Shoppers, retailers go for a new kind of green

East Bay Business Times - by David Goll

As the holiday crowds build this week at the malls and big-box stores, a small but growing number of shoppers are opting out of the typical year-end retail rat race.

They are fueling the success of seasonal festivals selling handmade goods, buy-local campaigns by cities and nonprofit groups and a growing number of Web-based businesses and brick-and-mortar retail stores offering "sustainable" and "fair trade" items produced by artists from around the world.

Fair trade is a market-based model of international trade that promotes the payment of a "fair" price to producers, as well as social and environmental standards in the production of goods, mostly in underdeveloped countries.

"It's growing by leaps and bounds," said Tex Dworkin, manager of the online store operated by Global Exchange, a membership-based international human rights organization in San Francisco that also has three brick-and-mortar retail shops in Berkeley, San Francisco and Portland, Ore. "Especially with the Web site, it's an exciting way to combine education with selling fair trade products, since we can go into a lot of detail online. ... We tend to carry more apparel items in the brick-and-mortar stores, since people like to be able to try things on."

Dworkin is enthusiastic about the public's growing acceptance of "shopping with a conscience," noting that business on the Web site - which sells everything from pottery, calendars, chocolate and bamboo bowls to Tibetan prayer flags and Rwandan peace ornaments created "ethically and in environmentally sustainable fashion" by artisans in 40 countries - increases every month and is on pace to hit $1 million in sales by next year. But she's also realistic about its place in the larger retail sphere.

"This kind of shopping is going mainstream, and for those of us who have been doing this a long time, it's great to see that finally happen," said Dworkin, who previously worked as a buyer for Whole Foods Market Inc. "But right now, we're not really competing for a piece of the pie, but a tiny crumb."

At least it's a bigger crumb these days. According to Fairtrade Labelling Organizations International of Bonn, Germany, fair trade coffee sales alone reached $730 million in the United States during 2006, with the volume of such coffee being transported here up by 31 percent over 2005. One of its members, Oakland's TransFair USA, which certifies fair trade products in the United States, says fair trade-certified agricultural products are available at more than 35,000 retail stores nationwide.

But fair trade has a long way to go. Even as Global Exchange hopes to hit the $3 million mark in sales by next year in all of its retail operations, the world's largest retailer, Wal-Mart Stores Inc., recorded $349 billion in fiscal 2007 sales.

Erin Kilmer Neel is an Oakland entrepreneur counting on people in the East Bay's largest city who are looking for shopping alternatives to the city's popular Wal-Mart store and other big-box chains - at least for some of their holiday gifts. She and partner Anne Campbell Washington have started a new Web site, www.oaklandunwrapped.com, not only to connect shoppers with local artists and small Oakland retailers, but to provide a way for the city to put a dent in what it says is a $1 billion sales-tax "leakage" to neighboring cities every year.

"My partner and I really wanted to work on economic development issues in the city, and, given the sales tax situation, this seemed a great way to deal with this issue," said Neel, adding that stemming the leakage could generate $10 million a year in additional sales tax revenue and 10,400 new jobs for Oakland.

Neel and Washington created a nonprofit organization to run the Web site, and, if it's successful in Oakland, hope to expand it to other cities. Though launched during the busy holiday season, Neel said, the site will sustain itself year-round by becoming a registry for Oakland artists wanting to sell their creations to customers seeking gifts for weddings, baby showers, birthdays and other social events.

Non-holiday business has also been increasing on Global Exchange's Web site - www.globalexchangestore.org - but Dworkin said as with most retailers, it's the holidays that bring the biggest volume of shopping and the growth in sales. It's big enough to employ 12 people fulltime to package and ship items around the world at the organization's San Francisco warehouse and distribution center, a staff that drops to four the rest of the year.

The Global Exchange retail store at 2840 College Ave. in Berkeley's upscale Elmwood district is no slouch either, according to Carolyn Gravely, who has managed it for nine years. During the holidays, it sells lots of T-shirts made in the United States and Ghana, white blouses from small manufacturers in the Chiapas region of southern Mexico and hand-loomed men's shirts from Guatemala.

"Every year I have been here, our business has gotten bigger," Gravely said. "But during the holidays, it is especially busy. We make the most of it."

dgoll@bizjournals.com | 925-598-1436

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