Marc Gunther

The Small Mart Revolution

My CNN Money column this week was prompted by Michael Shuman's new book, The Small-Mart Revolution, which is about small companies that are joining forces to challenge big business, with the help of consumers, community groups and national nonprofits like BALLE. I thoroughly enjoyed the book. Shuman is a smart guy whose politics can't be pigeonholed. He has worked in the trenches, helping to promote local community development in Maine and western New York.

I'd love to visit Bellingham, Washington, where a local network called Sustainable Connections is thriving. Here's picture of their Harvest Dinner, where hundreds of townspeople get together to enjoy all-local, fresh food. (Click on it and you'll see everyone eating apples!) Food and energy are two industries that could be dramatically "localized," Shuman says.

Nevertheless, I'm not persuaded by Shuman's argument that small businesses are always, or almost always, better for the world than chain stores or big companies. I am, for example, writing this post from a Starbucks in Washington, D.C. Good coffee, good Internet connection, good employer, good practices in buying coffee beans from the global south.

Of course, I couldn't agree more with Shuman's broader point--that we should use our power as consumers, workers and investors to change business for the better. You can read the column here.

Is Family Farming the New Bubble?

Most of us have a soft spot in our hearts for the family farm. Whenever I drive past a roadside farm stand, I'm tempted to stop. Lately, I've been buying more fruits and vegetables at farmers' markets, and next year I plan to become part of a CSA--a community-supported agriculture project that links a group of buyers to a local farm.

It turns out that lots of people are buying more local food. As North Carolina farmer and writer Tom Philpott reports in Grist, an online environmental magazine, the number of farmers' markets has grown by 79% in the last eight years. Community supported agriculture is also booming.

Supermarkets are taking notice. My local Whole Foods now showcases corn and peaches from Maryland and Virginia farms. Even Wal-Mart is talking about reducing "food-miles"--it makes no sense for a supercenter in Ohio to buy peaches from Georgia, when lots of great peaches are locally grown. As Philpott writes, "the phrase 'local is the new organic' has become commonplace."

That's the good news. The bad news is that small farms are losing money, despite the growth of farmers markets and CSAs. Philpott writes:

Aside from the dot-com bubble of the 1990s, I can think of no great boom in American history built more on enthusiasm, and less on profit.

You can read the rest of his column here. Grist, by the way, is a fun read--not something you hear often about environmental websites.

How Wal-Mart alleviates global poverty

All good companies serve various constituencies--customers, workers, shareholders and communities--and the best manage to serve them all, balancing their competing needs. Sometimes you have to charge your customers more to give your workers a raise, for example. At Wal-Mart, as I've written, things got out of whack: The company became so focused on delivering cheap goods to customers that it inevitably squeezed its workers, its communities and its suppliers. This helped spark the well-financed and effective anti-Wal-Mart movement that we're seeing today. Inside Wal-Mart, I believe, senior executives are asking themselves whether the company's narrow, near-maniacal focus on everyday low prices is a winning strategy for the 21st century. I'd bet the company is going to change for the better in the years ahead.

Amidst all the debate about Wal-Mart, though, the company's role as the U.S. biggest importer of goods from China has not received much serious attention. Sure, some people have taken cheap shots at Wal-Mart for buying from China, particularly because many remember founder Sam Walton's flag-waving "Made in America" campaign in the late 1980s. But there's a counterargument that is worth listening to--that Wal-Mart has helped create opportunity for millions of the world's poorest people by buying so many goods from in China. As Michael Strong, who is co-founder of a pro-business, libertarian-oriented NGO called FLOW, writes of Wal-Mart:

It is unlikely that there is any single organization on the planet that alleviates poverty so effectively for so many people.

I disagree with some of what Strong has to say. He is, for example, too quick to dismiss the work being done by social enterpreneurs and microlenders in the developing world; they are doing more than alleviating poverty, they are creating enterpreneurs and improving the status of women in the global south. What's more, most people who know anything about factory conditions in China tell me that Wal-Mart has not done nearly enough to monitor its suppliers there; companies like Gap, Nike and Timberland all do a better job of factory monitoring. Having said that, Strong's argument deserves to be taken seriously by anyone who cares about alleviating global poverty. You can read his article here.

Insuring against global warming?

You'd expect the insurance industry to be leading the way when it comes to doing something about global warming. Insurers, after all, have to foot the bill for weather-related disasters that appear to be growing in intensity as a result of rising earth temperatures. (Yes, I know the science about this remains uncertain and that no single weather-related event can be linked to global warming.) For whatever reason, though, U.S. insurers, unlike their counterparts in Europe, have been slow to wake up to the issue of climate change. Now there are some signs that the industry is taking the issue seriously--as I wrote this morning in my weekly CNN Money column:

NEW YORK (Fortune) -- Throughout their history, insurance companies have done more than collect premiums and pay claims. They've made the world a safer place - by promoting fire prevention, lobbying for building codes, testing the crash-worthiness of cars and rating vehicles for safety.

Now some insurers are worried by the threat to their business posed by climate change. And they are starting to see what, if anything, they can do about it.

Read more.

Good food

I've eaten in a number of fine restaurants and some good hotels this summer, but the best meals I had came from elsewhere. While reporting on Wal-Mart and sustainable fishing in Alaska, I enjoyed a sockeye salmon that had been caught a few hours earlier and grilled by the crew of a fishing boat in Kodiak Bay. During a weekend of hiking in Vermont, my daughter, Sarah, and I stopped at a farmer's market and bought some freshly-made goat cheese, fresh-baked bread and a just picked local tomato that made up a fabulous lunch, eaten atop Bromley Mountain. And last week, a friend gave me his weekly share of the produce of a local farmer--tomatoes, onions, cucumbers, basil, yellow squash and some other vegetables--that became a pasta and vegetable dinner. What all these meals had in common, besides the fact that they were fresh and delicious, was their transparency--it was easy to connect dinner to the farm, or the fishing boat.

These meals came to mind because I've just finished The Omivore's Dilemma: A Natural History of Four Meals by Michael Pollan. It's one of the most eye-opening, thought-provoking books that I've read in years. Pollan begins with a simple question: What should we have for dinner? He explores the possibilities in more than 400 immensely satisfying pages. One of the many keen observations in the book is this--mass industrial agriculture, among its other problems, leaves us profoundly disconnected from the people and places that produce our food. (Often for good reason, as Pollan's visits to a corn farm and cattle ranch reveal.) "In the industrial food economy," he writes, "virtually the only information that travels along the food chain linking producer and consumer is price." Read this book--you won't regret it. I hope to return to the topic of good food in this blog, and in my writing at CNNMoney.

Your Car, Corn and Wal-Mart

My column for CNN Money this week explained why Wal-Mart may sell ethanol, an alternative to gasoline made from corn, sugar cane and, potentially, biowaste. More than 500,000 people read it--making it my most read column of the year. Here's how it began:

NEW YORK (Fortune) -- More than 5 million vehicles on U.S. roads today can run on ethanol - a renewable fuel that comes from corn - as well as gasoline. General Motors, Ford, and DaimlerChrysler recently announced plans to double their annual production of so-called flex fuel vehicles to two million cars and trucks by 2010.

It's the single largest commitment to renewable fuels in the history of the auto industry - a good move for the automakers, and for the planet, too.

That's because running cars and trucks on E85, a blend of 85 percent ethanol and 15 percent gasoline, could turn out to be a cost-effective way to reduce the carbon emissions that cause global warming and curb our dependence on imported oil.

There's just one big problem.

Only about 800 service stations in the United States, out of a total of 168,000, pump E85. There's not a single E85 pump, for example, in all of New England.

You won't be surprised to learn that the big oil companies are not, as a rule, interested in selling E85.

But Wal-Mart is. The giant retailer is considering selling ethanol at the eight stations that it operates at Wal-Mart Stores and at about 380 more that it runs as part of its Sam's Clubs division.

Read more..

By the way, here's a link to The Green Machine, my story about how and why Wal-Mart embraced sustainability, which ran on the cover of the August 7 issue of Fortune. I wanted the headline to say The Green Monster but that didn't fit with the green smiley face the magazine used to illustrate the story.

This blog

Welcome to my blog. I write about the social, environmental and political impact of business for FORTUNE magazine and its home on the Internet, CNN Money.com. This blog will collect my writings for the magazine and the web site, as well as other, occasional ideas about business. I'm hoping that the blog expands my audience. You can subscribe to my postings if you like.

Several years ago, I wrote a book called Faith and Fortune: How Compassionate Capitalism Is Transforming American Business. It's about companies that do well by doing good, including Southwest Airlines, UPS, Timberland, Herman Miller, Hewlett Packard, Starbucks and Tom's of Maine. The book also explored the relationship between spirituality and business; essentially, I think the best businesses are guided by the golden rule. As you can probably tell, I'm an optimist. I believe business is changing for the better--and will continue to do so.

In his book, The World is Flat, Tom Friedman (who I've never met) was kind enough to write: "Marc Gunther, a senior writer for Fortune magazine and the author of Faith and Fortune, is one of the few business writers who have recognized how global corporations can be influenced by progressive politics."

Put another way, I believe that business and markets--when pushed in the right direction by activist groups, workers, consumers and socially-conscious investors--can help us solve the world's biggest problems.