Zingerman’s co-founder Paul Saginaw on the importance of robust local business ecosystems, the upcoming BALLE conference in Grand Rapids, and the meaning of “real prosperity”

For the first time ever, the Business Alliance for Local Living Economies (BALLE) will be holding its national, annual conference for independently owned, socially responsible businesses, here, in Michigan. The meeting, which is being called Real Prosperity Starts Here, is scheduled to take place in Grand Rapids this May, and, as of right now, I’m happy to say, it looks as though I’m going to be able to attend, as a member of the press. In preparation for the big event, which will draw visionary entrepreneurs and local business advocates from across North America, I sent a few questions to BALLE board member, Paul Saginaw, the co-founder of the Ann Arbor culinary juggernaut known as Zingerman’s. Following are his responses.

MARK: First off, can you tell us a little about BALLE, and why it is that you think the work of the organization is so important at this point in American history?

PAUL: BALLE is the only national business alliance dedicated to connecting local, independent businesses to each other. That means the collective wisdom and knowledge about crowdfunding in Arizona is quickly and easily accessible by their business peers in Detroit, and that cross-pollination is proving to be a massive catalyst in moving the Localist movement to the forefront of policy and mainstream awareness.

MARK: In a few weeks, BALLE is holding its annual conference in Grand Rapids. Why Grand Rapids? Or, if I can put you on the spot… Why not Detroit, which seems like ground zero when it comes to this kind of thing?

PAUL: We have historically partnered to put on the conference with an established local BALLE network such that we can showcase their local living economy impacts up-close and personal. There is wonderful work happening in Detroit right now, which is why we have a post-conference tour of Detroit and a Michigan-specific scholarship fund recruiting Detroit (and other Michigan) leaders to come to the conference to share and to learn. But Local First in Grand Rapids is a national powerhouse network whose work is an example around the country. The collaborative work of the 600 members of Local First has proven that even the forces of recession and industrial decline are no match for the economic power of a thriving community of innovative locally owned businesses. By having the conference in Grand Rapids we’ll all get to experience that — to touch, smell, taste what real prosperity can look like in this former Rust Belt city.

MARK: Nationally speaking, when it comes to matters of local food production, and the evolution of complex, dynamic local business ecosystems, like those championed by BALLE, would you say that Michigan is in front of the curve, leading the way?

PAUL: I really don’t feel qualified to answer this. Maybe Rodger Bowser, one of the Deli’s managing partners, who is very connected with this scene would be a better person to weigh in on this question.

MARK: As I know that you spend a lot of time traveling the country, I’m wondering what areas you feel we have the most to learn from. I hear a lot, for instance, about the Intervale Food Hub in Vermont. What, if anything, can we learn from them? And what other regions can we appropriate ideas from?

PAUL: Regarding Intervale, I’d point here to the “Community Food Enterprise” study from 2 years ago, undertaken by BALLE and the Wallace Center at Winrock International, that profiled Intervale and other local and regional food businesses for what they have to teach other communities. See the Intervale case study online here. Intervale’s work is powerful because it took underutilized land and a dream of a city to meet 10% of its food demand through local production, and it accomplished this by creating and bringing together a whole range of locally owned, community-serving businesses that worked collaboratively to build a local food system specific to the needs and assets of Burlington.

Farmer training and support was one key component of their success, as with another model we profiled, Appalachian Harvest Network, taking former tobacco farmers and training them instead to become organic food growers for local and regional consumption. It’s an unlikely story but it’s been a big success in terms of local food access and rural economic development.

For those interested in food hubs, we’ll have a 2-hour interactive session dedicated to the topic at the BALLE conference in Grand Rapids.

MARK: Speaking of food hubs, how are things going with our local initiative? Is there any positive news to report?

PAUL: Again, talk to Rodger Bowser.

MARK: This may be a bit of an oversimplification, but we know from experience that chain stores, on the whole, are like a cancer. They force locally-owned retailers out of business. They tend to pay people poorly. They siphon money out of the communities the inhabit. And, ultimately, they have no allegiance to these communities in which they exist. They aren’t accountable. And, at the first sign of trouble, they pull up stakes and leave, after having decimated finely-tuned ecosystems that took decades to form. But, they’re efficient as all hell, and they provide goods and services at relatively affordable prices, which is important to today’s cash-strapped and financially insecure American consumer. Given that dynamic, how does one move forward? Clearly, as in the case of Zingerman’s, there’s a certain demographic that’s willing to pay for quality product. They’re going to pay a premium, knowing that the company they’re choosing to do business with, is paying a living wage, treating their people well, and contributing toward the betterment of their community. And that, in and of itself, is a good thing. But how do you broaden that audience? How do you move the line so that would-be Walmart shoppers start going to the local woodworker for their picnic tables, or the local butcher for their hamburger, when, I think it’s safe to say, those folks are never going to be able to compete on price? How do you make people value quality, and the acknowledge the fact that spending more to do business with a neighbor is actually in their best interest?

PAUL: We’ve all felt the very real and personal impact of what it means to be at the mercy of global conglomerations. We’ve seen them pack up and leave, and that has left many out of work for the first time in their lives. The local treasury has been bled, the community’s standard of living has been lowered, and, in some instances, the earth has been scorched. Consider the dollars staying in a community at your local butcher, how that helps pay local taxes, which help local schools, and keeps wages higher so that the people who live and work in your town are also shopping and spending and keeping your local economy humming along – that is real prosperity. It’s certainly an education process, and we’ve got a long ways to go, but the current love-affair with “buy local” is paving the way for us to have the broader conversation. We can then begin to have dialogue and education on what “the true cost of a product” is, in terms of people and planet.

MARK: I’m curious to know what you make of American Express’s well-financed, annual Small Business Saturday campaign. I’m torn. On one hand, I think it’s good that they’re giving national exposure to the importance of locally-owned business, but, on the other, it’s just one damned day. And it kind of feels, at least to me, like the movement is getting co-opted. Are you sensing that the “buy local” movement is at risk of being taken over? I mean we have malls now with signs saying “Buy Local.” How do we keep the waters from getting muddied, and the whole thing becoming meaningless?

PAUL: This is an interesting question. American Express asked for BALLE’s endorsement of the day, and after a lot of discussion with American Express representatives and our community, we decided not to. Certainly, they have reached a very large national audience with their Small Business Saturday campaign, and it does get people talking about small business, if not local and independent ownership. What we think is most important is to help the public connect this one day to the work happening on Main Streets around the country to support independent businesses throughout the year. Several dozen local business networks came together to create the Shift Your Shopping holiday campaign as our movement’s answer — a campaign that represented more than 38,000 businesses across the U.S. and Canada. You can find out more about that campaign here.

MARK: If I could take the opportunity to ask you an Ypsi specific question…. As you and I have discussed before, a great many Zingerman’s employees live in Ypsilanti. (I believe more than half, right?) While I know that there’s some synergy to be had, having all of your various enterprises co-located in Ann Arbor, might it make sense, at some point, to put some portion of your business in Ypsi? I know that it would be difficult to decouple the Bakehouse from Zingerman’s Mail Order, for instance, but I think that it would be awesome if you did your baking here… maybe on Water Street.

PAUL: It would actually be easier and more realistic to move our Mail Order operation to Ypsi, and that is a possibility. I still would really like to have a Zingerman’s presence in Ypsilanti and I believe that it will happen at some point. Although I do worry about being viewed as an unwanted outsider.

MARK: Back to chains, I’m curious what you think about legislation that would restrict their growth in, for instance, downtown areas. Is that something that we might want to consider in Ann Arbor, where, at the rate we’re going, over half of all storefronts will be either a 7 Elevens or a Starbucks by 2020.

PAUL: Many cities have experimented with ways to lift up their locally owned independents and define for themselves what they want their business community to look like. Some of those efforts have been more successful than others. For example, Think Local First DC and Go Local Tacoma (Washington State) are two BALLE networks that have been navigating Walmart coming to town, and Local First Arizona completed several landmark studies that have changed Phoenix procurement policies to support local businesses first. The ongoing research of Michael Shuman, a BALLE Fellow, and Stacy Mitchell, of the Institute for Local Self Reliance, are some of the most helpful resources about what’s been tried and what’s worked. You can find details here.

MARK: What are you most looking forward to at the BALLE conference?

PAUL: Hanging out with Mark Maynard. Having people from around the country coming to a city that Time magazine called “DEAD” and seeing how vibrant it is and also experiencing all the great, positive energy that is Michigan (irrespective of the legislature in Lansing). I always get re-energized with hope when I get to see and hear about all the people who don’t sit around complaining about what is wrong, but instead are imagining and acting on what is possible.

MARK: Is there anything else that I should have asked?

PAUL: What does BALLE mean when it talks about Real Prosperity vs False Prosperity?

False Prosperity
Consolidated, distant ownership
Benefiting only a few
Depleting natural resources
Dependent, volatile
Homogenizing, loss of heritage
Dollars leave the local economy

Real Prosperity
Diverse, local ownership
Improving quality of life for all
Protecting the natural resources we all need
Self-sufficient, resilient
Unique culture, pride of place
Dollars stay in local economy

Those interested in joining me and Paul at the BALLE conference in Grand Rapids, will find registration information here… Also, I’ve just been informed that the Kellogg Foundation has come forward with a generous offer to fund 25 scholarships to the conference. According to the announcement, these scholarships are intended especially for “entrepreneurs and community network leaders from underrepresented communities in the Upper Peninsula, Detroit, Flint, Grand Rapids, and Muskegon, and beyond, including communities of color, low-income communities, and women-led organizations.” (I imagine that Ypsilanti would meet their criteria.) If you’d like to apply, you can find the online application here.

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  1. Edward
    Posted April 23, 2012 at 6:04 am | Permalink

    How active is our Ann Arbor BALLE chapter, Think Local First? Does anyone know how many members they have, or what they’ve been up to? I haven’t heard anything from them in a while.

  2. Thom Elliott
    Posted April 23, 2012 at 6:10 am | Permalink

    The false vs real prosperity chart is fascinating, how do we protect the natural resources “we all need” from capitalism’s demand for indefinate growth? How can Ypsilanti have “diverse, local ownership” when a sizable portion of the populace are working poor, we have apperently the highest property taxes in the state, and much of the real estate is owned by a small group of cronies? What does it mean to be “self sufficent” in a dystopic global capitalism? We have a unique culture already, but how do we engender “pride of place” when apathy reigns utterly amongst the drunken fratboy district? How can we “improve life for all” when we have an anti-social technological totalitarian majority in our state govt that passes any monsterous bill they want?

  3. anonymous
    Posted April 23, 2012 at 8:30 am | Permalink

    It concerns me that Paul would think that Ypsilanti would be less than welcoming of a Zingerman’s outlet. It makes me wonder about the vibe we give off as a community. Do people in Ann Arbor think that we despise them so much that we’d protest a Zingerman’s business here? Maybe Paul is being overly sensitive, but there may be some truth to it. I can’t imagine, however, that people would protest a Zingerman’s warehouse when, just last year we were lobbying for an Aldi. And I think that the success of Beezy’s, which was launched by a Zingerman’s employee, should be encouraging to the company. At any rate, I’d welcome Zingerman’s with open arms if they wanted to put a warehouse in Ypsi. That would mean several dozen more people downtown, eating at our restaurants, and shopping in our stores. It would be an incredible thing, and I hope they look into it.

  4. JC
    Posted April 23, 2012 at 8:44 am | Permalink

    Much of this sounds excellent.

    I take issue, though, w/ the ad’s claiming that “Real Prosperity Starts Here.”

    Real prosperity begins w/ human interaction, not shopping. Prosperus = “doing well.”

  5. Mr. X
    Posted April 23, 2012 at 8:58 am | Permalink

    Good point, JC. And I don’t think that Paul would disagree with you. Like it or not, though, commerce is a huge part of life in this country. And, given the choice, I’d rather spend my money in such a way that it’s more likely to help the individuals in my community. Still, though, your right. We shouldn’t loose sight of the fact that there’s more to human existence than consumption.

  6. K2
    Posted April 23, 2012 at 9:17 am | Permalink

    Great interview. I do have one question, though. Did Paul deflect your question about whether or not Ann Arbor should pass legislation to limit the number of non-locally-owner businesses downtown?

  7. Ingrid Ault
    Posted April 23, 2012 at 12:35 pm | Permalink

    Think Local First currently has 255 business members and a handful of individual members. If you would like to learn more about the work that we do, visit our website at thinklocalfirst.net. We recently completed work on our vision for the future. Upon reading where we hope to be in 5 years will help answer some of the questions posed above. Here is the link for that. http://www.thinklocalfirst.net/aboutus/2016vision/

    Ingrid Ault
    Executive Director, Think Local First

  8. Edward
    Posted April 23, 2012 at 1:30 pm | Permalink

    Thanks, Ingrid. I’ll follow the link.

  9. Posted April 23, 2012 at 2:12 pm | Permalink

    If you talked to Rodger, he might give you the scoop on the work they’re doing at Tilian Farms: http://tiliancenter.wordpress.com/

  10. jean Henry
    Posted April 23, 2012 at 4:02 pm | Permalink

    In response, to JC’s comment about prosperity deriving from relationships, not business– I work with Paul at Zingerman’s and am on the board of Think Local First (I was a founding TLF board member years before I worked for Zingerman’s) I believe BALLE’s and Think Local First Washtenaw County’s message is in fundamental agreement with JC (your commenter; I won;t speak for the other…). The idea is that small businesses are built on face to face relationships. They thrive when those relationships to customers, suppliers, community, staff and local government are transparent, collaborative and supportive. When good relationships are built, the little guys can harness a reverse economy of scale based on trust and mutual benefit. Small business is a remarkable economic engine; it also can build community cohesion and resilience. BALLE is working to awaken us to see the potential of what I call small ‘c’ capitalism— capitalism less removed from it’s impact on people and planet.

    And, re Thom’s great questions re. the problem of a growth model when we need to learn to live within the means of our planet, I believe there is such a thing as sustainable economic growth. I have seen many local independent business people mentor other entrepreneurs. Helping other businesses get a start and succeed where there is a local need or leakage (i.e. displacing the big guys) is the kind of growth we can all live with. Zingerman’s follows this growth model. There are even more aggressively sustainable models out there from some big companies too. Patagonia has embarked on a zero growth plan, wherein all their profitability is gained through increased resource efficiency… meaning their profitability will be derived from 1) using fewer resources to sell, make and ship your product, and 2)selling you fewer products, but ones that last longer, and for the true social/environmental cost of producing it responsibly.

    Lastly, I would just say that if people out there are interested in working towards answers that are hopeful and engaging (and don’t involve cutting themselves off from either the grid or other people) then they should check out BALLE, go to the conference, and/or get involved with TLF. This is bigger than just buy local (but we should do that too!)

  11. Cheryl W
    Posted April 24, 2012 at 12:05 pm | Permalink

    The “push back” Zingermans experienced from Ypsilanti came because the warehouse property they were interested in was the Ypsilanti Freighthouse. I suspect they would be welcome to other facilities available in Ypsilanti, the remainder of the Motorwheel property, for example, or building warehouse and retail on Water Street. I really do not know if they considered other locations.

  12. Posted April 24, 2012 at 8:55 pm | Permalink

    What a cool guy! Great interview :)

  13. Kristin
    Posted April 26, 2012 at 7:28 am | Permalink

    It doesn’t surprise me that Paul experienced trepidation over the welcome Zingerman’s might meet in Ypsi. Zingerman’s is often held up as an annoying symptom of Ann Arbor’s hubris. It’s the city the loves $15 sandwiches, and that is connected to wine drinking, brie eating and art that has become commercialized. Or do we not believe that any more? We’re awfully quick to judge even local businesses on this site, including local wine purveyors, brie sellers and artists who sell things in independantly-owned gift shops.

  14. Anonymous Mike
    Posted April 26, 2012 at 8:15 am | Permalink

    Reading through the comments, Kristin, I don’t see anyone attacking Zingerman’s for hubris. I’m sure such feelings exist, but I’d argue that a majority of people in Ypsilanti appreciate the fact that Paul treats his people well, by industry standards, and offers them opportunities to build their own companies within the Zingerman’s family, should they want to do so. The sandwiches are too expensive for me, but I’d rather have people spending their money at the Zingerman’s Deli, than at Burger King.

  15. Kristin
    Posted April 26, 2012 at 9:46 am | Permalink

    I said Ann Arbor hubris, not Zingerman’s, and there certainly aren’t those comments on this particular post. My thoughts were directed more towards historical themes on the site.

  16. ekspresy
    Posted July 22, 2013 at 6:30 pm | Permalink

    Speaking of robust business ecosystems, does anyone else think that Ann Arbor could use a 6th downtown Starbucks? I was looking at a map yesterday, and there are literally parts of Ann Arbor that would require a person to travel over two blocks to reach one, which may be acceptable in a well air conditioned SUV, but it’s insane to think that people might have to make the trek on foot. I’m a humanitarian, and I worry about that kind of thing.

  17. Posted March 10, 2015 at 6:49 pm | Permalink

    My understanding is that Provincetown has an ordinance much like the one referrenced, but more substantial: No franchises. No corporate owned chains. Its kinda like Kerrytown, by day, except its in the middle of the ocean.

  18. Posted March 11, 2015 at 1:16 am | Permalink

    For Provincetown, I can understand since this is their sales angle. But I bristle when I hear people trying to suggest that Ann Arbor should adopt such a policy. There is no evidence that onerously restricting the types of businesses allowed in the city will attract anyone at all. We have a number of small, small businesses that fail on a monthly basis, not because of competition with Starbucks, but since they can’t generate a sufficient angle with which to attract and maintain a customer base. That said, there businesses that do and succeed like Zingermann’s.

    The truth is that a lot of people come to Ann Arbor and aren’t interested in cafes like Ambrosia. As distasteful as it is to some, they would like to go to Starbucks.

    Additionally, there is also no evidence that tiny businesses treat employers more favorably than chains or franchises. In fact, it is likely the case that they treat their employers even less favorably, given the lack of oversight and accountability to a central authority. In my experience, tiny business are rife with labor abuses, and play on the desperation of their employees, who, for whatever reason, have few other options.

    A relative of mine is paid in cash because on of his employer (who will not be named) doesn’t feel like paying withholding. A former employer of mine intentionally pocketed the withholding he was required to pay on our checks (and subsequently got busted for it). Record stores are notorious for paying under minimum wage and for using a “company store” model, where employees wages are diverted back into the store in the for of product purchased at a discount. Health benefits are non-existent.

    If we are to put our money where our mouths are, we have to lean hard on these businesses. They need to be publicly named and shamed, not excused simply because they are “small” or “cute” or, worse, our friends.

    Friends don’t let friends abuse their employees.

4 Trackbacks

  1. […] founder of the Business Alliance for Living Local Economies (BALLE), Zingerman’s co-founder Paul Saginaw, and author Amy Cortese. They’re all incredible.[Michael Shuman is the author of Local […]

  2. […] and a few of our entrepreneurial friends from Detroit just attended our SAM visioning seminar with Paul Saginaw of Zingerman’s. Soooooo, it’s already happening!JEAN: I don’t think we are interested in […]

  3. […] shows up, should be pretty awesome. We’ll start out by talking with Zingerman’s co-fouder Paul Saginaw, who, if I’m not mistaken, will be our first guest to have been designated a “Champion […]

  4. […] first scheduled guest was Zingerman’s co-fouder Paul Saginaw. In addition to talking about the history of Zingerman’s, the importance of raising the […]

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