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Friday, July 29, 2011

Localwashing-the Mcdonald's Way

McDonalds, the food corporation that controls much of the fast food market, developed a new advertising campaign in July 2010 to run in western Washington State which focused on "local" as part of a campaign. The company’s Press Release stated, "McDonalds is taking the bold step to provide more transparency" in its sourcing. The ads were labeled"From Here" and have been on TV, billboards, online, and in print since August 2010.

The campaign's emphasis was on the local component:

- 88% of apples served at McDonald's in western Washington is fromWashington State.

- 95% of French fries and hash browns served at McDonald's in westernWashington is from Washington.

- 95 out of every 100 Filet-O-Fish sandwiches served here come from thecold waters of the Pacific Northwest.

- McDonald's purchased over 497,000 gallons of Washington milk fromDarigold, a Northwest cooperative owned by over 500 dairy farmers.

Critics believe that McDonalds'campaign is disingenuous because it is only touting the local products is uses. Since the campaign started, consumers have clearly been aware that the company still uses unhealthy ingredients, partially hydrogenated soybean oil and high fructose corn syrup on some of them. McDonalds has been targeted for localwashing; jumping on the buy-local bandwagon, an initiative many of its food counterparts have recently been adopting.

What is it about the local food movement that resonates with people? According to UTNE reader locally grown food has soared in popularity. The United States is now home to 4,385 active farmer’s markets, one out of every three of them started since 2000, and food co-ops and neighborhood green grocers are on the rise as well.

Walmart has also contributed to the buy-local campaign. Accordingto Stacie Mitchell, from the New Rules Project, Walmart currently “captures more than one of every five dollars spent on groceries (UTNE).” The food industry is primed for creating a positive impact on the community through buy-local campaigns, but what does this mean for multinational corporations, that use such products alongside those with unhealthy ingredients?

The local movement is supported by encouraging people to buy locally no matter if it's from your neighborhood mom and pop store or a large chain in your neighborhood. Many believe that buying local is part of a grassroots movement, supporting local producers from smaller, family-owned businesses and that this grassroots model cannot be applied to multinational companies like McDonalds and Walmart.

What could be a positive solution for large food companies to sell products with local ingredients? Changing every ingredient to be healthier as well as local would be a start. McDonalds' ad campaign, which is attempting to persuade people into thinking that the company has changed its health credo is deceitful, primarily because it is not announcing the change in all the products it sells. Highlighting only the local aspects of the product will not have lasting power with smart consumers but will instead create skepticism about the nutritional value of the product.

As for the case of McDonalds, making a big claim about its local products while putting a disclaimer at the bottom of the ads stating: participation and duration may vary, is not transparency. “It’s about stating a commitment to being socially and environmentally responsible throughout the entire brand.” According to Michelle Barry, senior vice president of the Hartman Group, “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.” If a company makes a huge statement about its products having local ingredients with a disclaimer, it is not instilling trust in those socially conscious consumers.”

Buy-local campaigns can have a positive impact on the community because big brands have the purchasing power and market capabilities to support local causes in a big way. As part of its local initiative, Walmart has been selling peaches from Georgia and potatoes from Maine, supporting farmers. It is equally important, however, for the company to be transparent about what it is working on and what it needs improvement on, while not making bold statements that will steer consumers into thinking that the company is greener than it actually is.

The key is for companies to understand how to be sincerely transparent and acknowledge what conscientious consumers want-complete transparency and a better quality product from a committed company that aims at carrying out its credo through all facets of the brand.

Tuesday, July 26, 2011

Reimagining Sustainability and Success

Marc Gunther's blog review on Carol Sandford's most recent book (2011) incited a great debate among CSR practitioners.

Although I did not read the book in full, I do want to respond to a few things that Carol and Marc have discussed in the blog. What interests me about their particular viewpoint is that it takes both a holistic (and somewhat more radical) approach in looking at how business should be functioning in society today: like ecological and biological systems which both adapt to the changing world around them. Carol believes the most successful companies can function in this way and she gives half a dozen examples. Companies that rethink their purpose, reorganize themselves internally to draw upon creativity and passion among employees and management. The holistic approach is for them to integrate responsible behavior into the "way they do everything they do." The question is, can we think of business' role in capitalism to function in such a way? Perhaps cultivating and then adapting to change, like biological and ecological systems do, can be in the form of corporate responsibility.

Gunther explains Carol's belief of ridding CSR as a role and blurring the boundaries between various departments in order to invite everyone to find natural ways of being creative and innovative, connecting their work to a larger purpose.

Carol says embedding sustainability doesn't provide us with an end result. "To what end?" she says. Setting targets and metrics within the CSR departments only silos people to focusing on those targets rather than allowing them to feel free to express their values and beliefs at work. Ultimately, both Gunther and Carol believe that dissolving departmental boundaries, CSR departments included, will broaden the functions of the company to help focus on the whole of the business and its impact on society.

I do support the holistic aspect of business operations but I think that dissolving CSR's role as well as the department, is not going to help a company organically grow to be more responsible. Although CSR departments are nascent, CSR Managers are to provide their expertise in forging a path that can be integrated throughout the whole business. To train employees, to created internal buy-in among management and to show metrics on the success of sustainability within the company. I do agree that employees need to feel like they can foster their creativity and communicate their personal values and morals while working, but who will instill this type of initial response? If we take away CSR departments, we prevent an conduit to disseminating knowledge and we prevent expertise of people who will propel the movement to mainstream, ultimately providing for a seamless integration into all facets of the company.

The challenge is to both involve metrics as well as preventing "system's managers" or those who think CSR is just part of business. The goal should be to help employees and managers contribute to responsible actions because they feel the impact on the greater whole-society at large, among every living entity that is affected by the company. Fuelling this practice will allow companies to think holistically and to be moved by morals and beliefs and education, setting examples naturally, for other brands to follow. There are in fact many brands that exist to only improve society and their brand explains their story (The Body Shop, Seventh Generation, Sambazon). Other companies have the challenge to find direct and transparent links to their responsible actions, so they do not come across as adopting standards as a PR cover up.

The holistic approach involves government, watchdog groups, NGOs and consumers, who are becoming the leaders in this movement. By developing strong relationships with stakeholders, Carol believes that it will "build caring into our business relationships" rather than adding it on as an appendage. This she hopes will ultimately lead to blurring the lines of distinct departments where all may apply social responsibility to their part of the company.

I will agree on the end, but not on the means of getting there. I do still hold the CSR manager/department as the renegade, the leader, the challenger of status quo, even though it operates internally, there is much to be said about experts who understand the meaning behind CSR (that it's not philanthropy but so so much more), the brand they work within (its ethos, vision and values) and the people who possess the morals and the wherewithal to take action towards improving society. I guess I am just moved by how CSR is polemical but I do think we all ultimately want the same thing. A better world to live in.

Groupon's Social Responsibility

In a society where collective action can pressure businesses to act socially responsible it is fully acknowledged that companies need to react to consumer demands. Today, there is greater urgency for businesses to respond tocollective action because now more than ever consumers are obtaining more information on companies through social media platforms that expose their business practices. There are currently some successful models of how businesses are changing corporate behavior through their purchasing power.

Groupon, currently rated the fastest growing company,owes its rapid success to collective action taken on behalf of consumers. In response to the demands of customers benefiting from Groupon's discounts given by local businesses, companies have changed the way they operated. Currently, businesses operating under the Groupon model are tirelessly trying to respond to consumer demands for discounted products and services. The increased brand exposure can have both a positive or negative results for business. If we think of how this model can apply to collective action through social responsibility-it could place an even greater demand on businesses to be socially and environmentally conscious.

Groupon's profound effect on the relationship between businesses and customers was even a surprise to founder Andrew Mason. Mason's idea was rooted in social responsibility when he first came up with the idea of “The Point”, a social media platform that would allow anyone to create a campaign based on their collective beliefs of a cause, product or service. Groupon was later developed and became the stronger business model. Mason does not deny that Groupon’s business model is profit driven but he still believes that it is a model that people love participating in, primarily because it raises business’ profile as well as increases the act of group buying at discounts-a win-win situation. All of this came out of a socially responsible concept and it is still changing the way we interact with business. When interviewed by the Wall Street Journal, Mason elaborated, "Most of the time, the things that really change theworld exist for something fundamentally selfish and then the world changing ends up being a side-effect of that." (The Wall Street Journal, Dec 18th, 2010). Mason is transparent about his goals of growing the business quickly ultimately to an IPO status and many startups will aspire to reach this level of success. However, what should resonate as a model for every corporation is that while responding to the demands of collective action by consumers, companies can develop platforms that improve society ultimately helping to sustain their own success.

Groupon's rapid rise to fastest growing startup via collective action exposes to the business world a concept of how to grow a group of conscious consumers. By operating collectively, people are well equipped to place demands on business and it can be for the improvement of society. The power of the collective mind using social media as a conduit for change will expose companies and hold them accountable for better or for worse. The challenge for businesses today is to recognize its power and how to be savvy enough to effectively use social media to convince consumers of its commitment to responsible practices.