Reference no: EM13583449

The "Small-Mart"

Economy For many, the idea of a green economy run by big, global corporations is anathema. To be truly sustainable-in the true sense of environmental, social, and economic well-being- requires a return to localization, to smaller, more personal sys- tems of commerce that connect each of us to the origins of the things we buy, as well as to the people who make and sell them. Michael Schuman refers to this as the Small-Mart Revolution, which is the title of his 2006 book on the topic. "Small-Mart" refers to locally owned businesses that are, in aggregate, more reliable generators of good jobs, economic growth, tax dollars, community wealth, charitable contribu- tions, social stability, and political participation, according to In his book, Shuman makes clear that this "revolution" is about "far more than fighting chain stores." In fact, he says, it is notable as much for what it stands for as for what it is against. Shuman is for profit-making businesses, even big ones (under certain circumstances). He is for jobs and, presumably, some reasonable level of consumption. In fact, the only thing for which he is demonstrably against is "the vast web of laws and public policies that directly disadvantage small and local businesses" in favor of large, global ones. Oh, and the global financiers that facilitate this: It's the capital markets, stupid. Shuman isn't the first to pitch the notion that local is beautiful. Around the industrialized world, communities have been exploring alternatives to global mass marketers for, well, as long as there have been global mass marketers. In the United States, groups such as the Business Alliance for Local Living Economies, Global Exchange, the Institute for Local Self-Reliance, and Co-op America have been actively promoting the notion of "local living economies" for years. There's the international "slow food" movement, founded in Italy in 1989 by activist Carlo Petrini as a resistance movement to combat fast food. It aims to combat the disappearance of local food traditions and "people's dwindling interest in the food they eat, where it comes from, how it tastes and how our food choices affect the rest of the world," according to its Web site. The movement claims 80,000 members from Taiwan to Turkmenistan. Slow food has given rise to the notion of "locavores," coined in 2005 by a group of self-described "concerned culinary adventurers" in San Francisco who proposed that local residents should try to eat only food grown or produced within a 100-mile radius. The idea of the "100-mile diet" has whet- ted the appetite of a growing corps of eco-connoisseurs, the twenty- first-century equivalent of the back-to-the-earth crowd of the 1960s and 1970s, albeit with a bit of flair not just for the simple life but also for the good life. In his book, Shuman paints a compelling portrait of how small, local business networks can work and succeed. In the "Small-Mart Nation," many of your neighbors run their own businesses, con- sumers spend more of their money on locally produced, high-quality goods and services, some of their savings sit in a local bank or credit union, and communities don't bend over backwards-financially or otherwise-to lure global companies to set up shop nearby. It's not that they don't want automobile factories, big-box stores, and other manifestations of globalization in the 'hood. It's just that these enti- ties will have to compete on a level playing field when it comes to zoning, taxes, schools, policing, and other government services. If they succeed on that basis, they're welcome. Sometimes, "Small-Marts" can be not so small. Shuman tells the story of the Hershey Chocolate Company. The $4.6 billion candy company is publicly traded, which normally makes local ownership impossible, but a local charity, the Hershey Trust, keeps ownership local by controlling 77 percent of all voting shares. The trust "is effec- tively the heart that pumps monetary blood" throughout the region surrounding Hershey, Pennsylvannia, writes Shuman. So, can "Small-Mart" replace Wal-Mart? Probably not for a while, if ever, concedes Shuman. "I believe that over time Small-Mart will reduce the size and the influence of Wal-Mart with a bunch of local alternatives," he told me. "It will never get rid of it, and we may never want to get rid of it. At the end of the day there are some economies of scale that some global companies have that are superior to local companies." This, of course, is the key to Wal-Mart's success-its laser-perfect attention to sourcing, pricing, and distribution, allowing it to lever- age its size-and clout-as no company has ever done to keep prices dirt cheap. However, those economies of scale, deployed effectively, could create positive impacts. If each customer who visited Wal-Mart in a week bought one long-lasting compact fluorescent light bulb, the company estimates, that would reduce electric bills by $3 billion, con- serve 50 billion tons of coal, and keep 1 billion incandescent light bulbs out of landfills over the life of the bulb. Of course, thousands of small, local merchants could have a similar impact, should they decide to coordinate, cooperate, or simply get into the same marketing groove. And "Small-Mart" even offers a model. Shuman described how True Value and Ace, two U.S.-based hardware chains, are comprised of individual, locally owned hardware stores banded together into marketing and buying cooperatives. They allow local hardware stores to buy collectively and engage in the kind of global bargaining that only giants such as Wal-Mart can do. Local isn't always better, at least from an environmental perspec- tive. Consider food miles, a metric that has gained currency in recent years among sustainability advocates. The term is shorthand for the distance food travels from farm to fork, with greater distances sug- gesting that the food has a larger environmental footprint. This makes intuitive sense. Transporting great distances requires energy and fuel and release of concomitant emissions. But food miles turns out to be short-sighted. Transport, it seems, can represent a relatively small portion of environmental impacts. So, in New Zealand, where farm- ers tend to apply fewer fertilizers (which require large amounts of energy to produce and cause significant greenhouse gas emissions) and animals are able to graze year round on grass, reducing the need for indoor animal feeding, livestock and dairy products use a fraction of the resources as the same products produced in other countries. A 2006 study found that dairy products shipped from New Zealand to the United Kingdom required half the energy and pro- duced half the greenhouse gas emissions as dairy products produced in the United Kingdom, even after considering transportation. Similarly, the New York Times reported in 2008 that wine shipped to New York City from the Loire Valley in France had a lower carbon footprint than comparable product shipped from the Napa Valley in California. The reason: The Napa wine is trucked to New York-a more energy-intensive mode of transport-whereas the French wine travels mostly by ship, then is trucked the final distance. Such findings are significant, but so too are the questions being asked:

What is the optimal role for "local" in a globalized world?

How do companies balance the growing desire for locally based com- merce-whether born of patriotism, planetary concern, personal security, or other things-against the economies of scale that are pos- sible through globalized systems of commerce?

How much should your company-to borrow the famous environmental credo-think globally and act locally?

What's the "local" story your company can tell? Is that the story your customers, employees, and other stakeholders need and want to hear?