Think Global, Act Local Goes Organic – And Then Some

Most people know that you need to adapt your business, products and marketing to local tastes and cultures when you’re expanding globally. What fewer understand is that, increasingly, the same applies to marketing in the good ole U.S. of A.

The so-called “foodie” movement that continues to gain momentum and traction in this country has become defined by the appetite of many consumers, called “locavores,” for locally produced (not to mention organic, free range and grain fed) farm fresh food products. It now also has a number of local beer, wine, and liquor followers all becoming agents of continued change in where, what, and when we produce and buy food.

Although the localized production and consumption movement is looked upon as something new and different in the U.S., it of course dates back to before the early 20th Century, when processed foods became the norm. The crux of the proverbial biscuit though, is that this lifestyle is centuries old for the rest of the world, and ironically it’s now coming back around to us.

Locavores embrace the availability of organic, local, seasonal, and same-day fresh produce as well as seafood, baked goods, poultry, and various meat products. They have their own language, using terms like artisanal, biodynamic, grass-fed, heirloom, line-caught, market table, and terroir. The movement has even impacted urban centers like New York City, where large rooftop gardens are emerging and succeeding as small businesses. Urban farmers rent the top of commercial rooftop buildings to grow local, organic produce. Landlords benefit from the free insulation, saving on energy bills. These urban farmers sell direct to restaurants, stores and street shoppers.

Demographics and geography are driving these changes. The more affluent and educated urban dwellers, as well as suburban and rural locavores with more discerning lifestyles, are increasingly preferring quality over quantity. They eschew the characteristics of traditional supermarket chains and fast food operators. Local specialty and gourmet stores are thriving in affluent areas. And, the rural farm stands, craft beer and local wine producers are increasingly appealing to seekers of agritourism and agritainment.

The big retail game-changers are ‘specialty’ grocery chains like Organic Valley, Whole Foods, and Nature’s Bounty. In addition to alternative upscale products, they are successfully positioning and marketing themselves as a “shopping experience” or destination, rather than just a way to tick items off a shopping list.

Something to Drink with That?

Adding a whole other cool dimension to the “foodie” movement, and further confirmation of consumers’ desire for everything “local,” is the accelerating growth of local craft beers or microbreweries, wineries, and distillers, whose sales growth outpaced that of the overall beer industry during the recession.
In fact, micro-breweries and craft beers are gaining such a  foothold in the beer market that the big national brands like Budweiser, Miller, and Coors are now exerting pressure on their wholesalers and distributors for more favorable treatment based on their volume history. Imports like Heineken are also concerned about U.S. sales and market share, as the craft beers attract like-thinking beer consumers with a similar palate.

Small, independent and traditional craft brewers (defined as producing fewer than 2 million barrels per year) are a $7 billion market. The largest is Boston Beer, maker of Samuel Adams, with 1.8 million barrels per year. Microbreweries, which by definition produce fewer than 15,000 barrels, are another hot segment. There are a total of about 1,700 craft or micro-breweries in the U.S., and that number is growing. As we speak, the big commercial beer companies are kicking up their advertising spending as well as adding new beer brands to hold on to their base of younger beer drinkers. If all else fails, they will continue to invest in these craft or microbreweries, or just acquire them outright.

The wine market has been slower to embrace localization. The U.S. is now the largest wine consuming market in the world, with sales of 347 million cases per year, or $32.5 billion in sales in 2011, up 5% over 2010. Though domestic wines hold a smaller market share than imported wines, there are 6,100 wineries in the U.S., and that number is rapidly growing. Smaller, local and independent wine makers have begun to attract younger consumers, which will no doubt cause local wines to begin to grow in popularity and number. Many upscale restaurants and wine stores now feature local wines. Continued growth may have as much to do with marketing as it does wine-making.

Last but not least are the local spirits distillers all over the country who are garnering a notable and enthusiastic following. One example in the NewYork area is LiV, makers of Long Island’s first vodka, produced in micro batches from Long Island potatoes. Launched in 2006, the brand has won several awards, not the least of which was the top (gold) award in vodka, beating 44 other vodkas from 30 countries worldwide. Riding that success, they are now introducing a new scotch-style single malt whiskey called Pine Barrens.

A “Localized” Big Mac?

A final irony of thinking globally but acting locally is that, as our antifoodie fast food corporations aggressively expand internationally, they’re discovering the cookie-cutter model employed in the U.S. does not work in the more locally oriented foreign markets. The likes of McDonald’s, with more than half of their operations now in foreign countries, is adapting to each country’s local tastes and local cultures in order to compete with many countries’ more established and numerous street food vendors.

So, as the foodies and locavores gain influence in the U.S., the cookiecutter models may be forced to adjust here as they are doing internationally. The conundrum has already begun with some second and third generation fast-food franchise owners lobbying for the flexibility to adjust menus according to local preferences, and to get more directly involved in their local communities.

Obviously, this kind of strategic flexibility is not something most of the centrally structured giants of fast food are quick to embrace. Even though they are continuously testing and experimenting with new food and beverage offerings, they are cautious about significant changes that are not proven, which makes change slower than the younger generation of owners prefer, which is probably a mirror of how their younger consumers feel as well. And, that is something the giant fast food chains should pay attention to.

In fact, they are being preempted by another niche segment, called “fast casual,” and best exemplified by Chipotle Mexican Grill Inc., one of the fastest growing restaurant companies in the U.S. Now with over 1,100 restaurants in 38 states, Chipotle owes its incredible growth to its menu’s response to foodies. Instead of frozen foods processed centrally and distributed throughout the chain, dishes are made from scratch. And, instead of frozen or otherwise preserved products from agribusiness, ingredients are local, fresh and raw.

Media “Acting Locally”

Every movement thrives on media exposure and support. While cooking magazines like Bon Appetit and Food & Wine represent the “old guard” of gourmet food titles, and The Food Network and related websites have become new media’s answer to same, the poster child for the locavore foodie movement is clearly Edible Communities, produced by a publishing and information services company that creates community-based, local publications focused on food and beverages. It is member-owned, and includes local food advocates and residents of the communities in which it publishes.

This is a business model that not only supports the message and values of its members, but preserves the integrity of each of the local publications and its communities. Also supported by local web sites, radio podcasts, book publishing, and numerous ongoing promotional events, Edible connects readers and consumers to producers and sellers.

Edible is the country’s largest publisher dedicated to the local food and beverage movement. Launched in 2002, they currently publish 70 edible titles like Edible Manhattan, Edible Boston, Vancouver, etc. The content for each magazine and location is region specific, focusing on farmers, fisherman, chefs, and food artisans from each area. Although national in reach, they represent the local perspective and speak the local dialect.

So think global, eat (and drink) local…and be merry.

About Russ Schaehrer

Russ Schaerher is President of RKS Associates, an advertising consultancy.