Kodachrome, marketing nostalgia.

Today, the last roll of Kodachrome film was developed into slides in Parsons, Kansas, at Dwayne’s Photo, the last store in the world to process the film.  This story brings to mind the Season One Finale of Mad Men, the famous Carousel scene, when Don Draper speaks about how “technology is a glittering lure, but there is the rare occasion when the public can be engaged on a level beyond flash, if they have a sentimental bond with the product… a deeper bond: nostalgia; it’s delicate, but potent… In Greek nostalgia means the pain from an old wound.  It’s a twinge in your heart far more powerful than memory alone.”  He then goes on to show images of his family taken with Kodachrome film.

In the months leading up to today, people flocked from all over the world to Dwayne’s Photo in Parsons, Kansas to get their film developed.  This is the reverse of a story like the release of the iPad, or a new iPhone, because Kodachrome is nostalgia personified.  Unlike the new smartphones, which will be outdated in a few years, Kodachrome managed to stick around for 75 years.  Paul Simon wrote an unforgettable song about it.  The nostalgia which Don Draper talks about is indeed potent.  In fact, nostalgia is under-appreciated when it comes to marketing sustainability.  While technology increases in leaps and bounds, it can overwhelm us; the simplicity which will be necessary to shift towards sustainability is channeled through nostalgia.  Nostalgia is the long letters we used to write, the joy we used to find in our communities, and the pleasure of making things for ourselves.  Nostalgia is the emotional key to our collective hearts.  The folks who flocked to Parsons, Kansas certainly felt it.


Snowbound

A foot of snow covers my backyard.

In the wake of Christmas weekend, I still have two weeks to go before classes resume in the second year of my MBA program.  My wife and I traditionally throw a big celebration on Boxing Day, and this year our party was cancelled at the last minute due to the big Nor’easterner.  As a result, I have a ton of excellent Butternut Squash soup in the freezer.

In the weeks ahead, I have more books that I plan to complete and review, including 13 Bankers and Driven West (the new book by my former journalism prof A. J. Langguth).  However, I have some exciting news: one of my blog posts is now entered in the Triple Pundit Year In Review Sustainable Business Writing Contest.  Voting will take place in January, please support me with your votes!


A Review of The Weather of the Future

Heidi Cullen, author of the new book The Weather of the Future: Heat Waves, Extreme Storms, and Other Scenes from a Climate-Changed Planet, has a background rare for any research scientist, let alone a climate scientist: she worked for The Weather Channel, and gained a lot of expertise in communicating complex climate science to the lay person.  This work has given Cullen a unique understanding of where misunderstandings of climate science exist:

“This is the only way a lot of people can truly connect to the issue of climate science – via a long-term investment like real estate.  The more I thought about this question, the more I realized the scientific community had failed to communicate the threat of climate change in a way that made it real for people right now.  We, as scientists, hadn’t given people the proper tools to see that the impacts of climate change are visible right now and that they go far beyond melting ice caps.”

Cullen’s new book aims to provide those tools.  She explains some of the big reasons (single-action bias and the ‘finite pool of worry’) why many Americans understand the dangers of climate change, but not urgently enough to change our behavior.  More importantly, she explicitly separates the concepts of ‘climate’ and ‘weather’ and shows how the former shapes the latter.  Cullen’s writing reminds me of Michael Lewis’ The Big Short, when she shows how climate science developed and where it stands today: she eloquently and economically conveys the complex science in a way that is pleasurable to read.   The groundbreaking part of Cullen’s book what comes next: she picks seven of the most at-risk locations around the world, explains how climate change is already impacting the weather, and uses state-of-the-art models to create climate projections for each of these places into the next half-century.  Two of the locations really hit home for me: Cullen examines the Central Valley in California, as well as New York City.  She also looks at the Sahel region of Africa, the Great Barrier Reef in Australia, the Arctic, Greenland, and Bangladesh.

Cullen borrows a metaphor from Paul Saffo, a technology forecaster who was among the first in Silicon Valley to take Y2K seriously: “Imagine you’ve got a sailboat and you’ve got to sail around an island.  You can start to circle when you’re a mile from shore and it will be easy.  But if you wait until you’re only 100 meters away, there will be rocks and reefs.  There will be a lot more drama.”  In her analysis of these climate hot spots around the world, Cullen makes clear the economic impact of waiting until the proverbial sailboat is close to the rocks and reefs.

The Weather of the Future lays bare the unequivocal nature of climate change, and the need to take actions, what Cullen calls “a million boring little fixes.”  In time, we will all make these fixes; the question for policy makers, skeptics, and citizens in general is, are we going to wait until those fixes become all the more expensive and painful?  This book is timely and necessary.


Review of Earthscan Reader in Sustainable Consumption

There is much debate about what exactly it would mean for humans to “consume” sustainably.   Tim Jackson confronts that question in the excellent new Earthscan Reader in Sustainable Consumption, which he edited.  The essays are divided into four parts: Framing Sustainable Consumption, Resisting Consumerism, Resisting Simplicity, and Reframing Sustainable Consumption.  That last part is key to solving the big problem facing policymakers and activists: finding consensus about what exactly sustainable consumption would be in a world of inequality, and how to best achieve the behavior change necessary to limit resource throughput, lower energy consumption, and reduce greenhouse gas emissions globally.  There are plenty of good intentions, but little progress.  In fact, the efforts to date may provide a false sense of accomplishment.

Take energy efficiency, for example.  Elizabeth Shove examines consumption in the United Kingdom in her essay “Efficiency and Consumption: Technology and Practice.”  She finds that despite a national program to encourage energy efficiency, consumers actually increased their consumption by raising their thermometer, and increasing the use of appliances like dishwashers, freezers, and washing machines, even after new efficient models are installed.  In fact, she identified consumers that consciously increased their consumption as an intentional use of the gained energy efficiency.  This conundrum is pertinent because the public case for sustainably is primarily framed around efficiency: the consumer can still have it all, but lose that guilty conscience!  However, efficiency will not take us to the top of Mt. Sustainability, to borrow a metaphor from Interface Inc.’s Ray Anderson.

One big problem may come from the frame ‘consumer.’  In a country whose former President responded to an unimaginable terrorist strike by encouraging Americans to go shopping, we are taught that the consumer has sovereignty, that we can each buy whatever we need, and the free market will meet those needs.  In sustainability circles, the same frame is adopted: we ‘vote with our wallets,’ we support the businesses that make the more sustainable product.  That type of effort certainly helps; companies like Seventh Generation have penetrated markets dominated by the conglomerates, and have reduced the toxic chemicals in our homes.  However, the ‘consumer’ cannot consume his or her way out of the problems we face in the world.  How can we start?  We might want to stop calling ourselves consumers.  Instead of defining humans as consumers, what about stewards?  Stewardship is central to the behavior we need to encourage.

Merriam Webster defines stewardship as “the careful and responsible management of something entrusted to one’s care.”  Boy Scouts are taught to leave the campground cleaner when they leave than when they arrive; one problem is that people don’t necessarily appreciate their impact on Earth, and don’t feel a responsibility to leave it in a better condition for future generations.  The Iroquois Nation had a Law that encouraged its people to think about their actions and the impact they would have on the Seventh Generation.  Today we lack that kind of mentality, and think only about immediate gratification.  The gratification becomes more immediate through advances in technology, but also seems to pass quicker as a result.  To successfully frame sustainable consumption, and thereby change behavior, a frame like the Iroquois’ seventh generation is a start.  On top of that, finding a way for stewards to become aware of what they consume, and the impact that consumption has on resources, is paramount.  Most people don’t know how many gallons of water and fossil fuels go into a Big Mac; most people don’t even realize that potable water is a scarce resource.  Making that resource intensity transparent for stewards is a good place to start.  In the end, Mt. Sustainability is a steep climb, and the fall from its icy slopes is perilous.  Finding a more effective way of inspiring people to take the long view is the challenge of the moment.

 


With the end of DADT, integrity restored to Military

Today the Senate voted, 63-33, to end the controversial “Don’t Ask, Don’t Tell” policy.  I served as a Naval Officer for eleven years, and saw firsthand the impact of DADT on men and women who pledged to serve, and potentially give their life, for their country, and yet were forced to lie about who they were.  One of the most important values of the U.S. Military is integrity; DADT was the antithesis of integrity as a policy.  All we heard from Republicans like John McCain in days leading up to the vote was how they threatened to withhold support of the New Start Treaty with Russia, even in the face of overwhelming support for ending DADT.  This is yet another victory for the President, a historic accomplishment akin to the end of segregation in the military.


With tax bill, Congress restores biodiesel tax credit

In October, I toured Newport Biodiesel, and spoke with its founder, Nat Harris.  Newport Biodiesel is a remarkable local business that takes Waste Vegetable Oil from restaurants across Rhode Island and converts it to ASTM certified Biodiesel, which then heats homes and powers automobiles across New England.  When we met, Nat talked about some of the difficulties many in the biodiesel industry faced when the $1/gallon biodiesel Federal Tax Credit expired in January 2010.  However, Nat Harris and the rest of the nacent biodiesel industry are undoubtedly celebrating the retroactive extension of the tax credit through 2011, which will become official when the President signs the tax bill.

Why is biodiesel important?  I wrote about it here in detail, but for a quick primer, biodiesel emits fewer pollutants when it is burned; because it is created from waste products and plant matter, it has less than 50% of the life cycle carbon emissions than petroluem-based fuels.  This is not ethanol, it is an Advanced Biofuel that can be blended with petro-fuel to work year ’round.  More importantly, this is a domestic industry that takes material out of the waste stream and resuses it.  Biodiesel is sustainability.  And for President Obama, it is another victory in a Lame Duck session that is surprisingly bountiful.  The Senate may even have enough votes to repeal “Don’t Ask, Don’t Tell” this weekend.


A Purple Cow in Rhode Island

This weekend, while visiting the Wintertime Farmers’ Market in Pawtucket, RI, I stopped by the booth of New Harvest Coffee Roasters, a local roaster of whom I am a loyal customer.  I typically pick up their packages of Whole Bean coffee when I shop at Whole Foods, but often I will savor a cup of their Pour-Over coffee while I idle around the Farmers’ Market.   On Saturday, I approached the booth, and asked the barista for a cup of Kenya AA Gaturine Estate, a coffee I had not seen previously at Whole Foods.  The barista carefully prepared my cup, then handed it to me.  To quote Agent Dale Cooper in the seminal television program Twin Peaks, it was a damn fine cup of coffee.  I asked the barista why I never saw this coffee at Whole Foods.  He told me that Whole Foods is very careful about what types of coffee they want.   A post card explained:

SOURCE DIRECT: How to connect coffee consumers with coffee growers

A DIFFERENT WAY

Source Direct is an alternative to Fair Trade.  As artisan roasters, we need to connect with small producers to develop the highest quality coffee.  This is difficult under the Fair Trade model, which is based on very large cooperatives that produce huge mixed-lots of coffee.  It treats coffee as a commodity.  We consider coffee to be an artisan food, and Source Direct is a way for us to achieve new levels of quality with our farmer producers.

THE MODEL

Source Direct is not a certification.  It is commitment to do what it takes to create real collaboration between New Harvest and small coffee farms.  The most important element is communication: farmers need to know what we want and we need to know what their challenges are in meeting our needs.  Usually it means visiting the farms at least once a year, checking up on the picking and processing practices, tasting coffee with growers and comparing notes.  Sometimes it involves purchasing a crop months before we receive it.  Occasionally, or barista trainer will find himself training 30 Costa Rica farmers at a Tarrazu wet-mill.

At Whole Foods, New Harvest sells 4-5 varieties of coffee that are all Shade Grown, Fair Trade, and USDA Organic certified.  Yet, at the farmers market, New Harvest was promoting a variety of coffee with none of those certifications, but instead under a new program where the company pledges only to “do what it takes.”   New Harvest’s Source Direct program, a brand new initiative from the local company, represents a potential paradigm shift away from Fair Trade.  The example of these two types of coffee, sold through two different distribution channels, speak to the complexity associated with the Fair Trade label as it continues to grow in volume; estimated worldwide sales of Fair Trade products increased 187% between 2004 and 2007.

Valery Bezencon, a management consultant and Peruvian business professor, in his thesis The Fair Trade Journey: Conciliating Romance and Strategy, examines the Fair Trade market as a whole, specifically comparing the growing mainstream distribution growth with traditional alternative distribution, and identifies the different motivations of customers who purchase Fair Trade products.  Bezencon’s analysis provides context for the New Harvest Source Direct program, as well as prescriptions for marketers and managers of Fair Trade products.

Fair Trade’s continued growth and relevance hinges partially upon the manner with which it is marketed to consumers.  The Fair Trade label that consumers see on products serves as an instrument to provide information to consumers, and to convey the underlying values of the company that sells the product.  Fair Trade products are not competitive on price with non-Fair Trade products, so the Fair Trade products must provide an added value.

Consumers approach Fair Trade products for different reasons, but for Benzecon, it all comes down to the level of “involvement,” or motivation, to seek out Fair Trade products; that involvement can originate from the product itself or from the Fair Trade certification.  Benzecon coins a term to describe the latter consumer involvement: Fair Trade adhesion, the extent to which consumers buy Fair Trade products because of their underlying Fair Trade principles.   According to Benzecon, increasing the Fair trade adhesion will result in greater sales of Fair Trade products.  However, New Harvest Coffee, a local roaster popular with foodies who appreciate both Fair Trade and good local food, is marketing a new product that runs in direct opposition to Fair Trade.  Why would they do that?

New Harvest took the initiative to communicate about its new product, directly to its most ardent consumers.  In one sense, Source Direct is, in the frame of Seth Godin, a Purple Cow.  However, New Harvest makes an important claim about the Source Direct coffee: it tastes better.  According to New Harvest’s marketing material, Fair Trade coffee is a commodity sold in mixed lots.  For a company that continues to sell many pounds of that Fair Trade coffee, that is a bold strategy.  According to Benzecon, the folks at New Harvest may be onto something:

Hedonic value is a weak predictor of Fair Trade decision involvement.  This means that taste is hardly an argument to prefer Fair Trade over conventional coffee.  Indeed, Fair Trade products do not at present differentiate themselves with better quality or taste.” (Benzecon 86)

According to Benzecon, the biggest indicators of commitment to Fair Trade products are Fair Trade adhesion, concentrating on empowering small farmers and improving their working conditions.

New Harvest emphasizes in its marketing material that Source Direct “is commitment to do what it takes to create real collaboration between New Harvest and small coffee farms.  The most important element is communication: farmers need to know what we want and we need to know what their challenges are in meeting our needs.” New Harvest is taking the most important aspects of Fair Trade that appeal to consumers, and repackaging them around their own Purple Cow: finer tasting coffee.  In fact, New Harvest seems to be reading right out of Benzecon’s playbook.  He recommends that the communication strategy for a company to increase Fair Trade’s revenues “should be focused on the dimensions that exacerbate a differentiated identity in order to nourish consumers with additional signification related to Fair Trade values, adding competitiveness to the products.” (Benzecon 89)

Despite New Harvest’s Purple Cow, Fair Trade products are growing in availability.  It used to be that consumers could only find Fair Trade products at specialty shops, and at grocery stores like Whole Foods.  Now, most big grocery chains have organic sections with a wide variety of products; even Wal-Mart sells Fair Trade products.  How can Fair Trade avoid becoming a meaningless, ubiquitous seal, whose standards of excellence are swallowed under the pressure of greater market share and revenue?

Most companies just throw the Fair Trade label on their product and leave it to consumers to judge.  An artisan coffee producer like New Harvest has the luxury of communicating more directly with its customers than a global behemoth like Starbucks does.   Benzecon has a strategic recommendation for any company that wants to increase sales of their Fair Trade products: know the market, including its consumer segments, and communicate directly to those niches.   Benzecon surveyed 433 consumers of Fair Trade coffee in Switzerland, and discovered some important insights.  He found that younger and less educated consumers buy Fair Trade products for different reasons than older and more highly educated consumers.  For example, the taste of Fair Trade coffee is very important to less educated consumers.  The Fair Trade market is much more complex than previously understood, and communicating with it effectively and efficiently will require more than a simple seal – it will require tailored communication.

However, despite their foray outside the Fair Trade universe, New Harvest is a model for communicating with its customers.  New Harvest baristas treat their coffee like fine wine, and empower their customers with knowledge. When New Harvest says they are committed to doing “what it takes” for their partner farms, their customers believe it.  The Starbucks of the world can learn a lot from New Harvest.

 


Stimulus II the “swindle of the year”; Biogas powers Kristianstad, Sweden

Check out this excellent column by Charles Krauthammer of the Washington Post, on how the President swindled the Republicans:

“If Obama had asked for a second stimulus directly, he would have been laughed out of town. Stimulus I was so reviled that the Democrats banished the word from their lexicon throughout the 2010 campaign. And yet, despite a very weak post-election hand, Obama got the Republicans to offer to increase spending and cut taxes by $990 billion over two years. Two-thirds of that is above and beyond extension of the Bush tax cuts but includes such urgent national necessities as windmill subsidies. No mean achievement. After all, these are the same Republicans who spent 2010 running on limited government and reducing debt. And this budget busting occurs less than a week after the president’s deficit commission had supposedly signaled a new national consensus of austerity and frugality. Some Republicans are crowing that Stimulus II is the Republican way – mostly tax cuts – rather than the Democrats’ spending orgy of Stimulus I. That’s consolation? This just means that Republicans are two years too late. Stimulus II will still blow another near-$1 trillion hole in the budget.  At great cost that will have to be paid after this newest free lunch, the package will add as much as 1 percent to GDP and lower the unemployment rate by about 1.5 percentage points. That could easily be the difference between victory and defeat in 2012. Obama is no fool. While getting Republicans to boost his own reelection chances, he gets them to make a mockery of their newfound, second-chance, post-Bush, Tea-Party, this-time-we’re-serious persona of debt-averse fiscal responsibility. And he gets all this in return for what? For a mere two-year postponement of a mere 4.6-point increase in marginal tax rates for upper incomes. And an estate tax rate of 35 percent – it jumps insanely from zero to 55 percent on Jan. 1 – that is somewhat lower than what the Democrats wanted.”

I can’t believe that Rhode Island Democrats are still complaining about the extension of tax cuts for the top 2%.  This is an outstanding political achievement on the President’s part, and much needed stimulus.  Krauthammer is right, this stimulus represents the President pulling a rabbit out of a hat.

On another note, check out this biogas plant in Sweden. The town of Kristianstad no longer uses oil, natural gas, or coal to heat its homes or power its cars.  It generates biogas from waste agricultural products and other waste, including potato peels, manure, used cooking oil, stale cookies and pig intestines.  Fantastic!  In the United States, we have only 151 biomass digesters.  Most of our waste just ends up in landfills, where often the methane is not even tapped.

 


Network vs. cluster politicians

President Barack Obama and Senator Ted Kennedy...

Image via Wikipedia

David Brooks writes today about the criticism that President Obama has received this week, from Paul Krugman and countless others, over the tax compromise that he made with the GOP.  Brooks defines the President as a ‘Network’ liberal, and his liberal critics as ‘Cluster’ liberals:

“Cluster liberals (like cluster conservatives) view politics as a battle between implacable opponents. As a result, they believe victory is achieved through maximum unity. Psychologically, they tend to value loyalty and solidarity. They tend to angle toward situations in which philosophical lines are clearly drawn and partisan might can be bluntly applied. Network liberals share the same goals and emerge from the same movement. But they tend to believe — the nation being as diverse as it is and the Constitution saying what it does — that politics is a complex jockeying of ideas and interests. They believe progress is achieved by leaders savvy enough to build coalitions. Psychologically, network liberals are comfortable with weak ties; they are comfortable building relationships with people they disagree with. This contrast is not between lefties and moderates. It’s a contrast between different theories of how politics is done. Ted Kennedy was a network liberal, willing to stray from his preferences in negotiation with George W. Bush or John McCain. Most House Democrats, by contrast, are cluster liberals. They come from safe seats, have a poor feel for the wider electorate and work in an institution where politics is a war of all against all.”

Brooks is trapped in the fuzzy center, with the vanishing moderates.  His analysis of the political climate today is crystal clear, and he is exactly right, the President did achieve a victory with this tax compromise.  The problem with politicians that give no quarter is that the major problems we face demand compromise and cooperation.  The President wants to tackle comprehensive tax reform in the Spring; progress on that difficult issue will be hindered by cluster politicians.  The main reasons I originally became a supporter of the President, after his 2004 Convention speech, were that I saw a Great Communicator in the mold of Reagan, and a network politician willing to work across the aisle.  This is the perfect opportunity for the President to play to his strengths.

With the 2012 election approaching, Paul Krugman is right about one thing: many Republicans will be working to sabotage the President because they think that will deliver the White House to the GOP.  The problem with the GOP game plan is that the American people will not stand for two years of stalemate.  GOP opposition to the Health Bill for 9/11 workers is the perfect case in point.


Deepwater Wind doubles down

A wise man once said you always double down when you are dealt eleven in Blackjack. Well, Deepwater Wind is pursuing economies of scale, and has effectively doubled down, increasing its proposed wind park from 100 to 200 turbines, lowering the cost of wind generated to 16 cents/kw.  I detailed the long and complicated process of this development, herehere, and here; this study details the great potential of Atlantic offshore wind.  Suffice it to say, this expansion bodes well for the approval and completion of the large-scale wind farm.  Save the Bay’s Jonathan Stone, director of the largest and most prestigious environmental group in Rhode Island, supports the move.  Rhode Island taxpayers will like the lower rates.  This is a win-win.