What is a Local Product?

In the late 80’s and 90’s,  farmers, food manufacturers, distributors, retailers asserted that their products were “organic”. There were multiple standards that were voluntarily adopted and hopefully posted as the basis of assertions on product labeling (sometimes).

In the 90’s, the USDA finally realized that distinctly  “organic” food was desired, demanded, by many consumers, and that there was a great deal of doubt in consumers’ mind whether a particular product was in fact “organic”.

They organized stakeholder discussions to formalize a coherent standard. There was a great deal of argument, compromise, and now after the standards have been published and applied, there is a great deal of lobbying and fudging.

Does the term “organic” on a package mean the same thing to you as you imagine, that you desire as a standard. In the 70′ and early 80’s, the rage word was “natural”, and there even was some basis of standards for a time, based on the principles of accuracy in advertising. (“Natural” is no longer assessed. It is just an assertion at this point.) “Organic” assertion was considered special, an unusual degree of care in growing and processing, really natural.

That standard is dissolving as the standards are asked to be relaxed to accommodate industrial organic farming, industrial in method, industrial in supply path (not local), industrial in distribution, industrial in retailing and mass communications/branding.

Currently, there is a great deal of interest in local food (and even some interest in decentralizing economy as a whole, not just food). But, noone knows what the term “local” means.

In conducting test evaluations in preparation of the use of the “locus” designation, many have discovered that they do use a considerable amount of non-local ingredients and packaging to the extent that it is difficult to confidently state that the food is local, if 100% of inputs are incorporated into the assessment (especially if packaging is included in the assessment).

What do consumers think is meant by the term local? If a locally sited company making a corn salad uses locally grown sweet corn, locally grown peppers, imported salt, imported spices, glass packaging from China, lidseals from Chicago, and the non-local components comprise 45% of the cost, is that a “local product”?

If only the food components are considered, and the average sourcing of the product adds up to 100 miles away, is that a local product? If the most local 95% of ingredients adds up to 50 miles away, is that a local product?

Where is it a local product? If a product that is prepared and packaged in Northampton, MA and is a local product in Northampton, is sold in Philadelphia, is that a local product in Philadelphia? How about New Haven?

I want to know, and I’m hoping that other consumers want to know.

There is good reason to emphasize local food and local value addition. And, there is good reason for consumers to be aware of where their food and products/services come from.

The options for disclosure include “off/on” measurements like organic certification (though within three categories of what is “organic”). This product is either local or it is not. (That is misrepresentative to put on packaging as products are sold in other places than where they were prepared.)

Another option is to describe the geographic center of gravity of processing, but that leads to sometimes absurd and incomprehensible results. An example is a food product prepared in Brattleboro, VT with produce from various points in the Connecticut River Valley (near Brattleboro), but other ingredients from Oregon and California. The numeric computation adds up to somewhere in upstate New York, that doesn’t resemble anything coherent about the products. (its a hypothetical example, not real).

In contrast, the option that locus adopts is to define a region in which a product can be sold in which it complies with “100-mile” certification and another larger circle to comply with “500-mile” certification for general products.

If locally made is an important assertion for consumers to consider in their decisions, then the criteria should be clear to consumers, consistently assessed, and rigorously enforced. Otherwise the term “local” will go the way of “natural”, just an assertion, not something that can be relied on.

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Locus

What is sustainability?

As a definition, I like the one articulated by the 1987 Brundtland Report, “Meeting the needs of the present generation without compromising the ability of future generations to meet their needs.”

My own definition:

https://rwitty.wordpress.com/2009/10/12/sustainable-societyeconomy-definitions/

In the few cases where I’ve been engaged to conduct “sustainability audits” for small companies, the criteria for their inquiry included input/process/output analysis on water usage, carbon footprint, recycling, solid waste disposal, etc.  They also included social metrics like compliance with “living wage” guidelines, non-discrimination compliance, assessments of employee satisfaction, assessments of stakeholder relations.

Although the food businesses cited interest in the local food movement (“100 mile diet”), none incorporated an assessment of LOCUS, or participated in LOCUS disclosures on their products.

LOCUS is a product disclosure that defines the geographic average site of value addition for a product or service, and the degree of variance from that geographic average. LOCUS is stated in latitude and longitude. As a product disclosure, a small map of North America is printed with a green area identifying where a product can be sold to comply with “100-mile” diet (LOCUS within 100 miles, with less than 100 mile variance), and in blue with “500-mile” compliance.

Retailers and manufacturers may also be assessed for their organizational LOCUS compliance/excellence. A bronze level retailer makes 25% of its revenues in the blue zone. A silver level retailer makes 50% of its revenues in the blue zone. And a gold level retailer makes 75% of it revenues from blue zone products/services.

Similar guidelines apply to manufacturers and producers.

Although there is no definitive research conducted, or even possible, a very very small percentage of food purchased at groceries in the country, comply with either metric.

If the site of value addition (LOCUS) is not disclosed, then those that desire to eat locally won’t know if they are in fact. (I have some ultra-orthodox Jewish friends – and family – that are very conscientious about only eating kosher food. They are religious about it.)

If the LOCUS of products and services is disclosed, then there will be a means for consumers to include that consideration in their purchasing decisions. If not, and there is no governmental emphasis on regional economic development and balance, and no consumer preference possible, then we will experience an increasingly global marketplace, with all of its negative consequences.

• Maldistribution of income/purchasing power
• Vulnerability to unavailability of key goods due to political instability and supply chain disruptions
• Inflation due to very likely long-term increases in transportation costs

Regionally healthy and balanced economies are important.

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The Supply Trane – The Beginning of my Lunch Inquiry

I hope folks got my reference to the great JC (thats John Coltrane – “Chasing the Trane”).

My wife made lunch yesterday and she made the exercise to “Chase the Trane”, too easy (I think).

We had baked potatoes grown in our backyard, and some grown at friends’ around 7 miles away. That was grown with my wife’s pleasurable labor (seeding, watering, weeding), in soil using organic compost that I myself piled and turned. Fair trade yes. Locus – Greenfield, MA. Organic – yes.

We had cabbage purchased from a farmstand about 3 miles from our home. I have to ask where and how it was grown.

Now the tough ones.

We had tofu under the “Nature’s Promise” brand, Stop and Shop’s private label brand (maybe others’ as well). “Distributed by Foodhold USA LLC, Landover, MD 20785, 1-877-846-9949”

Ingredients listed were water, whole organic soybeans, magnesium chloride.

Purchased from a Stop and Shop about 2 miles from my home. I don’t know if they will share the proportion of the price that is their cost, and the proportion that is value-added at the store, or what their in-store cost structure consists of. (Product purchase price, delivery costs, in store labor, in store overhead, in store profit.)

I want to thank everyone involved at every phase.

Where and how was the tofu made and packed? (The packaging materials are not listed as an ingredient, but they are part of the production process). The address listed is not an indication of where that batch was made. It obviously was made by a private label manufacturer then assigned the “Nature’s Promise” brand name on packaging, unlikely made in Landover, MD.

What is the cost structure at that point in the value “trane”? The packaging, the logistics  (Materials, labor, overhead items).

Then, the ingredients. Where were the soybeans grown? Its noted as certified organic, so I’ll assume that QAI is doing its job in attesting to that. How were they grown, how harvested? What is the supply trane for organic soybeans?

The magnesium chloride? No we’re talking about industrial chemicals of some sort, a very very different supply chain.

Finally, for a snack, I had some “Craisins”, purchased at a BJ’s a few miles from my house. Delivered from some Oceanspray plant, packaged in a ziplock pouch package. (Another industrial chemical value chain).

Cranberries (from where, how grown, how transported to where) and Sugar (from where, how processed, how grown, how transported to where).

We don’t ask about the water in a river. What cloud did you originate from? Where did your drops evaporate from? What watersheds did your rain fall, what trickles, streams, larger streams, rivers did these % of drops emerge from.

But, we are concerned that the water is water.

In the case of products, I am concerned that the labor in the product is fair labor, duly compensated, humanely treated. I want my thanks to be free from static, free from a necessary apology.

That is the difference between a product that is what it says it is. “Cranberries made and grown in accordance with law and humane conventions”, not just “cranberries”.

And, I am concerned with the miles of transport and the location of the value addition to get to me. I favor a decentral, universal employment value trane, where products are made close to home, value addition close to home. (“Close” can be 3 miles away for potatoes, or 200 miles away for packaging. “Close” is  not 3000 miles away for potatoes, and 2000 miles away for the plastic in the packaging.)

But, maybe I’m just looking for a hook, an unnecessary justification to my long life.

Something more specific than dollars spent with love and general appreciation, but actual appreciation for the specific tributary and work of others’ hand and brain.

I already have a change in view resulting from “chasing the trane”. My dollars will now be spent as a drop of appreciation, my dollar vote.

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Sustainable Product Disclosure – What Belongs There

If we were really interested in some indication of whether a product or service complied with a definition of “sustainable”, what would that include?

When people speak of sustainable currently, most people think of something comprehensive, more than one characteristic.

So what characteristics would that entail? How important is each characteristic to consumers and to an assessment of “objective” sustainability? How could that be measured, disclosed, audited and how would stakeholders (suppliers, distributors, retailers, etc.) come to consent?

I like using food as an example because I am familiar with the industry, its supply chain paths, some of the key institutions (at least in natural foods), the demands of consumers. Most importantly we put food into our own bodies, and are more concerned about food than about something that is less intimate. (Not enough of us.)

Once a diclosure is mandated by law, it is usually complied with. There are severe and expensive penalties and other means of accountability for violations. (Mandatory recalls, fines). The discretionary disclosures are more contreversial and actively contested.

The characteristics that I care about for food are:

1. Bio-dynamic/Organic/natural/conventional (There are objective designations only of organic and conventional, and the organic guidelines took 15 years to get defined and approved.)

2. Nutritional components, ingredients (FDA mandated)

3. Whether the production, handling, distribution, retailing was done in a quality and hygenic manner. (Assumption that if it reaches stores that it complies with health and safety laws. There are varying quality standards however, and many manufacturers have custom and industry certifications.)

4. Recyclable packaging – Life cycle (No law on compliance, nor disclosure definitions.)

5. Where it was made – Locus (No law on disclosure of manufacturing location or average location of value addition – Locus)

6. Whether living wage was paid throughout the supply chain (No law or convention on disclosure. Assumption is that throughout the supply chain, providers abided by applicable federal and local employment law, ie minimum wage, etc.)

7. How much energy was consumed to make, package, deliver the product (No law or convention)

8. What toxins were generated in the process of manufacture, transportation, distribution (No law or convention, some implication of absence of toxins in some processes by organic certification)

Well, even though only a small portion of the information that I would regard as important for a citizen’s consideration is currently required by law or convention, there is no current mass movement for more complete disclosure.

What gets in the way?

Certainly there are some data collection obstacles and inconveniences. More importantly, there are institutional objections particularly made by larger, global institutions. In natural foods, as in all food supply, large institutions dominate the business.

Retailing – Whole Foods Market (publicly traded),  Trader Joes (European privately held) , large grocery chains, even coops are often large businesses now

Wholesaling – United Natural Foods (publicly traded, almost a monopoly)

Manufacture – More small businesses, but institutionalized into serving the global/continental supply chain.

Trader Joe’s, Whole Foods Market don’t want LOCUS disclosure. United Natural Foods don’t want LOCUS disclosure, unless pressed by an actual regional foods, regional economy movement.

LOCUS disclosures disadvantage mass production, mass distribution, mass retailing.

When the Sustainability metric is proposed (in addition to organic and kosher designations), there will be a fight about regionalism vs globalism. Globalism will likely win, sadly.

Please support regional economy though. It is optimal in a sustainable society, affording optimal mix of economies of scale with accountability and minimization of transportation requirements.

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Product Disclosure

Currently there is no product or supplier designation for compliance with comprehensive sustainability definitions.

Its hard to know if that is because the definition of sustainability is difficult to articulate and/or difficult to define a consented universal definition.

There are ISO type certifications of suppliers, manufacturers, distributors, retailers, etc, and those aren’t used as widely or disclosed widely on products or even on shareholder communications.

Aside from product disclosures and direct stakeholder relations, companies don’t generally communicate much with the public, or are asked to. We see product packaging, job ads, financial reports and only on publicly traded companies, maybe some other marketing oriented educational programs. Those are very limited communications.

And, on product packaging, there are limited disclosures. I am most familiar with food packaging. I’m looking at an organic multi-grain bread from Trader Joe’s (probably manufactured by Vermont Bread – a perishable that requires local distribution by an organic certified manufacturer).

On the package is “Trader Joe’s”, “Multigrain Bread” “No artificial colors or flavors, no artificial preservatives”. Net wt 20 oz, a barcode, USDA required nutritional information, USDA Organic certification, and identification of the certifying agency – QAI, and a kosher certification logo.

No indication of where the product was made or where the ingredients to the product was made, or where the product complies with 100-mile and 500-mile sourcing (LOCUS). No indication of fair trade authorization, living wage compliance, ISO 9000 series (quality) certification of the manufacturer and supply chain, ISO 14000 (environmental) certification of the manufacturer and supply chain,  life cycle handling requirements of product and packaging.

Consumers don’t ask for it, the federal government doesn’t require it, retailers don’t require it.

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Introducing “Locus”

I remember hearing a Sweet Honey in the Rock song 20 years ago “Are My Hands Clean”, that traced the production of a fashion shirt from the source of its materials, labor, machining, all value-addition. Cotton from who knows where, oil drilled in Bahrain -> refined in ____->made into polyester resin in ____-> blend spun in Santo Domingo, assembled in El Salvador, warehoused in Texas.

Where was that shirt made? (How is it even possible to answer that question?)

That single shirt had traveled 30,000 miles, through supply chains owned by 40 or so very giant corporations, to make a product that cost 10% less on the shelf in $, but generated much more corporate profits, than an equally durable shirt made from regional fabrics, sewn regionally, to regional customers, in regionally distinct styles.

Again, where was that shirt made? (How is it even possible to answer that question?)

The answer is “Locus”. Locus is a concept of identifying the geographic center of value-addition using simple latitude and longitude, and the cumulative variance from that latitude and longitude, proportional to price paid.

So, for example, a pound of granola manufactured in New England might sell through a food cooperative in New York.

The supply chain includes:

Oats – grown in Saskatchewan (value added there), shipped to manufacturer in New England (value addition of getting from Saskatchewan to New England, locus would be the average between the locales). Honey collected in New York state (from apple pollination) and then shipped to New England. Canola oil from seed in North Dakota, milled into oil somewhere else in North Dakota, shipped to New England. Granola mixed and baked in New England (proportional value added at that plant), shipped to distributor in Connecticut, then shipped to food co-op in Brooklyn.

That supply chain is complex (if you knew the complete ingredient list and supply chain), but at least a considerable portion of the value-addition occurs relatively close to home.

The locus for that granola product might be somewhere in Ohio. Average of oats, canola oil, honey, labor and processing value addition in New England, distribution to and display in Brooklyn.

Even though the product’s locus would be somewhere in Ohio, the variance for that product (supplies coming from Canada and Great Plains), would be a larger number than the variance for a product from materials grown, processed, and distributed to the locus in Ohio.

The two numbers, “locus” and “variance”, then tell a consumer a great deal about where a product was made, and other value-addition processes.

I think such information would be critical to consumers that valued their community’s health as a characteristic of the product and one’s relationship to it.

Many of us play with attempting a “100-mile diet”. It would be useful to know to what extent that is true.

How do we know? And, how do we compare between options?

In auditing such a supply chain, the results are staggering. Most staggering to me was the degree of “value-addition” that occurs in getting a product the last mile, retailing. For example, a pound of granola that one purchases for $3.00/pound, is sold by the manufacturer for $1.50/pound.

50% of the “value-addition” is in the marketing of the product. The farmers, the manufacturers of the product each make some profit and compensation for their work, but the majority of profits is in the sales portion of the value-addition process.

Ironically, our loved food coops are among the least efficient in adding value in distribution and retailing (but at least it stays local), while giants like Wal-Mart are considerably more efficient.

I’ll talk about this project much more over the years.

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