Will localisation replace globalisation?

Globalisation can be broadly defined as the increasing interaction of people, organisations, or countries through the growth of the international flow of money and culture.

It has enabled consumers to enjoy products from all over the world regardless of the season or climate by allowing products to easily move across borders. As such it has made the world a smaller, more interconnected place.

Free trade, the internet, long supply chains and cheap mass travel have become synonymous with globalisation by connecting individuals and the economy. However, globalisation has paradoxically helped fuel a growing sense of disconnection amongst consumers from where their products, particularly food, come from.

This has created demand for local products, exemplified by the growing “farm-to-table” ethos, as a simple way for consumers to ‘reconnect’ with their local food, community, and culture. As a result many consumers attribute local products with positive attributes. In fact, according to GlobalData’s 2017 Q4 consumer survey, 70% of global consumers consider local products to be fresher than imported ones, while 38% consider them to be heathier and a further 35% consider it cheaper.

Though globalisation has lifted millions of people out of poverty in emerging markets, 62% of global consumers believe that local products help their own local economy. The desire to support local producers over international ones reflects a strong sense of ethnocentrism with people wanting to help maintain local producers in the face of foreign imports.

Many consumers are increasingly skeptical about the benefits of globalisation and see the current system of free trade as ‘rigged’ in favor of other nations rather than their own. This has created tension and a strong desire for local products as a way to protect local traditions, support local businesses, and have high-quality local products as well.

Localism will be an increasingly important factor in the global FMCG market in the long term as the backlash to globalisation grows. Brands will therefore have to re-evaluate their supply chains and product formulations to better meet local consumer needs.