According to retailers across the spectrum of industries and outlets, consumers are increasingly responsive to the “Made in USA” message. There are many possible explanations for this trend, including fallout from the recession, generational shifts and the changing global economy, which provide opportunities for retailers everywhere.
What is Made in USA?
According to the Federal Trade Commission, a product can be labeled as “Made in America” if at least 75 percent of the finished product is “US content,” including parts and labor, based on the cost of the goods sold. The product must also be final assembled in America. It seems straightforward, but this can lead to some confusing situations. For example, many of Toyota’s cars, which are manufactured and assembled in the United States, are more “American” than Ford’s cars, even though Toyota is a foreign-owned corporation.
This is why organizations like the Made in the USA Foundation and activists like Roger Simmermaker, author of How Americans Can Buy American and owner of howtobuyamerican.com, became active in identifying American-made products. “When it comes to buying American, I tell people to start with the smaller items,” advises Simmermaker. “I also advocate buying American-made products from American companies, which can be harder than you think. Swiss Miss is American, and Carnation is owned by the Swiss.”
But this doesn’t mean it’s impossible to find American products. Simmermaker, for example, publishes a popular retail e-guide that connects buyers with manufacturers of American-made products, while the Made in the USA Foundation runs a large certification and labeling program.
Joel D. Joseph, chairman of the Made in the USA Foundation, says that virtually any product can be sourced in America, and there are more and more resources to help retailers locate America-made products. The foundation has worked with government agencies, including the Federal Trade Commission, and promoted American-made products since its founding in 1989.
“We have people asking us for American suppliers,” Joseph says, “and 99 percent of the products we look for, we can find something.” There are, however, a few industries where it can be harder to source American. Top among these is electronics, which tend to be dominated by Asian manufacturers. Apparel is another. The US apparel industry moved overseas in mass numbers decades ago, seeking cheap labor.
A major perception hurting American-made products is many people just assume American-made products are more expensive. This might have been true in the 1980s, but it’s much less true today, say both experts. First, wages in manufacturing countries like China and India have risen at the same time American wages have stagnated (once adjusted for inflation). Second, shipping costs have increased along with the price of oil, so every overseas product has a shipping surcharge built into its price. The result is that American products are competitive in many industries.
Intangible benefits of buying American
There are currently no numbers on the size of the Made in America market, but there are still plenty of obvious benefits for retailers to feature American products. The most obvious, of course, is supporting the American middle and manufacturing class, especially younger people, who suffered the worst during the so-called great recession of 2008-2009. “It used to be that Americans 60 and over preferred American-made products,” Joseph says. “But now we’re finding that males age 18–30 are the strongest supporters of buying American. We think it’s because they came to the realization that if people don’t buy American, they won’t have a job.”
The numbers bear this out. In 2013, the unemployment rate for men aged 25 to 34 was 9.2 percent. For adults aged 18 to 24 without a bachelor’s degree, the unemployment rate was a staggering 19.7 percent. When you consider that about two-thirds of the economy is consumer spending, it becomes clear that ordinary Americans choosing to buy American-made products directly benefits American workers.
Buying American is also better for the environment, and can be more humane. From an environmental viewpoint, the carbon footprint associated with American-made products is much smaller than it is for comparable products that have to be shipped across the world. No matter your opinion on climate change, companies and countries are looking to reduce their carbon footprint, especially in light of international proposals like “cap and trade” that would make it expensive to have a larger carbon footprint.
Finally, global manufacturing companies operating overseas are coming under increasing scrutiny for their vendors’ working conditions. Companies including Nike, Walmart, Sears, Disney and Apple have all been criticized for hiring overseas vendors that operate unsafe factories, or treat their employees unfairly. In 2010, Apple was the subject of a damning series of reports on conditions in a Taiwan-based factory that helped the company produce its iPhones. According to the reports, the company, Foxconn, operated in a fortress-like setting, working employees (including children) relentlessly and triggering a rash of work-related suicides. Partially as a result of this scandal, Johnson says that Apple just announced the construction of new US-based manufacturing plants. Another giant, Walmart, recently announced that it plans to buy $250 billion of American products in the next year.
Promoting the message
Tim Smith, president of SJT Enterprises, Inc., is answering the demand and says his company is making a smart marketing move by strongly advertising its products as Made in America. At this year’s IGES/SSS gift and souvenir trade show, promoters are expecting strong interest in the dedicated Made in America section. These dedicated sections are popping up in trade shows across the country, usually in response to strong consumer demand.
Gingerich Leather is among the companies planning to be in the Made in America section at IGES/SSS this November. The Indiana based company specializes in handcrafted, high-quality leather goods, including belts and iPhone accessories. The products are all made from American leather. “We pride ourselves on quality craftsmanship,” says company President Tim Miller. “Our prices might be as low as Chinese made products, but the market is there for high quality, handcrafted belts that might cost a little more than an imported product, but will last much longer.”
In fact, this is a common refrain in the growing American-made movement: American products are often higher quality, usually competitive (or almost competitive) on pricing, and come with the built-in advantage of simply being American. According to Joseph, it would be a mistake to underestimate just how much consumers prefer American-made products.
“We recently conducted a survey with Harris Interactive, and found that 75 percent of Americans would pay more for American products,” Joseph says. “Americans prefer American-made products over all other countries, even including Japan and Germany, which both have excellent manufacturing reputations.” Yet it’s also true that for many people, there are still lingering issues with the “Made in the USA” label, beginning with price. There is the perception that American-made products are much more expensive, and that, “nothing is made in this country anymore,” Joseph says. The truth is more complicated.
With growing interest and availability of American-made products, the question becomes, how can retailers benefit the most? The first task is to stock American-made products, and then let consumers know. The Made in the USA Foundation and other advocacy groups can help. For the cost of a $50 membership, retailers receive two door signs that proclaim, “We stock American-made products.” They also get shelf tags to help identify specific products, as well as a listing on the organization’s website identifying the retailer as a source of American-made products.
Other organizations certifying American-made include the American Made Matters group, launched on July 4, 2009 by the Bollman Hat Company. Located in Pennsylvania, Bollman operates the oldest and largest hat-making factory in the United States, says company president and CEO Bon Rongione. The company has been producing hats in America continuously since 1846. According to Rongione, American Made Matters was launched to help educate consumers about the powerful benefits of supporting US companies.
On American Made Matters Day, November 19, the organization hosts events in conjunction with its 300 partners and network of ambassadors. “We ask everybody that day to buy one American-made product,” Rongione relates. “Our ambassadors will be conducting tours of American factories, holding talks, and hosting events about why it’s important to strengthen the country, reduce our environmental impact, and obviously provide jobs.”
Products that meet the American Made Matters criteria can display the American Made Matters logo. This means that at least 50 percent of a product’s final cost is derived from American products or labor, and that the product is final-assembled in the Untied States. This standard is a little lower than the FTC definition of 75 percent American products and labor, but Rongione says there’s a reason for it: apparel has been one of the hardest hit sectors of the economy, so every little bit helps. “We wanted to create a standard that was easier to comply with, and make it possible for manufacturers to meet it and increase demand,” he advises. “We hope it will grow from there.”