Local is hot.

First Frity-Lay uses its “Lay’s Local” ad campaign to make us think its potato chips — produced at a rate of 10,000 bags per hour — are local. Now Starbucks®, the maker of bitter and burnt coffee, is unbranding itself by opening “Stealth Starbucks.”

What’s a “Stealth Starbucks”? It’s a Starbucks coffee shop that passes itself off as a local, independent coffee shop.

Stealth Starbucks Coffee Shops

Starbucks New "Local" Coffee Shop Under Construction

Starbucks opened its first Stealth Starbucks coffee shop in July of 2009. The shop is called 15th Avenue Coffee & Tea and is located in Seattle’s Capital Hill neighborhood. Apparently no one at Starbucks knew what a local coffee shop was like. So, according to The Seattle Times, Starbucks employees spent over a year visiting three local coffee shops to borrow ideas for creating their concept of “local” coffee shop. One group of “researchers” even carried folders labeled “Observations.” The new 15th Avenue Coffee & Tea coffee shop combines elements from all three real local coffee shops.

Nothing at 15th Avenue Coffee & Tea connects it to the Starbucks brand. (After all, this is an unbranding campaign.) In fact, the Stealth Starbucks coffee shop resembles many local coffee shops in looks and operation. Funky interior. Coffee and tea tastings at 10:00 a.m. sharp. Different options customers can choose for brewing their coffee and tea. Poetry readings and live music. Beer and Wine. And super-premium Starbucks ice cream (in unmarked containers, I assume).

15th Avenue Coffee & Tea -- Starbucks in Disguise

The Stealth Starbucks coffee shop will sell Starbucks coffee, of course — but the packages on all coffee and tea products will have the name 15th Avenue Coffee & Tea instead of Starbucks. The shop also will sell coffee that other Starbucks shops don’t sell. Shop employees also will roast coffee in small batches, the way real local coffee shops do. So hopefully the coffee bought at the Stealth Starbucks shops won’t taste bitter and burnt.

Customers can even suggest local causes the new “local” coffee house can become involved in.

The Starbucks marketers who devised the concept of Stealth Starbucks coffee shop came up with a couple of “innovative” concepts to show that the shop is “local.” As a snack food chain, Starbucks had to standardize its coffee and pastries to maintain the same level of consistency throughout its 16,000 world-wide locations. So in their American shops, they got rid of their baristers and put in automatic espresso makers. The espresso machines guarantee that the coffee will taste the same in every Starbucks shop. But 15th Avenue Coffee & Tea is using baristers to make coffee manually using La Marzocco espresso machines.

Inside 15th Avenue Coffee & Tea -- No Signs of the Starbucks Brand

When it first started out, Starbucks used to buy locally made patstries. But as it expanded, Starbucks dropped local bakeries and turned to using “thaw and serve” pastries. Today, a limited number of bakeries make the pasteries you buy at Starbucks. After they’re baked, the pastries are flash frozen and then shipped to the Starbucks shops throughout the country, where the pastries are thawed out and sold. But 15th Avenue Coffee & Tea Starbucks will buy its pastries from a local bakery.

On November 18, Starbucks opened its second Stealth Starbucks shop, called Roy Street Coffee & Tea, in the same Capital Hill neighborhood as the first. Following Starbucks’ marketing plan, the coffee and tea products at this shop will carry the name “Roy Street Coffee & Tea.” For the sake of variety, coffee and tea tastings at Roy Street Coffee & Tea are at 2:00 p.m. sharp instead of 10:00 a.m. The new shop also will sell a few things not sold in 15th Avenue Coffee & Tea.

Starbucks plans to set up at least one more Stealth Starbucks coffee shop in Seattle. If the shops are successful, Starbucks will roll out Stealth Starbucks shops in other cities. Each shop will have a name that will make people think the shop is part of the community.

Stealth Starbucks Coffee Shops with a Story

Inside 15th Avenue Coffee & Tea -- Not Your Typical Neighborhood Coffee Shop

In my first post on the “Lay’s Local” ad campaign, I mentioned how Frito-Lay preceded it with a “Happiness is Simple” marketing campaign. “Happiness Is Simple” tried to make people nostalgic for the simpler times they believed existed before today’s economic problems arose. The Frito-Lay’s marketers tried to link that nostaliga with Lay’s Potato Chips. In my second post on the “Lay’s Local” ad campaign, I mentioned how industrial organic food comes with a story. The purpose of the story is to make us feel good about the food we’re buying.

It turns out that — like the Frito-Lay marketers — the Starbucks marketers are using both nostalgia and stories in developing and promoting their Stealth Starbucks coffee shops. The Seattle Times provides a telling quote from Michelle Barry. She’s the senior vice president of Hartman Group, a market-research company in Bellevue, Washington. Barry says that

It’s not about nostalgia per se, but more about telling a story and reappropriating some things from the past and re-imagining them in a new environment.

The nostaslgia and the story for the Stealth Starbucks coffee shops come from using salvaged materials in building and furnishing them. For 15th Avenue Coffee & Tea, some of the furnishings came from former Starbucks coffee shops. Other salvaged materials included wood from an old ship and from a retired barn. For Roy Street Coffee & Tea, some furnishings came from a local movie set, a local high school, and antique shops.

The varied materials and furniture give each Stealth Starbucks coffee shop a different look and feel, making it appear that the shops are actually independent and local.

Why Stealth Starbucks Coffee Shops Aren’t Local

The Starbucks marketers want us to think their Stealth Starbucks coffee shops are local and independent. But the shops aren’t. Just to drive the point home, let’s look at some criteria that distinguishes a local coffee shop from a chain coffee shop:

I don’t think many people who like to buy their coffee from local, independent coffee shops will be fooled by the new Stealth Starbucks shops. After all, they’ve deliberately chosen not to buy their coffee at Starbucks. They prefer to support their local communities. They probably already know that $68.00 of every $100.00 spent locally stays in the community. But only $43.00 spend at a chain store such as Starbucks stays in the community.

It will be interesting to see how the Stealth Starbucks coffee shops progress as they’re opened outside of Seattle.

Have any of you been to a Stealth Starbucks coffee shop yet? If you have, write a comment to let us know what you think of them.

I just read an interesting article in The New York Times that said Disney is redesigning its Disney Store in shopping malls to make the stores more like entertainment centers. Instead of displaying rows of Disney toys, the Disney stores will provide an experiential shopping event for children. In fact, Disney might even rebrand its Disney Store as Imagination Park. Disney is making the change hoping that

children [will] clamor to visit the stores and stay longer, perhaps bolstering sales as a result.

To support the change, Jim Fielding, president of Disney Stores Worldwide, says that

the world does not need another place to sell Disney merchandise — this only works if it’s an experience.

When a child goes into one of the new Disney stores, Fielding wants the child’s shopping experience to be “the best 30 minutes of a child’s day.” And what an experience those thirty minutes will be! In each store,

theaters will allow children to watch film clips of their own selection, participate in karaoke contests or chat live with Disney Channel stars via satellite. Computer chips embedded in packaging will activate hidden features. Walk by a “magic mirror” while holding a Princess tiara, for instance, and Cinderella might appear and say something to you.

It’s your birthday? With the push of a button, eight 13-foot-tall Lucite trees will crackle with video-projected fireworks and sound. There will be a scent component; if a clip from Disney’s coming “A Christmas Carol” is playing in the theater, the whole store might suddenly be made to smell like a Christmas tree.

The Disney board has already approved the concept for the new Disney stores. So now Disney will spend $1 million on each of its 340 stores in the U.S. and Europe to renovate them. Plus Disney will open new Disney stores, including a possible flagship store in Times Square.

Most of the chain toy stores in the malls have gone out of business because of the recession. Fielding expects the new Disney stores to be the only toy stores left in the malls. So Disney and its Disney toys will face no competition. Besides, Fielding thinks that “[e]very mall in America is desperate for newness and freshness.”

I have a few problems with Disney’s new Disney Store concept. First, Disney is using the stores to manipulate small children who haven’t developed the critical-thinking skills to know that they’re being manipulated. To me, the new Disney stores are disguised ads for Disney products, including new movies. Even the Disney marketers admit that when they talk about showing clips in the theater promoting “A Christmas Carol” and also giving off the smell of Christmas trees to increase the kids’ desire to see the movie.

The whole new Disney Store “experience” is simply a vehicle for selling Disney toys and other products. Disney’s advertising tactics prey on little kids.

Second, Disney is turning a new generation of children into consumers. In fact, Fielding’s statement that the time spent in a new Disney store will be “the best 30 minutes of a child’s day” shows how twisted his values are. The “best 30 minutes”? Come on! If time spent in a Disney store are the best half hour in a kid’s day, both the kid and his or her parents have a problem with the quality of their lives. Wouldn’t the family be better off visiting a museum or hiking or perhaps spending quality time around the table?

Third, if the new Disney stores are going to be in all the malls, those stores will quickly become just another cookie-cutter fixture in a mall. What might have been a thrilling new concept will become dull and stale through overexposure. After all, cookie-cutter stores are what malls specialize in.

Fifth, Disney doesn’t care a fig about the people who buy from their stores. Last year Disney took in $30 billion worldwide. All the profits left the towns and cities where people bought the merchandise and went to Disney corporate. To Disney, citizens of towns and cities are simply faceless “consumers” whose role in life is to buy Disney products to drive up Disney profits. Disney doesn’t consider its customers as real people.

Disney has taken over the lives of our children — to our children’s detriment. What do you think about the new Disney stores?

By the way, you can read the entire Disney article here.

The marketers and brand managers at Frito-Lay just don’t seem to get it.

Over the past several weeks, I’ve noticed that one or more people from PepsiCo in Plano, Texas have been visiting at my blog. Lisa and I are thrilled that people at PepsiCo have noticed us.

Then I saw that a few of the visitors came from a blog by Mandy Lozano. Lozano is a 2009 graduate of the University of Virginia’s Darden School of Business and now works at Frito-Lay in brand management. In her blog post, Lozano waxes enthusiastically about a presentation on the “Lay’s Local” ad campaign that Dave Skena, VP of Marketing at Frito-Lay, gave on September 26th at the Darden Marketing Forum.

Lozano thinks that Skena’s presentation “knocked it out of the park.” Seeing how the videos of Lay’s “local” industrial farmers moved the audience, she says, “warmed [her] little heart.” And in an aside, she mentions my “jaded” view of the “Lay’s Local” campaign and how my heart isn’t “warm-able” [sic]. Lozano thinks I didn’t do my research because the Frito-Lay operations are “highly-localized” [sic]. Perhaps she didn’t read my post on Part 3 of the “Lay’s Local” campaign carefully enough.

I agree with Lozano that the Lay’s® Potato Chips operations are highly localized because the potatoes are processed into chips in plants near the potato farms. But almost every potato chip company turns its potatoes into chips at processing plants near their potato farms. After all, most potato chips are locally made.

But being locally made doesn’t necessarily make potato chips local.

Are Lay’s Potato Chips Local?

Let’s go over the criteria again that distinguishes Lay’s Potato Chips from locally produced food:

Citizens vs. Consumers

An important distinction between local food and Lay’s Potato Chips is the role of the buyer. With local food, both the buyer and the seller consider themselves as citizens — that is, members of a local community. One goal of the local food movement is to emphasize the importance of local merchants and local shoppers to the vitality of a city or town. Another goal is to emphasize the personal relationship between merchant and shopper.

Local merchants are interested in their community. Local merchants tend to donate more to local causes than chain stores or global conglomerates such as PepsiCo and its snack food division, Frito-Lay. Local merchants also are more interested in what’s happening in their community and are even willing to pay more in taxes if doing that will benefit their community. Local merchants know the people who shop in their stores, and the shoppers know the merchants.

The marketers and brand managers at Frito-Lay see the people who buy their products as consumers — not as citizens of local communities. The consumers’ role is to buy Frito-Lay’s salty snack foods to drive up Frito-Lay’s profits for PepsiCo.

For information on how people came to be viewed as consumers, see my post How Chain Stores Turned Us into Consumers.

See also:

• The Truth about Frito-Lay’s “Lay’s Local” Marketing Campaign — Part 1
• The Truth about Frito-Lay’s “Lay’s Local” Marketing Campaign — Part2
• The Truth about Frito-Lay’s “Lay’s Local” Marketing Campaign — Part 3
• The Truth about Frito-Lay’s “Lay’s Local Marketing Campaign — Part 4: Frito-Lay’s Dirty Little Secret

When it comes to shopping, most of us Americans see ourselves as consumers instead of members of a community. And as consumers, we’re interested in buying things at low prices — not in helping our town or city to survive economically. A recent online article in The Boston Globe about a 16-year campaign in St. Albans, Vermont to stop a WalMart from opening illustrates this attitude.

Chain Stores vs. Local Retail Stores in St. Albans, Vermont

The debate in St. Albans over WalMart pits the big-box giant against the local retail stores. If you’ve read my blog posts about Frito-Lay’s “Lay’s Local” marketing campaign, you can see that the issue between Frito-Lay and local retail stores is similar to the issue between WalMart and local retail stores in St. Albans. Throughout the country, Frito-Lay, which is the multi-billion-dollar snack food division of the global food conglomerate Pepsico, is undermining local economies. And throughout the country — as personified in St. Albans — the global chain store WalMart is undermining local economies.

In St. Albans, WalMart wants to build a 160,000-square-foot Supercenter in a corn field. That 160,000 square feet, by the way, is around twice the size of a football field, not counting the acres of paved-over parking spaces that will go with it. One of the opponents says that if WalMart had agreed to go into a 75,000-square-foot store in the downtown area, it would have had its store long ago.

But WalMart didn’t want that concession because supposedly it would cost too much to build underground parking. Instead, WalMart insists on building its 160,000-square-foot Supercenter in the cornfield. What WalMart doesn’t say, though, was that a small downtown store doesn’t fit its business model of building gigantic Supercenters outside downtown areas, which forces people to drive to them do do their shopping.

What the WalMart Supporters Claim

In the article, The Boston Globe says that the WalMart supporters labeled the opposition “as elitist for keeping jobs and cheaper goods out of a county that could use them.” A constant refrain all across the country from people who support opening a WalMart in their communities is that the WalMart store will let them buy things more cheaply than they could from local retail stores. The article quotes Bibbi Jo Magnan as saying — hopefully, with some exaggeration:

You can’t even buy a pair of underwear here. Well, you can, but it’ll cost you $30.00.

The WalMart supporters also claim that the 6,000 residents in the town need the jobs — despite the fact that, if WalMart opened, twelve local businesses would close and forty townspeople would lose their jobs. After all, says one supporter, “The need for employment outweighs the need for a cornfield.”

The developer, Jeff Davis, maintains that the WalMart supporters’ concern for low prices is a reasonable one:

If they can save a few bucks at a store like Wal-Mart, that’s a serious concern to a lot of people.

And WalMart spokesman Keith Morris labels the WalMart opponents as Luddites:

You can’t live in the past and say people should ride horses and grow their own vegetables. People are shopping, and if you don’t provide the opportunities, they will travel elsewhere to find those opportuities.

At least one supporter, Ron Vincent, seems to be conflicted when he says that he wants “to see the downtown do well, but we need to have that store.” Apparently Vincent hasn’t read studies that indicate how opening a WalMart generally kills a town’s downtown area. It seems, too, that many of the WalMart supporters don’t know about the economic analyses that show that when a WalMart opens, it often replaces higher-paying jobs that the defunct local retail stores supported with lower paying jobs in its own store.

Stacy Mitchell gives a good example of this in her book Big-Box Swindle. She talks about the Huffy bicycle manufacturer in Celina, Ohio that sold its bikes to WalMart. Every year, though, WalMart kept pressuring Huffy to lower the price of his bicycles. Finally, in 1998, Huffy had to close down its fifty-acre factory and relocated to China in order to keep selling bikes to WalMart. Huffy paid its 650 union workers $11.00 an hour plus benefits.

A few years later WalMart opened a Supercenter in the same location where Huffy had been. The town fathers were thrilled that WalMart had chosen Celina for its big-box store. And plenty of people in Celina wanted WalMart jobs that paid $7.00 an hour — $4.00 less than what Huffy had paid.

The WalMart supporters also don’t realize that, except for loss leaders such as half of the items in its grocery department and its entire CD department, WalMart’s prices are usually just as high as those of the independent stores — and, in some cases, even higher. WalMart can afford to sell groceries and CDs below cost because it can make up for the losses in the other departments. But a local grocery store or a local CD store can’t afford to sell its products at a loss. Oftentimes, too, WalMart will under price products a local retail store is selling until the store goes out of business. Then WalMart will raise the prices of the products to what its now defunct rival was charging.

You might think that consumers would compare costs and notice the higher prices of the products big-box stores like WalMart and Target and Home Depot don’t use as loss leaders. However, the chains’ pricing experts know that most consumers are familiar with the prices of just a few products such as diapers, bannanas, CDs and other commonly bought items. So the chains price those items under cost and increase the prices of the other products they sell. Because consumers know they’re getting a good deal when they buy the items used as loss leaders, they assume — wrongly — that all the other products in the store are cheaper, too.

What the WalMart Opponents Claim

The WalMart opponents want to maintain the viability and character of the St. Albans downtown area. Right now, only four WalMarts operate in Vermont. Three occupied existing stores and are 75,000 square feet. The fourth is a 115,000-square-foot Supercenter build on open land.

The opponents in St. Albans fear that if WalMart succeeds in opening the Supercenter in the cornfield, it will mark the beginning of the “WalMartization” of Vermont and the disappearance of the state’s green fields and hills. They’ve also seen how WalMart impoverishes and kills downtown areas, and they don’t want that to happen to their town — or any other part of Vermont. The WalMart supporters, they say, “are being materialistic in forfeiting natural resources and the downtown for inexpensive wares.”

The PR and Marketing Campaign That Turned Us into Consumers

Our focus on low prices is what makes big-box stores such as WalMart, Target, and Lowe’s so successful — especially in difficult economic times. As consumers, though, we haven’t always been so conscious of low prices. In fact, not so long ago, we didn’t even see ourselves as consumers but as members of our local communities. According to Stacy Mitchell in Big-Box Swindle, the change in how we perceive ourselves is a fairly recent phennomenon that began after World War II in response to — guess what? — an anti-chain movement!

When I read about the “first anti-chain movement” in Mitchell’s book, I had a sense of dejà vu. Perhaps you will, too. Here’s what she says.

America’s First Anti-Chain Movement

Although chain stores developed in the U.S. before World War I, they began to really thrive after the war. The Great Atlantic & Pacific Tea Company (A&P) was the largest chain store of the pack. It sold 11% of the nation’s groceries and was responsible for 2.5% of all retail sales in the country. That 2.5% figure might seem small to us today, but back then it was a lot. A&P was yesteryear’s WalMart. (In 2006, when Mitchell’s book was published, WalMart sold 10% of all retail sales.)

In the 1920s and 1930s, most people identified themselves primarily as members of their communities and were interested in the welfare of those communities. They saw all these chain stores moving into their cities and towns and putting the local retail stores and local grocery stores out of business. They also saw how the chain stores hurt the community. Just like today, the money shoppers spent in the chain stores left the community to go into corporate bank accounts in some other part of the country. And the CEOs who ran the chain stores weren’t interested in the communities in which their stores were located, but only in the money they could make from shoppers.

Gradually, a huge groundswell of popular opposition arose agains the chain stores. A lot of the slogans people used to protest the chain stores — such as this one from Missouri — seem familiar to us today:

Keep Ozark Dollars in the Ozarks.

Cities, towns, and states began passing laws against chains to prevent them from killing local businesses. States even began taxing chain stores. Finally, Congress got involved. In 1938, a group of congressmen sponsed a tax bill that would put the chain stores out of business. The chains fought back with a massive PR and marketing campaign that was aimed at changing the perceptions of the chain’s

• Employees
• Farmers and other suppliers
• Communities in which the chains were located
• Customers

How the Chain Stores Changed Their Employees’ Perceptions

In the late-19th and early-20th century, company owners saw their employees as automatons. Consequently, managers called their employees by their employee number. But now — under orders from corporate headquarters s– managers began using the employees’ names when speaking to them. Up till then, the employee also received low wages. Now the chains raised their employees’ pay. The employees also had their workloads decreased.

To win over organized labor, A&P and the other chain stores finally allowed their employees to form unions — something they had long fought against. But union recognition came at a high price: the American Federation of Labor agreed to oppose the congressional anti-chain legislation.

How the Chain Stores Changed The Farmers’ and Other Suppliers’ Perceptions

A&P and the other chain groceries bought their produce from farmers. If the farmers had a bumper year, they’d be paid lower proces for their goods and so lose money. Now the chain stores made the farmers think they cared about them by purchasing their surplus crops of oranges, walnuts, turkeys, and and other items. The chains lost money in those deals, but they gained the support of the farmers.

The chains treated their other suppliers the same way.

How the Chain Stores Changed the Perceptions of the Communities’ in Which They Were Located

Corporate headquarters ordered the managers of their various stores to join the local chambers of commerce. By joining a chamber and showing up at its meetings, chamber members began to think of the chain stores as caring members of their community. Corporate headquarters also sent out a bevy of public speakers to go to civic functions and clubs and talk up the great things the chain stores were doing for the community.

How the Chain Stores Changed Their Customers’ Perceptions

The biggest change came about in how customers saw themselves. Through radio and newspaper ads and public speakers, the chains began focusing on how they saved people money by bringing them quality goods at low prices. The media blitz avoided any mention of how the stores affected the communities by putting local retail stores out of business. The more the customers saw themselves as consumers, the less they saw themselves as citizens of their town or city or as workers, farmers, and manufacturers.

The campaign worked. Not only did Congress not pass the bill in 1939, but people in towns and cities throughout the country no longer saw themselves as members of the communities in which they lived. No longer were people concerned that the money they spent at chain stores left the community. They cared only about getting things at lower prices than before. And no longer were people troubled because local retail stores and local grocery stores were being put out of business by chain stores. All they cared about was buying things more cheaply than before.

People had become consumers.

The Second Anti-Chain Movement

Today citizens are formenting a second anti-chain movement. The reasons for their “revolt” are similar to the ones in America’s first anti-chain movement.

Chains Don’t Care About the Community

Chain stores such as WalMart and Target try to make everyone think they’re concerned members of the community. The chain stores give donations and grants to local communities — often after corporate approval. And, based on a business decision at corporate, chain stores often engage in cause branding — associating themselves with a particular cause, such as cancer or diabetes. By linking itself to a cause, the chain makes consumers think it cares about that cause. But the chain doesn’t really care. The corporate honchos hire a marketing company such as Cone that specialize in cause branding to develop a strategy they can use to gain consumers’ loyalty by supporting a particular cause. After all, as Cone says on its website:

Today, a company that directs its unique assets to have a significant and sustainable impact on society will strengthen reputation, employee morale and stakeholder loyalty in an engaging and authentic way.

For chains, supporting a cause is just another business decision.

Even when a chain donates money to a community, studies indicate that locally owned stores actually donate more money to their communities than chains do. The reason is because the owners of local retail stores and local grocery stores see themselves as members of those communities. The people who run the chain stores are absentee landlords who don’t care about the community.

Chains Drain Money from the Community

No matter how much a chain extols its virtues, the fact still remains that the chain store drains money from the local community and sends it to some far-off corporate headquarters. Money spent at a local store stays in the community and helps the community.

Chains Pay Low Wages and Encourage Part-Time Work

Chains tend to pay low wages. Anyone who’s read Barbara Eherenreich’s Nickel and Dimed: On (Not) Getting By in America, has read first-hand accounts of how chains don’t pay living wages. Chains also rely heavily on part-time workers to avoid the costs of paying them health care. Some chains now are reducing the numbers of full-time workers to save money and reduce costs.

Local businesses often pay better wages than chains. They also care more about their employees’ welfare. In hard economic times they either lay people off unwillingly or try to work out ways to avoid layoffs.

Chains Create a Large Carbon Footprint

Chains create a large carbon footprint because they were designed to make people drive to them. That’s why chain stores like WalMart are located outside the downtown area and are surrounded by acres of paved-over parking spaces.

Downtown retail stores are walkable because they’re located along sidewalks. People who shop at them don’t leave a large carbon footprint.

Chains Create Water and Air Pollution

Because the acres of parking spaces around chain stores and malls are paved over, there’s no soil to absorb rainfall. As a result, the runoff goes into nearby streams, rivers, and lakes, creating water pollution. The necessity of driving to the chain store — either a free-standing one or one that’s in a mall — increases air pollution.

Chains Discourage a Sense of Community in Shoppers

Shoppers often need to drive miles to reach a chain store or shopping mall. That distance makes shoppers leave their communities, which reduces their sense of being part of those communities.

Local retail stores do help develop a sense of community. The owners generally are actively involved in their community and know many of their customers by name. Shoppers often know other shoppers they meet downtown. The people know one another and care about one another.

Chains Don’t Sell Quality Items at Low Prices

Before we stopped shopping at chain stores, Lisa and I were constantly frustrated by the Mr. Coffee coffee maker that we bought at WalMart. It constantly broke and we had to keep replacing it. So even though the coffee maker was cheap, we ended up paying more because we had to buy several of them instead of just one.

What’s the moral of this story? Chain stores such as WalMart and Home Depot and Lowe’s offer low-priced items. But often, to keep the prices low the manufacturers use low-quality parts. A similar item — a lawn mower, say — in a local hardware store might be more expensive than a similar one at WalMart. But chances are that the parts used in the lawn mower are of higher quality than those in the WalMart mower. Consequently, the more expensive lawn mower will last longer. So which lawn mower actually costs more: the cheaper one that will break down sooner and need to be replaced sooner or the more expensive one that will last longer?

By the way, if you see two similar products at a chain store and at a local store, compare the model numbers. Chances are the numbers are different. One was made specifically for that chain store and the other for the local store.

Community Members First — Consumers Second (or Third . . . or Fourth . . . )

America’s second anti-chain movement is about the same issues as the first movement. It’s time we begin seeing ourselves once more as members of our towns and cities instead of as people whose role is to buy things at low prices.

In Parts 1 and 2, we saw how the marketers behind Frito-Lay’s “Lay’s Local” ad campaign are trying to persuade us that Lay’s® Potato Chips are part of the local food movement because the potatoes are gown by “local” farmers and are made into potato chips local processing plants. We also saw how the Lay’s marketers cleverly don’t define what they mean by “local” so that we consumers will read our own definitions into the term.

In Part 3, we saw that while Lay’s Potato Chips are manufactured locally, you really can’t consider their potato chips as part of the local food movement for several reasons. First, Frito-Lay is the $12 billion snack food unit of PepsiCo, which is an international company whose corporate headquarters are in Plano, Texas. Second, Frito-Lay owns the local processing plants that turn the so-called local farmers’ potatos into Lay’s Potato Chips. Third, the money Frito-Lay earns from processing the potatoes into Lay’s Potato Chips doesn’t stay in the plants’ communities, but goes to corporate headquarters in Plano, Texas.

Frito-Lay’s Dirty Little Secret

But in all their talk about Lay’s Potato Chips being part of the local food movement because their chips are made locally, the marketers behind the “Lay’s Local” ad campaign have been keeping a dirty little secret from of us. What’s that secret? Simply this: Almost all potato chips are made locally! That’s right. As far as their being made locally goes, Lay’s Potato Chips are no different from the chips made by just about every other potato chip company.

But don’t take just my word for it. You can check it out for yourself on PotatoPro.com, which published an article in its June 10, 2009 newsletter entitled “Frito-Lay offers local potato chips.” The article states that “ALL potato processors source their potatos locally, with very few exceptions.” And then the article goes on to say that

Most potato processing factories are located right in the middle of potato growing areas. The reason is basic economics: It is expensive to transport potatoes over long distances. Furthermore, transportation is detrimental to the quality of the potatoes, resulting in extra losses during the production process. There is even an extra advantage if potatoes are processed within 24 hours after harvest, since any bruising resulting from harvesting will not develop into black spots.

The article also says that potato chips have to be distributed locally for two reasons. First, the chips are extremely fragile and can break easily when they are transported over long distances. And second, potato chips have a short shelf life. So the sooner you can get the chips to the stores, the better chance they have of being sold before their expiration dates expire.

Frito-Lay’s Reduced Carbon Footprint

The article also recognizes three definitions of “local” for making potato chips:

1. The potatoes are grown by small-scale farmers and processed in small-scale processing plants.
2. The farms grow their potatoes organically in a totally sustainable way.
3. Transporting the potatoes to nearby processing plants reduces the carbon footprint made by the trucks.

The article admits that Frito-Lay doesn’t meet the first two definitions, but says it does meet the third.

But does it really?

I think not because the article doesn’t consider the huge carbon footprint created by the industrial farmers who produced the potatoes that are processed in the nearby Frito-Lay plants. For example, consider the carbon footprint created by Walther Farms on its 14,000-acres of potato farmland in six states and one foreign country. These industrial farmers use tons of patroleum products in farming their 14,000 acres — from fertilizers to pesticides to insecticides. Because their operations are highly mechanized, they rely heavily on gas-powered machines instead of manual labor to sow, reap, and process their potatoes before shipping them to the nearby Frito-Lay processing plants.

The actual carbon footprint of the trucks that transport the potatoes from farm to plant might be small, but the carbon footprint the farmers create before they can bring those potatoes to the trucks is gigantic.

In 2007, Frito-Lay controlled over 60% of the salty snack food market in the United States, and took in over $12 billion in sales. Lay’s Potato Chips accounted for around $2.8 billion of that $12 billion. You can hardly call a company that size “local” or its potato chips local.

Not matter how the Frito-Lay’s marketers try to cut it, Lay’s Potato Chips are definitely not local and Frito-Lay and its potato chip snack food are definitely not part of the local food movement.

Lay’s Potato Chips and Regional Potato Chips

But plenty of locally and regionally made potato chips still exist today (although more and more of them are being goggled up by large companies and losing their local or regional statuses). The companies that make these potato chips actually are part of the local food movement. They are small companies — many family owned. They buy their potatoes from local farmers and turn the potatoes into chips at local plants. and they sell their potato chips locally or regionally. So you know that when you buy their potato chips, your money is really staying in your community — not going to Frito-Lay corporate headquarters in Plano, Texas, or to the corporate headquarters of some other multi-national conglomerate.

Take Rusty’s Potato Chips, for example in California. Rusty and his son make their chips by hand — 10,000 bags a week instead of the 10,000 an hour that Frito-Lay makes. They don’t use a conveyor belt, put the chips in the bag by hand, and also seal each bag by hand. They sell their chips in selected stores in southern California and in Nevada. For the past five years, Rusty’s Island Chips have consistently placed a “strong second” in the annual Who Makes the Best Potato Chip contest.

If you want to try some of Rusty’s Potato Chips, you can buy them online. We did. List night, while Lisa was looking over my draft of this post, she ordered a box. We’re going to do a blind testing and compare Rusty’s chips to Lay’s. We’ll let you know whose chips win.

Another brand is Dakota Style Chips, which are made by a small company in South Dakota that has a total of 12 people working in it. These potato chip makers cook their chips open-kettle style in single batches and then season the chips by hand.

If you want to try some Dakota Style potato chips, you also can order them online.

Currently, the third generation of family owners is making Sterzings Potato Chips. The workers still cook their chips single batch at a time the same way they did in 1933 when the company was founded. Their immediate market of this Iowa-based company is southeast Iowa, but they also ship their chips all over the country and abroad — especially to military personnel in Iraq and Afghanistan.

You can order some of their chips online yourself and try.

Those of you on the East Coast can try potato chips made by Deep River Snacks, a small family-owned company in Old Lyme, Connecticut. You can order their chips online, too.

Personally, if I have the chance to buy genuine locally or regionally made chips instead of Lay’s, I’ll jump at it. You should, too. You’ll notice a big difference in both quality and taste. Plus you’ll be supporting your local community — not some distant, faceless, multi-national corporation that’s not really interested in you or your coummunity, but in “the bottom line.”

See also:

• The Truth about Frito-Lay’s “Lay’s Local” Marketing Campaign — Part 1
• The Truth about Frito-Lay’s “Lay’s Local” Marketing Campaign — Part2
• The Truth about Frito-Lay’s “Lay’s Local” Marketing Campaign — Part 3
• “Lay’s Local” Update — They Just Don’t Seem to Get It

Lay's Billboard Ad -- Photo Courtesy of Rick McOmber

In Parts 1 and 2, we saw how the marketers behind Frito-Lay’s “Lay’s Local” ad campaign are trying to persuade us that Lay’s Potato Chips are part of the local food movement because the potatoes are gown by “local” farmers and are made into potato chips locally. We also saw how the Lay’s marketers cleverly don’t define what they mean by “local” so that we consumers will read our own definitions into the term.

People today are looking for a story behind the food they eat. The Lay’s marketers oblige us by making five “local” farmers the centerpiece of their campaign. Before we can examine the deception behind this centerpiece, we have to understand the difference between local farming and industrial farming.

Differences Between Local Farming and Industrial Farming

Local farming is what its name implies: small farms, often family run, that grow a variety of products that the farmers sell or distribute within a small radius. Industrial farming, too, is what its name implies: large farm “factories” that take in raw material such as fertilizer, pesticides, and fuel for machines to produce one or two food products such as corn, wheat, soybeans, or potatoes.

Chracteristics that distinguish the two kinds of farming include:

• Size
• Crops
• Crop rotation, fertilizers, and pesticides
• Markets
• Seeds
• Carbon footprint
• Lobbying
• Subsidies

Size
Local farms tend be a few hundred acres while industrial farms tend to be many hundreds or thousands of acres.

Crops
Local farmers generally plant a variety of crops. Often times, the farmers grow fruits and vegetables and also raise animals on the same farmland.

Potato Fields

Industrial farmers plant just one, two, or three crops on their hundreds or thousands of acres. Usually, they plant only one variety of that crop, such as just Russet Potatoes. For example, as of 2007, over half of all the farmland throughout the world used to grow potatoes was planted with the Russet Burbank potato, which McDonald’s uses for its fries. (The number of acres planeted with Russet Burbank potatoes has probably increased by now, two years later in 2009.)

Potatoes grown industrially in the United States are limited to just a few. This practice seems strange when you compare it to potato farming in Canada, where they grow dozens of varieties. A few years ago, I asked my cousin, who was a potato broker on Prince Edward Island, why. He replied that the American companies find it easier to track just a few varieties. Lisa and I tasted one of the potatoes grown on P.E.I. when we attended a MacKenzie family reunion, and the taste was incredibly different — and much better — from what we were used to in the States.

Industrial farmers also don’t mix animals with plants. Either a farmer grows corn or some other crop or raises cows or some other animal. As a result, the manure produced by animals on industrial farms becomes a hazardous waste instead of a nutrient to be put back into the soil as fertilizer.

Crop Rotation, Fertilizers, and Pesticides
Local farmers tend to rotate their crops to prevent the nutrients in the soil from become depleated. They also tend to use less chemical fertilizers and more natural fertilizers. The natural fertilizers put healthy, organic nutrients back into the soil and provide nutrients that fruits and vegetables can’t get from chemical fertilizers. Local farmers also try to limit their use of pesticides or to use natural pesticides — or even none at all.

Industrial farmers usually don’t rotate crops. Instead, they raise the same crop year after year on the same soil, relying heavily on chemical, nitrogen-based fertilizers to replace the nutrients in the soil. Industrial farmers also rely heavily on chemical pesticides and insecticides. The runoff from chemical fertilizers, pesticides, and insecticides causes serious pollution problems.

Machines and Heavy Equipment

Harvesting Potatoes

Local farmers don’t use a lot of gas-guzzling machines and heavy equipment. Industrial farmers rely heavily on planting, harvesting, and other kinds of machines.

Markets
Because their farms are small, local farmers raise just enough to sell to local and regional markets.

Because their farms are so large, industrial farmers raise far more than they can sell to local or regional markets. Consequently, industrial farmers sell their products across the country and throughout the world. They seek to open new global markets and lobby the federal government for help in opening them.

Seeds
Small farmers tend to use traditional seeds. Industrial farmers, on the other hand, use hybrid seeds to make it easier for the fruits and vegetables raised from those seeds to be shipped across the country or throughout the world. Take tomatoes, for example. Industrial farmers plant tomato seeds that will grow into tomatoes that won’t bruse when they are being transported to some distant location. Industrial farmers sacrifice flavor and quality for characteristics such as longer shelf life.

Industrial farmers also tend to use genetically modified seeds designed by chemical companies for large-scale crop production. For example, they use seeds designed to grow fruits or vegetables that can withstand certain types of herbicides or with herbicides actually inside them that can poison certain kinds of “pests.”

Carbon Footprint
Local farmers tend not to leave a large carbon footprint because they don’t use a lot of chemical fertilizers and pesticides or mechanicl equipment and deliver their crops to local and regional markets.

Industrial farmers leave a huge carbon footprint because they use fantastic amounts of chemical fertilizers and pesticides, they rely heavily on gas-driven equipment, and they transport their crops all across the country and the world.

Lobbying

Potato Chips

Local farmers encourage consumers to try “new” products such as heirloom tomatoes and apples. Industrial farmers, on the other hand, encourage (lobby) the federal government to promote a limited number of food products for us Americans to eat. I bet you can name those products on the fingers of your hand: beef, chicken, pork, and milk. Because local farmers don’t have the money or the lobbying power of industrial farmers, government agricultural policies often favor the “big boys.”

Subsidies

Originally, the federal farm subsidy program (using our tax dollars) was designed to help small farmers. Unfortunately, the industrial farmers, through their lobbying groups, took over the program and now receive most of the money.

Even though the law limits direct subsidy payments to $40,000 per person (or $80,000 per couple), industrials farms are not husband-and-wife operations. Instead, they consist of multiple owners and interlocking businesses such as joint ventures, trusts, and venture capitalists. As a result, several individuals associated with an industrial farm can receive up to $80,000 each in tax payer money in what’s called “pass-through subsidies.”

According to the Environmental Working Group, in 2007, ten percent (10%) of the farmers eligible for direct government subsidies (funded by us tax payers) received 60% of the subsidy money — industrial farmers all!

Go figure that one out!

Lay’s “Local” Farmers

The “Lay’s Local” ad campaign deceives through omission by not giving us important information about their seven “local” farmers from five “local” farms so we can make up our own minds about whether or not these farmers are indeed local.

Brian and Gary Walther of Walther Farms in Three Rivers, Michigan
What Lays wants us to know about Walther Farms is that:

• The Walther family has farmed potatoes for three generations.
• Walther Farms has been selling their potatoes to Frito-Lay to be made into Lay’s Potato Chips since 1975.

What Lays doesn’t want us to know about Walther Farms is that the farm — which Brian and Gary’s grandfather, Leonard Walther, Sr. began in the 1940s as a hobby growing vegetables on a few acres of land — has grown into a 14,000-acre “potato farming giant.” This giant farm actually consists of farms located in six states and in one foreign country (which their web site doesn’t mention):

• Michigan
• Florida
• Georgia
• Indiana
• Illinois
• Texas
• Mexico

Walther Farms employs between 50 and 100 people and has annual sales that range from $5 million to $9 million.

Potatoes (But Not 400,000 Million Pounds of Them)

In the mid-1970s, the Walthers began producing a single crop: potatoes. In 2008, when they had only 8,000 acres in six states, Walther Farms sold 85% of those potatoes — 400 million pounds — to Frito-Lay to be made into potato chips. The remaining 15% they sold as cooking potatoes to large stores such as Wal-Mart and Meijers. Now that Walther Farms has expanded into northern Mexico, the amount of potatoes they produce will increase.

On March 16, 2009, the Walthers auctioned off their original family farm (no nostalgia lost there!) as part of a sale of over 784 acres because of their increasing focus on growing potatoes. According to Jason Walther, who is Walther Farms Chief Operating Officer:

Grandma and Grandpa always believed in putting the land to its best possible use, and we’re following the same strategy by putting this excellent land in the hands of people whose focus is on crops such as sugar beets, soybeans, corn and wheat, for which the soil types are best suited.

The land they auctioned included Grandfather Leonard’s farm plus six others, which were on “high-quality farmland.” Some sites were considered good for recreational, commercial, and residential development. The Walthers auctioned the land in 27 tracts that range in size from 1.2 to 228 acres. The reason the Walthers are selling the farms is because the their land is clay, which isn’t good for growing potatoes. (Potatoes like sandy soil.)

The sale of the original family farm makes sense, though, because the Walthers no longer consider themselves a family business. Quoted in MiZib.com, Jason Walther said that

Looking at us structurally, we would look like any other organization — not a family business. Sure there is a family culture, but (we) run it like a business … and that gives us a competitive advantage.

Like owners of many industrial farms, the Walthers collect farm subsidies provided by US tax payers — you and me — in the form of pass-through subsidies. According to the Environmental Working Group’s Farm Subsidy Database, between 2003 and 2005, ten Walther family members — three generations of Walthers — received $237,857 in pass-through subsidies for their multi-million dollar business.

Walther Farms also belongs to the United States Potato Board (USPB), a nonprofit marketing group of 4000 commercial potato growers whose members seek to increase national and international demand for their potatoes.

Darrell McCrum of the Maine Potato Alliance in Mars Hill, Maine
What Lays wants us to know about Darrell McCrum of the Maine Potato Alliance is that:

• The McCrums have farmed potatoes for five generations.
• McCrum has been selling his potatoes to Frito-Lay to be made into Lay’s Potato Chips since 1986.

What Lays doesn’t want us to know about Darrell McCrum is that he not only belongs to the Main Potato Alliance, but also co-owns Country Super Spuds in Mars Hill — the largest potato farm in Maine. His farm owns almost 6,000 acres of potato farmland. Every year, he grows potataoes on over half of that land — 3,500 acres. McCrum’s co-owners include his brother, father, and two uncles.

Country Super Spuds — consists of three subsidiaries:

• Sunday River Farms, which grows the potatoes
• JDR Transport, which takes the potatoes to food processors
• Penobscot McCrum, LLC (formerly Penobscot Frozen Foods, Inc.), a processing company that turns potatoes into frozen potato products such as baked potato skins, potato wedges, flavored stuffed potatoes, and specialty items (such as potato rounds, baked Maine potatoes, and baked Maine potato pancakes)

Country Super Spuds’ takes in somewhere between $35 million to $40 million per year.

In an interview in mainebiz.biz, McCrum, who is Country Super Spuds’ Manager of Northern Maine Farm Operations, said that over the past several years his business has increased between 11-18% per year. One reason for the increase is because McCrum constantly uses new technology to reduce the number of farm workers he hires from an estimated 150 during harvest season to around 60.

Six-Row Harvester

For example, by purchasing two harvesters for $600,000, McCrum replaced all harvest workers except for the two workers needed to run the machines. The harvesters also can harvest 20 rows of potatoes at a time, which decreases the time it takes to harvest the potatoes. And McCrum also bought a potato grader that automatically sorts good potatoes from bad ones. McCrum also uses GPS in his tractors to they can plow straighter rows, which reduces wastage because of sunburned potatoes.

I expect another reason for increased revenues is because the McCrums cut out the middle man by forming JDR Transport in 1992 and by buying Penobscot Frozen Foods, Inc. in 2004 for $1.8 million. The plant is located near the Canadian border.

Both Country Super Spuds and Penobscot Frozen Foods belong to the USPB.

According to the Environmental Working Group’s Farm Subsidy Database, between 2003-2005, Darell McCrum received $702 in pass-through subsidies from U.S. taxpayers for his multi-million dollar business — one of the lowest amounts received by the farmers featured in the “Lay’s Local” ads.

Brian Kirschenmann of Kirschenmann Farms in Bakersfield, California
What Lays wants us to know about Kirschenmann Farms is that:

• Brian Kirschenmann’s family has been growing potatoes for five generations.
• Kirschenmann Farms has been selling its potatoes to Frito-Lay to be made into Lay’s Potato Chips since 1974.

I had a lot of trouble finding additional information about Brian Kirschenmann and Kirschenmann Farms than what the “Lay’s Local” ads provide. But I did find some.

Cropduster Spraying Fields

Kirschenmann Farms is family owned and the Kirschenmanns produce potatoes on 4,500 acres. In 2002, when Western Farm Services sprayed the potato and carrot crops on Kirschenmann Farms, a cloud of pesticide drifted into nearby Arvin, a community of immigrant farm workers, making hundreds of them sick. The state fined Western Farm Service $60,000 for carelessly spraying the fields. Dissatisfied with the settlement, the residents sued.

In late 2005, the parties reached a settlement for $775,000, which was one of the largest settlements ever made. Of that $775,000, Kirschenmann Farms agreed to pay $275,000 and Western Farm Services the rest.

According to the Environmental Working Group’s Farm Subsidy Database, between 1995-2003, Kirschenmann farms received $123,776 in farm subsidies from U.S. taxpayers.

Kirschenmann Farms also belongs to the USPB.

Jack Wallace Sr. and Jack Wallace Jr. of Jack Wallace Farms in Edinburg, Texas
What Lays wants us to know about Jack Wallace Farms is that Jack Wallace father and son have been selling their potatoes to Frito-Lay to be made into Lay’s Potato Chips since 1964.

Information about the Wallaces and Jack Wallace Farms was even more difficult to find that for Kirschenmann Farms.

But I did learn that Jack Wallace Farms, Inc. takes in around $1,200,000 a year and employes around 10 people.

However, I did find some information about J.W. Farms, Ltd., which is located at the same physical address as Jack Wallace Farms, Inc.: 1103 McKee Drive, Edinburg, Texas 78539. This farming company takes in between $1,000,000-$4,999,999 a year and employees between 1-5 people. I assume this farming operation doesn’t grow potatoes, but crops such as cotton, peanuts, and corn.

According to the Environmental Working Group’s Farm Subsidy Database, both Jack C. Wallace and Jack C. Wallace, Jr. of J.W. Farms, Ltd. received farm subsidies from U.S. taxpayers. Between 2003-2005, Jack C. Wallace, Jr. got $355,356 in pass-through subsidies.

J.W. Farms also belongs to the USPB.

Steve Singleton of Singleton Farms in Hastings, Florida
What Lays wants us to know about Singleton Farms is that the family has sold potatoes to Frito-La since 1982.

Steve Singleton farms 800 acres and says that “We grow potatoes in Florida and Lays makes potato chips in Florida. It’s a pretty good fit.”

Other than that, I could find absolutely no information about either him or Singleton Farms. I did find listings for three Singleton and Sons Farms, one of which is in Hastings, Florida. I don’t know if they are separate entities or parts of the same operation run by members of the Singleton family. Your guess is as good as mine.

Conclusion — Are Lay’s Potato Chips Local?

In their “Lay’s Local” marketing campaign, the Frito-Lay marketers created five stories about the “local” farmers who grow the “chip-stock or chipping potatoes” used to make Lay’s Potato Chips. The marketing people think that if we get to know these farmers as people, we’ll get to like them. And if we get to like them, we’ll probably buy more Lay’s Potato Chips.

Frito-Lay Truck Delivering Lay's Potato Chips

But just because an ad campaign tells us a story doesn’t make the story true. The best way to determine whether these farmers are really local is to see how well they follow the four stages of local food production mentioned in Part 2:

• Growing
• Processing
• Distributing
• Consuming

With the three farmers from the last three farms, we don’t have enough information to make hard conclusions. But I think we can extrapolate. After all, if they’re producing potatoes for a huge company like Frito-Lay, their operations must be fairly similar to those of Brian and Gary Walther Farms and of Darrell McCrumb.

Growing
Every farm is “local” if you’re living near it. However, the farms belonging to the farmers in the “Lay’s Local” ad campaign are mostly huge industrial farms. From size to crop rotation to fertilizers and pesticides to machines and heavy equipment to subsidies, they display many of the characteristics that distinguish industrial farming from local farming.

For example, Walther Farms consists of individual farms (which allows the owners to collect farm subsidies) in six states and one foreign country that grow potatoes on 14,000 acres. In 2008, Walther Farms had only 8,000 acres in six states, they produced 400 million pounds — that’s 200,000 tons — of potatoes for Frito-Lay. Those potatoes represented 85% of their entire crop. The remaining 15% they sold to big-box stores, which sold them for cooking.

Country Super Spuds consists of three subsidiaries, one of which is Sunday River Farms — the largest potato farm in Maine. (Personally, I don’t know why the “Lay’s Local” marketers associated Darrell McCrumb with the Maine Potatoe Alliance, unless they hoped we’d have a more “down home” feel from the term.)

Anyhow, Sunday River Farms grows potatoes on 6,000 acres. I don’t know how many of those potatoes they sell to Frito-Lay, but it must be a lot or Frito-Lay wouldn’t be buying from them. Manager of Northern Maine Farm Operations Darrell McCrumb is relying more and more on machines to increase both production and profit — and also to decrease the number of farm workers he uses. To me, decreasing the number of workers decreases the amount of money going back into the local economy. That’s hardly a local value.

McCrum, though, does appear to be leaving around half of his potato land fallow each year.

Kirschenmann Farms grows potatoes on 4,500 acres and uses pesticides.

Some of these farms take in a million or more dollars a year (and also tax payer farm subsidies) — hardly a small amount of money.

Processing
Frito-Lay does receive chipping potatoes from nearby farmers and makes the potatoes into Lay’s Potato Chips at processing plants in 18 states across the country. So Lay’s Potato Chips are, indeed, made locally.

Distributing
Frito-Lay does appear to distribute its potato chips locally — as you can find out using their Chip Tracker.

Consuming
Perhaps the most important aspect of buying local is that the money you spend buying local products stays in your community. And here is percisely where the “Lay’s Local” claims for being local fall apart. These seven farmers don’t send their chipping potatoes to locally owned processing plants, but to ones owned by Frito-Lay whose corporate headquarters are in Plano, Texas.

Moreover, when the Frito-Lay plant makes the potatoes into Lay’s Potato Chips, the money the grocer pays for them does not remain in the farmers’ communities or even regions, but goes to Frito-Lay corporate headquarters in Plano, Texas.

And when Lay’s Potato Chips are sold, who sells them? Mostly regional and chain stores such as Wal-Mart, Meijers, and Target. True, if the store happens to be locally or regionally owned, the money does stay in that locality or region. But if the store is a multi-state or national chain, the money goes to corporate headquarters.

Just to be fair, I should say that Darrell McCrumb seems to be more local than the other farmers because he does have his own transportation company, which he might or might not use to ship his potatoes to the local Frito-Lay processing plant. He also has his own processing plant, which makes frozen potato foods — not potato chips. Because of his transportation company and his processing company, McCrumb does keep some money within Maine.

So let’s decide: Are the five “Lay’s Local” farmers really local? Yes and no. Yes, because they are members of their communities and — for the multi-farm farmers — at least one of their farms happens to be in or near the community in which they live. No, because the farmers are industrial farmers.

Are Lay’s Potato Chips local? Not really. The potatoes might be grown locally, but they’re not sold locally. An international corporation in Plano, Texas buys them. And even though the processing plants are physically near the farms that produce the potatoes, those plants are owned by Frito-Lay in Plano, Texas. And while local people might work in those plants, the profits made go to Frito-Lay in Plano, Texas. When it comes to selling his potatoes to Frito-Lay, even Darrel McCrumb isn’t local.

“Lay’s Local” is a deceptive marketing campaign that Frito-Lay marketers devised to sell more Lay’s Potato Chips.

In Part 4, I’ll tell you the dirty little secret that Frito-Lay doesn’t want you to know.

See also:

• The Truth about Frito-Lay’s “Lay’s Local” Marketing Campaign — Part 1
• The Truth about Frito-Lay’s “Lay’s Local” Marketing Campaign — Part2
• The Truth about Frito-Lay’s “Lay’s Local Marketing Campaign — Part 4: Frito-Lay’s Dirty Little Secret
• “Lay’s Local” Update — They Just Don’t Seem to Get It

When Lisa and I drove along I-75 in Chattanooga this past weekend, we noticed a Lay’s® billboard on the side of the road that said:

PROUDLY MADE IN TENNESSEE

and Across America

That sign told us that the “Lay’s Local” marketing campaign had come to Tennessee. It also told us that the Lays marketers are taking advantage the many ways in which people define “local.”

What Locally Grown Means

Many people look askance at Lay’s claim to be a local food company. And for good reason. Local food is grown on small farms that grow a variety of crops and produce enough food to

Buying at a Farmers Market

distribute to stores and consumers who live within a short distance of that farm. In fact, all stages of food production — growing, processing, distributing, and consuming — are done within that geographical area. The idea of local consumption of local products is very important because when you buy local, the money you spend goes back into your local economy.

The “Lay’s Local” ad campaign tries to focus on all four stages:

• Growing — Potatoes are grown at “local” farms
• Processing — Lays makes the “locally grown” potatoes into potato chips at Frito-Lay processing plants scattered across the country in 18 states.
• Distributing — If the chips are made locally, they must be distributed locally.
• Consuming — When you buy a bag of Lay’s Potato Chips, the money you spend stays in your community.

Buying locally grown food gives the consumer — you and me — direct control over the quality of the food we buy. For example, if we want organic food and a farmer grows nonorganic food, we won’t buy from that farmer. To gain our business, the farmer will start to grow organic food.

Buying locally grown food also is about relationships. If the farmer sells to a local store, the farmer and the store employees get to know and trust each other. And if the farmer sells directly to us at farmers markets, we and the farmer get to know and trust each other.

The Ambiguity of “Local”

Unfortunately, no one can agree on what the term “local” means. Why? Because the term is ambiguous — for two reasons.

First, there’s no agreement about how close to the you the food must be produced or grown to be considered local. Some distances include:

• 500 miles away
• 100 miles away
• Within the region in which you live
• Within your state
• Within 7 hours’ journey of you or the store (Whole Foods’ definition)
• Within a day’s journey or less of you or the store

Food produced or grown within 100 miles of where you live seems to be the most commonly accepted definition of “local.” At least, that was the conclusion of a survey conducted in 2008 by the Leopold Center for Sustainable Agriculture. Given a choice of several distances, over two-thirds of the people surveyed chose 100 miles.

This 100-mile definition is important. In a lecture reported online in the Iowa State Daily, Andrew Larson, a small farm and sustainable agriculture specialist, said that big companies (such as Frito-Lay) will have a hard time breaking down the perception that local food is grown within a 100-mile-radius of where you live:

Local is the one thing that’s really hard to sort of repeat or co-opt by a larger scale company. If somebody out in California wants to sell local produce, they’re going to have a hard time convincing people in Iowa that California produce is local.

Second, to further complicate matters, some people think that distance has nothing to do with defining “local.” For example, if you live in Chattanooga, Tennessee, and buy food from a farm 20 or 30 miles over the border in Georga, you might consider that food locally grown. But someone else in Chattanooga buying the same food from the same farm might not consider the food local because it comes from another state.

The Lay’s marketers are assuming we’ll uncritically use our own definitions of “local” when we read their ads. By doing that, we’ll buy into their campaign’s message that Lay’s Potato Chips are a local food.

Food with a Story

In his book The Omnivore’s Dilemma, Michael Pollan talks about Industrial Organic farming and what he calls “supermarket pastoral.” What he means by supermarket pastoral is that industrial organic farms do more than just produce or grow organic food. Instead, they grow food with a story. And that story makes us, the consumer, feel good about purchasing that food — even if the story might be distorted or downright false.

For example, the pastoral story of the “free range” chicken whose breast you’re buying might say that it spent its life walking around outside in the sunlight. But the real story could be that it actually spent all of its life cramped in a coop and only shortly before it was slaughtered did it have access to a door leading into a small yard — a door it never went through.

In his lecture, Andrew Larson takes this “supermarket pastoral” concept and applies it to the definition of “local.” What most people are concerned about, he thinks, is not the distance traveled by the food they eat, but

the story behind that particular food. They want to be able to see the farmer’s face who produced it, they want to have been able to visit his farm to see his production method — develop some relationships and trust.

Food with a story is the linchpin of the “Lay’s Local” marketing campaign. The Lay’s marketers know that in this age of impersonal industrial food, we consumers want to develop relations with our “local” farmers so we can feel good about what we’re eating — in this case, Lay’s Potato Chips.

But the Lay’s campaign creates the relationship between us and their “local” potato farmers through deception.

In Part 3, I’ll talk about the deception behind the “Lay’s Local” ad campaign.

See also:

• The Truth about Frito-Lay’s “Lay’s Local” Marketing Campaign — Part 1
• The Truth about Frito-Lay’s “Lay’s Local” Marketing Campaign — Part 3
• The Truth about Frito-Lay’s “Lay’s Local Marketing Campaign — Part 4: Frito-Lay’s Dirty Little Secret
• “Lay’s Local” Update — They Just Don’t Seem to Get It

If you’ve driven through Michigan lately, you might have noticed a billboard along the side of the road that displays an unusual ad for Lay’s® Potato Chips that says, “Proudly Supporting Local Michigan Farmers.”

Lay's Billboard Ad -- Photo Courtesy of Rick McOmber

The message seems a contradiction in terms. Frito-Lay North America, which is the snack food unit of PepsiCo, brings in $12-billion in sales and buys much of its raw materials from industrial farms. Yet Lay’s Potato Chips is trying to convince consumers — that is, you and me — that it is actually part of the local food movement with its new “Lay’s Local” marketing campaign.

The “Lay’s Local” campaign is the second phase in Lay’s strategy to reposition its Lay’s Potato Chips brand of snack food. Lay’s launched the first phase, called “Happiness is Simple,” in early 2009. “Happiness is Simple” focused on people’s nostalgia for the simpler times that seemed to have existed before today’s complex economic problems developed. The campaign sought to make a connection between this nostalgia and Lay’s Potato Chips’ “place in Americana” and the potato chips’ “role in bringing people together for life’s simpler pleasures.”

Today people are not just interested in simpler times, but in eating food that is locally grown. As a result, the local food movement has become stronger and stronger. The marketing people at Frito-Lay aren’t slouches. They’ve seen how this movement is spreading and want their snack food to become part of it. As a result, they’ve devised a marketing campaign that appeals to our increasing desire to buy and eat foods that are locally grown.

Lay’s Marketing Campaign

On May 12, 2009, Lay’s announced the second phase in its repositioning strategy, the “Lay’s Local” marketing campaign, to persuade us that the potatoes used in Lay’s Potato Chips are locally grown and that the chips themselves are locally made. By connecting its potato chips to local communities, Lays hopes to make us think that the Lay’s Potato Chips brand of snack food is “closer to home than people might expect.” Lay’s also wants us to believe that when we buy a bag of Lay’s Potato Chips, we are investing in our local communities.

To add weight to it’s marketing pitch, the campaign emphasizes that Lay’s receives its potatoes from over 80 farms in 27 states. In 2008, these farmers grew over over 2.8 billion pounds of potatoes for Lay’s. In addition, the campaign stresses that Lay’s makes its chips at Frito-Lay plants in 18 states throughout the country, from East Coast to West Coast.

Lay’s also is trying to show its connection to local communities by participating in over 50 local-market events such as the Maine Potato Blossom Festival and the Hall of Fame Parade in Canton, Ohio.

The Chip Tracker

Lay's Chip Tracker

Any good marketing campaign tries to encourage its target audience to become actively involved so they’ll buy into the message. To encourage us potato chip eaters to become involved in “Lay’s Local,” Lay’s put a Chip Tracker on its home page. When you enter your

Product Code

ZIP code and the first three digits from the product code on your bag of chips, the Chip Tracker tells you where the chips in the bag were made. “Chances are, it may be closer than you think.”

Unfortunately, the Chip Tracker doesn’t tell you the “local” farms the potatoes that were made into the chips in your bag came from.

Hiring Extra Help

This marketing campaign uses a wide range of advertising: national and regional TV ads, country-wide print ads, messages on the bags of potato chips, and 40,000 in-store displays that are customized for each state.

And Lay’s isn’t just relying on its own marketing people to convey their local food message, either. To help deliver the word, Lay’s is using four high-powered PR and marketing firms:

• For advertising and in-store marketing — Juniper Park, which believes that “positioning doesn’t matter if you haven’t taken a position first”
• For buying media — OMD, which believes “in the power of ideas to deliver compelling business results”
• For events — The Marketing Arm, which “builds brands by engaging consumers through emotionally-powerful platforms”
• For public relations — Ketchum, which “specializes in corporate and product positioning”

Obviously, this is an expensive campaign. In fact it’s the largest one that Lay’s has ever conducted. When asked how much the campaign cost, though, Dave Skena — who is Frito-Lay’s vice president of marketing — refused to say how much money had been budgeted for the campaign.

Local Farmers from Local Farms

The campaign, which started on May 18, features farmers from five “local” farms that supply Lay’s with potatoes for making chips:

• Brian and Gary Walther of Walther Farms in Three Rivers, Michigan
• Brian Kirschenmann of Kirschenmann Farms in Bakersfield, California
• Darrell McCrum of the Maine Potato Alliance in Mars Hill, Maine
• Jack Wallace, Sr. and Jack Wallace, Jr. of Jack Wallace Farms in Edinburg, Texas
• Steve Singleton of Singleton Farms in Hastings, Florida

The actual kick-off for the campaign began on May 12, when the farmers went to the New York Stock Exchange and rang the opening bell. Gee, how many local farmers have the financial or political clout to do that?

In Part 2, I’ll talk about what it means to buy local and how the “Lay’s Local” marketing campaign takes advantage of the ambiguity of that concept.

See also:

• The Truth about Frito-Lay’s “Lay’s Local” Marketing Campaign — Part2
• The Truth about Frito-Lay’s “Lay’s Local” Marketing Campaign — Part 3
• The Truth about Frito-Lay’s “Lay’s Local Marketing Campaign — Part 4: Frito-Lay’s Dirty Little Secret
• “Lay’s Local” Update — They Just Don’t Seem to Get It