. The figure was repeated on a TV news story without any clarification that it did not apply to the types of chains visible in the background. Like the Orlando initiative, the Fresno campaign aims to boost sales-tax revenue by deterring online and out-of-town shopping. It goes out of its way in every radio and TV spot to make sure people know that “local” means national chains and big-box stores. “For someone to say you are not local if you are a big-box, I say baloney. They invested here,” explained Steve Geil, CEO of the EDC.

Can corporations succeed in co-opting “local”—or at least so muddling the term that it no longer has meaning? The Hartman Group’s Barry thinks that’s possible. “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.”

Jeff Milchen, co-founder of the American Independent Business Alliance, is less concerned about what he calls faux-local campaigns in cities where there is already a strong local-business organization. For example, the criteria for SN&R’s ongoing “Shop local” advertising campaign is less strict than its sister paper’s, the Chico News and Review, in large part because members of Chico’s BALLE chapter have helped define what “local” means in the region.

“It’s more of an educational opportunity than a problem, so long as they respond to it,” Milchen said. But in places where local enterprises are not as organized—which includes Sacramento—he fears these corporate campaigns may succeed in permanently defining “local” for their own benefit. Michelle Long shares that concern: “That’s my fear. People are going to do diluted versions and hold the space so that real campaigns don’t get started.”