insights on the local trend
april 2010
I S S U E 2
Buy from thy neighbor
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tbd soup is a series of reports on consumer insights and trends published roughly once a quarter and authored in collaboration by the team at tbd—everyone with a unique, informed perspective and an instinct for studying consumer behavior and market response.
How are consumer insights like soup, you ask? They’re both nourishing. They
can look complex but start with a simple base. (Despite the French name,
boeuf bourguignon is essentially beef stew.) And they are both something to
share.
While we’re at it, conventional wisdom suggests that starting a meal with a
bowl of soup can help you stay healthy and eat less. Likewise, we think that
starting any branding effort with a solid foundation in consumer insights can
help your brand stay healthy.
We launched the series in Fall 2009 with “The Good Things in Life,” a broad
look at the impact of the recession on consumer behavior and how consumers
are defining value. In this new issue, we dig deeper into one of the topics
introduced there: the trend toward buying local. You’ll find a few new features
in this issue, including an at-a-glance poster you can keep on your wall. We
hope that future issues will include still more new ideas, innovation and
inspiration—that’s the essence of tbd soup.
C O N T E N T S
4 The World Goes Local
6 What’s Driving This Trend
8 Buy from Thy Neighbor Poster
10 Deep Dive: Value
11 Deep Dive: Technology
12 Brands to Watch
14 On Local, Buy a Local
15 So, what now?
16 Glossary
17 Credits & Thanks
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Produce.
Meat.
Cheese.
Chocolate.
Coffee shops.
Hotels.
Clothing.
Candles.
Cupcakes.
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the world goes local
Everything seems to be going local.
Food is at the forefront of the “localvore” trend, perhaps the product
of other established trends toward health and wellness and global
responsibility—consumers want to know how their food affects
not only their own bodies but also everything else it has touched
along the way. We’re asking more questions—how was it grown,
processed, packaged and shipped—and local is a shortcut to those
answers. As evidence of this rapidly growing trend, farmers markets
and CSA (Community Supported Agriculture) memberships are now
almost a staple of urban living, connecting city slickers to a more
pastoral ideal.
Apparel is another category that’s taking notice, but here the questions
are mostly ethical—who made it, what were their working conditions,
how much were they paid. Not everything made offshore is bad, of
course. There are different connotations surrounding shoes made in
China than, say, shoes made in Italy.
And the trend is influencing consumer behavior in a range of other
categories, including the beloved automobile. To our parents and
grandparents, “Made in the USA” meant saving American jobs; to us,
it might also mean a smaller carbon footprint.
Indeed, local has come to mean different things to different people:
High-quality or fresh
Authentic
Trusted/ traceable
Supports my community
Original/ Obscure
Relevant to me/ shares my values
Sustainable/ environmentally friendly (with exceptions)
Experiential
In the simplest terms, “local” means buying from our neighbors.
MSNBC’s newsvine.com asked readers: “How much are you spending at local businesses?”
I’m spending more to support them during this recession
33.4%
I’m spending less because I need to save money 20.5%
About the same 26.4%
Ownership doesn’t matter to me, price does 19.8%
But if you look at the deeper reasons why we buy local (see Drivers on
the next page), “local” is about much more than proximity. Local is
about connecting your consumer to the origin of your product. If they
share the same zip code, an inherent connection already exists. But
you can also connect consumer to origin though storytelling.
Is buying local really a new thing? Is it solely the province of small,
independent companies? And what’s driving this trend, anyway?
No. No. And, keep reading.
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i s l o c a l a l l a b o u t p r o x i m i t y ?
o r i s i t a b o u t s o m e t h i n g b i g g e r ?
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i s l o c a l a l l a b o u t p r o x i m i t y ?
o r i s i t a b o u t s o m e t h i n g b i g g e r ?
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what’s drivingthis trend?
The local trend is not in fact new—the
Hartman Group, consumer researchers in
Bellevue, Washington, has been reporting
on the trend since 2005 (about the time
the organic trend went mainstream). Your
hippie aunt had the “Think global, act local”
bumper sticker in the ’70s. And before
industrialization took farmers to the city and
globalization took manufacturing overseas,
buying local was just what you did.
Why are consumers seeking out local products and services now?
What emotional needs are we filling? There are many drivers and not
all consumers care about all of them. You might remember from high
school that Maslow’s Hierarchy of Needs suggests that the more
resources you have, the more you can afford to care about things
bigger than you. So it helps to know who your consumers are and
where they sit in this hierarchy:
In order from survival to self-actualization, here are some of the drivers
of the local trend:
u n c e r t a i n t i m e s . In times of recession and war, people tend
to turn inward, focus on their own security and that of their families,
nest and simplify. Spending locally can be an act of patriotism or
simply an act of survival—the money we spend locally is typically
reinvested elsewhere in the community, keeping people (like us, we
hope) employed.
a c h a n g i n g v a l u e e q u a t i o n . As we mentioned in our first
issue, value no longer means cheap. In fact, buying cheap, mass-
produced products might not be cheap in the long run. Buying local is
one way we make sure we’re getting the most for our money.
f a c t o r y b a c k l a s h . Consumers are growing distrustful of long
supply chains (aka middlemen) and industrialization—a hangover
perhaps from our 1950s intoxication with all things processed, from
baby formula to chemical fertilizers. Sure, if you live in Omaha, you
are buying local when you buy a ConAgra product. But for most of us,
local means it was made by hands, not machines.
c o r p o r a t e e x c e s s . In the spirit of “voting with your dollars,”
consumers want to know who or what they are supporting with their
purchases. Highly-bonused executives at a faceless corporation in a
faraway place? Or Melanie and her family at their bakery on 5th Street?
The closer we can get to the producer, the more we can hold them
accountable.
g l o b a l i z a t i o n b a c k l a s h . The WTO riots of 1999 turned
globalization into a dirty word. For those consumers who have guilt
about buying goods made with cheap foreign labor, local goods are
one antidote.
a s e a o f s a m e n e s s . Consumers are overwhelmed with choices
that are not always differentiated. And that makes it hard for the
image-conscious among us to be differentiated. Local products and
services allow consumers to tell stories of obscure finds and show off
their discerning taste.
g l o b a l w a r m i n g . Politics aside, the climate change debate
made everyone more aware of their energy use—even Walmart is
taking notice. Everything we do and buy contributes to our carbon
footprint, so consumers now look at how products are produced,
packaged and shipped. It’s worth mentioning that as much as 40%
of the energy used in the food system goes towards the production
of chemical fertilizers and pesticides—which might make an organic
farm 100 miles away look better than an industrial farm 10 miles away.
But in most cases, the shorter the trek from producer to consumer,
the better.
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.
l o c a l p r o d u c t s a n d s e r v i c e s
a l l o w c o n s u m e r s t o t e l l s t o r i e s
o f o b s c u r e f i n d s a n d s h o w o f f
t h e i r d i s c e r n i n g t a s t e .
10Lead Paint Home Depot Roger & Me “King Corn”
Toyota Mall of America Made in China The Gap
Real Estate Bubble Too Big to Fail Mad Cow Disease WTOOmnivore’s Dilemma Type 2 Diabetes Unemployment Wal-Marte.coli 16,000Starbucks in 50 countries Bernie Madoff31,000 McDonald’s in 119 countries Fast Food Nation
Goldman Sachs Bear Sterns The Great Disruption
{ think global, act local }
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Lead Paint Home Depot Roger & Me “King Corn”Toyota Mall of America Made in China The Gap
Real Estate Bubble Too Big to Fail Mad Cow Disease WTOOmnivore’s Dilemma Type 2 Diabetes Unemployment Wal-Marte.coli 16,000Starbucks in 50 countries Bernie Madoff31,000 McDonald’s in 119 countries Fast Food Nation
Goldman Sachs Bear Sterns The Great Disruption
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deep dive: valueIn our Fall 2009 issue, we looked at the evolution of economic
utility, or value—it’s no longer simply the product of price and
quality. Value is now a subjective concept fraught with multiple
considerations and trade-offs—and often, too many choices.
Consumers are looking for help navigating it all, whether through
word of mouth, advertising, press, critics and increasingly,
certifications and labels such as Fair Trade, organic and yes,
local.
Speaking of local, vintners have been creating value this way for
centuries—you’ve probably heard the term terroir, French for “land”
or “territory” and often translated as the “taste of place.” But many
wine makers spent the last decade trying to make their products
more consistent and accessible, and in the process, eroded
much of that local authenticity and differentiation. Regional wine
growing commissions (most notably the Champagne region) are
now working to reclaim their turf. Coffee growing regions are also
catching on—Ethiopia recently trademarked the use of Sidamo,
Harrar and Yirgacheffe, three of its most famous regions.
Products that aren’t differentiated are seen as commodities,
interchangeable and not worth paying a premium for. Telling a
“local” story is one way you can differentiate.
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deep dive: technologyIn the quest for quality, consumers enjoy more access to
information than ever before. And we share what we learn with
our social network. A recent study from Ruder Finn revealed
that Americans are spending nearly three hours a day on their
mobile phones. And 91% of mobile device users (and 79% of
desktop users) are spending time on social networks. This means
storytelling is more important than ever—both the stories we tell
our consumers, and the stories we enable them to tell on our
behalves. Mobile devices equipped with GPS are also making
“local” immediate—the Locavore iPhone app helps you find
what’s in season and available at your nearby farmers markets;
the Around Me iPhone app helps you find the closest grocery
store, book store or coffee shop (no need to resort to the familiar
golden arches); and the Foursquare helps your friends find you.
Technology is helping us eliminate geographic barriers, allowing
for the growth of niche communities based on interests, affiliation
and yes, location.
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brands to watch
A C E H O T E L
This small boutique hotel chain is working carefully to create a unique
experience at each of their locations. Faced with heavy competition, Ace
Hotel differentiates by purchasing and renovating historic buildings
instead of new construction—just one way they honor the existing
community. Then they collaborate with local artists, restaurants
and businesses to create a unique, local flavor at each location. In
Palm Springs, the hotel store sells only goods handmade by locals.
The Portland location furnishes all of its rooms with Pendleton Wool
blankets and locally made PEARL+ soap. And many guest rooms
(ranging from communal bunk rooms to private suites) are furnished
with original murals from local artists.
A M E R I C A N A P P A R E L
The fashion industry made “sweatshop” a household word and the
largest, most beloved brands felt the most heat. Nike, for instance,
was exposed in 1996 for using child labor in Pakistan and to this day
symbolizes to some all that is wrong with capitalism. While some
progress has been made here, the industry still heavily relies on
cheap, foreign labor and materials. Enter American Apparel. Based in
the warehouse district in downtown Los Angeles, they’ve figured out
how to manufacture “well-designed basics” right here, paying their
workers much more than other companies pay their offshore labor
and even more than other Los Angeles-based garment makers. They
offer progressive benefits and policies to their workers and pronounce
their clothing “sweatshop free.” It’s working. The company is now
selling their American-made clothing in other countries, including
ironically, China.
A N T H R O P O L O G I E
Owned by the same company as Urban Outfitters and Free People,
Anthropologie is definitely a chain but works hard to avoid feeling like
one. Buyers shop local estate sales, artists and flea markets for an
eclectic assortment of clothing, accessories and home decor. Each
store hires an art director to curate an ever-changing store experience
that celebrates local color. And the stores themselves are designed
to feel informal and unpredictable—reminiscent of a flea market—
inviting customers to explore, linger and return often.
C U P C A K E R O Y A L E
Jody Hall is credited with bringing the cupcake craze to Seattle but
she’s no longer the only one game in town. Increased competition
forced her to up-level her product. So she hired a local pastry chef to
revamp her recipes and in the process, set out to buy more ingredients
locally. They worked with a local and sustainable flour manufacturer
to custom mill a cake flour to their specifications. And they feature
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local, seasonal ingredients as much as possible too, including Rainier
cherries, Skagit Valley strawberries and locally foraged huckleberries.
There are still a few ingredients they can’t source locally, like sugar and
vanilla, but they happily tout that their cupcakes are “66% local.”
S T A R B U C K S C O F F E E C O M P A N Y
In the 90s, their ambitious goals for growth required store openings
to be unencumbered by approvals and expense—and the cookie-
cutter approach was born. And so were the jokes: a Starbucks on every
corner, a Starbucks inside another Starbucks, McCoffee. What’s more,
in order to have more control over the ingredients in their food (a good
thing), the company reduced the number of bakery suppliers and the
variety of offerings. While some customers love the consistency of the
brand, others have tired of it. Last year, the company quietly launched
a project called “street level coffee.” The stores, each named after
the street they’re on and not named Starbucks, were designed with
materials reclaimed from local landmarks and offered locally sourced
artisan food. Whether or not this local approach is sustainable and
scalable for the company remains to be seen, but it does demonstrate
a belief at the corporate level that local is worth the investment.
S T U M P T O W N C O F F E E R O A S T E R S
As Stumptown expands beyond the City of Stumps (Portland,
Oregon), they are working hard to let each community shape them
instead of trying to shape each community. For instance, the Brooklyn
store makes a café mocha with locally sourced chocolate and milk.
And Stumptown doesn’t roast at one central plant and then ship to all
stores; each city has its own roaster. Finally, each coffee itself comes
with a card tucked into a pocket in the bag, romancing all the details
of its (faraway) origin. Sure, that’s a slightly different expression of
the local trend, but if you look at the drivers again, they’re all here—
authenticity, traceability, obscurity, etc.
W A L M A R T
Recently, the mega-chain launched a local produce program, sourcing
from farms near each store (which are often located in rural areas to
begin with) and offering them at prices comparable to or less than
Whole Foods. This helps them grab a share of the growing market
for local and organic and keep shoppers in their store longer. They
say that they want to help rebuild farming communities and perhaps
that’s true. As Michelle Harvey, of the Environmental Defense Fund,
said, “It’s getting harder and harder to hate Walmart.” Furthermore,
Walmart is helping make the local (and organic) trends accessible and
affordable—no longer just a luxury of the affluent.
m o v e m e n t s t o w a t c h
Make Local Habit, makelocalhabit.com
3/50 Project, the350project.net
Move Your Money, moveyourmoney.info
Local Harvest, localharvest.org
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on local, by a localOne of the best ways to understand your consumers, of course, is to listen to them. Sure, sometimes there’s a difference between what
they say they do and what they actually do. (For example, we insist that the recession made us more frugal—but then we go buy an
iPhone.) But when you listen closely, you can hear their true aspirations.
J e a n i e M o r t o n
Bend local since 2006
I spent the first 36 years of my life just outside of Chicago.
I purchased my groceries at Jewel, a large chain grocery
store. I shopped at Nordstrom, Marshall Fields and the Gap.
The employees of these businesses were my neighbors and
friends; they were part of my community. I was loyal to my
local businesses. But since moving to Bend, local has taken on
a new meaning to me. I have become ‘locavore’; I buy much of
our food from the farmers market and the local family-owned
grocery store and our milk is from a nearby dairy farm. I feel
that the food is fresher and chemical free and as a parent trying
to keep my family healthy, this is very important. I believe we
are also helping the local farmer, the local economy and our
community. Originally, buying local meant how far I drove to
purchase goods. Now, it means much more. And I don’t mind
spending more for it.
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so, what now?It’s not enough to have the information; we want you to have the inspiration. But before you overhaul
your brand in a push to go 100% local, it might help to remember:
local is just one way consumers are filling a deeper emotional need for connection and belonging. With that in mind, could you:
Tell stories about where you source your materials or ingredients?
Provide the raw material so your customers can tell your stories for you?
Label your products for transparency, i.e. carbon footprint, source of all ingredients, etc.?
Show up where locals show up, i.e. farmers markets, community events, other relevant locations?
Invite your customers behind the scenes, i.e. a factory tour, meet the designers, guest bartend, etc.?
Craft your communications in the voice of real people (customers? Employees?) instead of the corporation?
Could you invite your customers to call Mike or Bob or Judy, instead of calling a “Customer Service Department”?
Partner with other local businesses for promotions, advertising and events?
If local doesn’t fit your master brand, can you carve out a local sub-brand?
Offer locally sourced coffee and pastries (and tell their story) in your lobby?
Offer locals a “share” of your company?
Even if your product is not literally local, can you connect consumers to origin through storytelling?
(If you are a chain) Decentralize enough to allow for a localized assortment?
Let each store/branch support a different local cause?
Sell or show local art?
Let your employees (who are locals themselves) influence the brand and keep it locally relevant?
And remember that local means different things to different people. What’s important to your customers?
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glossaryYou may have noticed that the trend industry loves to reinvent language. Not all of the following terms were used in this issue, but you may find them in other conversations around the local trend:
1500 miles: Widely believed (and oft repeated) to be the average number of miles our food travels from farm to plate. The number is misleading but has helped to make consumers more aware of their “food miles.”
Big Organic: True to the laws of economics, when demand for organics grew, suppliers did too. Some consumers doubt that anything big can remain good, hence the label a la Big Tobacco and Big Pharma.
Carbon footprint: The amount of carbon dioxide you are creating by just living your life, via airplane travel, car commuting, how you light and heat your house and how much waste you produce.
Food miles: The number of miles your food travels from farm to plate.
Foodshed: Borrowed from the term watershed, this describes the rural area where your local food (meat, eggs, milk, produce) comes from.
Greenwashing: Marketing puffery intended to make a company look environmentally friendly.
Locavore (or localvore): Someone who passionately consumes local products and services.
Seed to table: Also farm to plate or soil to cup. Describes the long journey an agricultural product takes from origin to consumer.
Slocal: What you get when the slow food movement and the local movement get married and have a baby.
True cost: The sticker price on that apple is just what it costs you to take it home today. But the true costs include the costs to society and the planet. It could also cost us health care premiums and environmental cleanup if it turns out to be, well, a bad apple.
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credits & thanksPHOTO CREDITSCOVER / Photo http://www.flickr.com/photos/kamshots/193501256/ Photographer http://www.flickr.com/photos/kamshots/ License CC BY 2.0PAGE 2 / Photo http://www.flickr.com/photos/wendypiersall/4370773527/ Photographer http://www.flickr.com/photos/wendypiersall/ License CC BY 2.0PAGE 6 IMAGE 1 / Photo http://www.flickr.com/photos/pixietart/4799569/ Photographer http://www.flickr.com/photos/pixietart/ License CC BY 2.0PAGE 6 IMAGE 2 / Photo http://www.flickr.com/photos/vatobob/2136501005/ Photographer http://www.flickr.com/photos/vatobob/ License CC BY 2.0PAGE 6 IMAGE 3 / Photo http://www.flickr.com/photos/focaum/4368620141/ Photographer http://www.flickr.com/photos/focaum/ License CC BY 2.0PAGE 7 IMAGE 1 / Photo http://www.flickr.com/photos/zarajay/1516027705/ Photographer http://www.flickr.com/photos/zarajay/ License CC BY 2.0PAGE 7 IMAGE 2 / Photo http://www.flickr.com/photos/francesca_rauchi/151382244/ Photographer http://www.flickr.com/photos/francesca_rauchi/ License CC BY 2.0PAGE 7 IMAGE 3 / Photo http://www.flickr.com/photos/prosto/2946988707/ Photographer http://www.flickr.com/photos/prosto/ License CC BY 2.0PAGE 9 IMAGE 1 / Photo http://www.flickr.com/photos/paperfacets/3721595873/ Photographer http://www.flickr.com/photos/paperfacets/ License CC BY 2.0PAGE 9 IMAGE 2 / Photo http://www.flickr.com/photos/sidelong/1118694763/ Photographer http://www.flickr.com/photos/sidelong/ License CC BY 2.0PAGE 9 IMAGE 3 / Photo http://www.flickr.com/photos/seeminglee/3866336217/ Photographer http://www.flickr.com/photos/seeminglee/ License CC BY-SA 2.0PAGE 9 IMAGE 4 / Photo http://www.flickr.com/photos/clayirving/4318582539/ Photographer http://www.flickr.com/photos/clayirving/ License CC BY-ND 2.0PAGE 12 / Photo http://www.flickr.com/photos/oskay/339996940/ Photographer http://www.flickr.com/photos/oskay/ License CC BY 2.0PAGE 13 / Photo http://www.flickr.com/photos/goincase/2837788308/ Photographer http://www.flickr.com/photos/goincase/ License CC BY 2.0PAGE 14 / ACE HOTEL / Photo http://www.flickr.com/photos/gideon/2978917791/ Photographer http://www.flickr.com/photos/gideon/ License CC BY 2.0PAGE 14 / AMERICAN APPAREL / Photo http://www.flickr.com/photos/saekooo/2752992348/ Photographer http://www.flickr.com/photos/saekooo/ License CC BY 2.0PAGE 14 / ANTHROPOLOGIE / Photo http://www.flickr.com/photos/kevinvirgo/4205210619/ Photographer http://www.flickr.com/photos/kevinvirgo/ License CC BY 2.0PAGE 14 / CUPCAKE ROYALE / Photo http://www.flickr.com/photos/doctorow/2503269847/ Photographer http://www.flickr.com/photos/doctorow/ License CC BY 2.0PAGE 15 / STARBUCKS COFFEE / Photo http://www.flickr.com/photos/digitalcolony/3790373124/ Photographer http://www.flickr.com/photos/digitalcolony/ License CC BY 2.0PAGE 15 / STUMPTOWN / Photo http://www.flickr.com/photos/stopdown/2167847784/ Photographer http://www.flickr.com/photos/stopdown/ License CC BY 2.0PAGE 15 / WAL-MART / Photo http://www.flickr.com/photos/aka_kath/422217715/ Photographer http://www.flickr.com/photos/aka_kath/ License CC BY 2.0PAGE 18 / Photo http://www.flickr.com/photos/kio/4141715515/ Photographer http://www.flickr.com/photos/kio/ License CC BY 2.0PAGE 19 / Photo http://www.flickr.com/photos/tao_zhyn/2450284882/ Photographer http://www.flickr.com/photos/tao_zhyn/ License CC BY 2.0
WEBSITESHeller, Martin C and Gregory A. Keoleian, “Life Cycle-Based Sustainability Indicators for Assessment of the US Food System,” Ann Arbor, MI: Center for Sustainable Systems, University of Michigan, 2000: 42Kummer, Corby, “The Great Grocery Smackdown,” Atlantic Monthly, March 2010, http://www.theatlantic.com/magazine/archive/2010/03/the-great-grocery-smackdown/7904/Connor , Michael, “Nike: Corporate Responsibility at a “Tipping Point,” Business Ethics, January 24, 2010, http://business-ethics.com/2010/01/24/2154-nike-corporate-responsibility-at-a-tipping-point/Murray, James, “Tesco defends carbon label scheme,” Business Green, May 21, 2008, http://www.businessgreen.com/business-green/news/2217167/tesco-defends-carbon-labelTozzi, John, “To Beat Recession, Indies Launch Buy-Local Push,” Business Week, February 17, 2009, http://www.businessweek.com/smallbiz/content/feb2009/sb20090226_752622.htm“What is Local?”Elephant Journal, August 31, 2009, http://www.elephantjournal.com/2009/08/what-is-local/“Is ‘buying Local’ The Real Deal?” Hartbeat, Hartman Group, http://www.hartman-group.com/hartbeat/is-buying-local-the-real-deal“What Makes ‘Local’ Special?” Hartbeat, Hartman Group, http://www.hartman-group.com/hartbeat/what-makes-local-special, “U.S. clothing firm seeks good fit in China,” Los Angeles Times, April 3, 2008 http://www.americanapparel.net/presscenter/articles/20080403latimes.htmlKwok, Roberta, “Is local food really miles better?” Salon, June 24, 2008, http://www.salon.com/mwt/food/eat_drink/2008/06/24/food_miles/Black, Jane. “What’s in a number? How the press got the idea that food travels 1,500 miles from farm to plate,” Slate, September 17, 2008, http://www.slate.com/id/2200202/pagenum/all/#p2“Eat local, buy local, be local,” Sustainable Table, http://www.sustainabletable.org/issues/eatlocal/“NIKE: Nike Shoes and Child Labor in Pakistan,” Trade & Environment Database, http://www1.american.edu/TED/nike.htm“(Still) made here,” Trendwatching, June 2007, http://trendwatching.com/trends/stillmadehere.htm“American Aparrel,” Wikipedia, http://en.wikipedia.org/wiki/American_ApparelOur own eyes
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“The economic argument behind buy-local campaigns goes like
this: Spending at local businesses, rather than
at chain stores or online, helps local economies because those
firms are more likely to buy from local suppliers and hire local
service providers for needs such as accounting.”
– J o h n T o z z i i n B u s i n e s s We e k
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