Carla Harris (VO): A study by the Selig Center for Economic Growth found that money circulates six times in the Latino community, nine times in the Asian community, and nearly an unlimited number of times in white neighborhoods.
In African-American communities, the number drops to just once.
Bernard Bronner: When things were segregated, Black people had to buy from Black people cause there was no other choice. And as they integrated and as choices became, we lost a lot of that. And we lost land. We lost businesses.
Carla Harris (VO): This is Bernard Bronner, the president and CEO of Bronner Bros. Today, we'll hear his story as we explore the impact of spending money at Black-owned businesses. And later, I'll speak to author and activist Maggie Anderson about what insights she took away from her year of buying Black.
Maggie Anderson: It was really about all of our money is going to go into the Black community. The point is when you have a choice. Who are you going to spend your money with?
Carla Harris (VO): Welcome to Access and Opportunity, I’m your host Carla Harris. And on this show, we provide context about racial inequities and share tangible examples of how ideas around access and opportunity are being made real every day.
On this episode, we'll look at the compounding effect of the Black dollar when it's reinvested into the community, as well as the opportunities that exist for Black entrepreneurs to reclaim their rightful place in the market and keep their money flowing within their ecosystems.
Carla Harris (VO): It's 2019, and we're at the Fantasy Hair Competition during the Bronner Bros. annual hair show. There are models strutting down a runway, adorned with colorful, ornately decorated hair pieces and attachments that extend their hair to unimaginable lengths and heights.
(Hair Show Audio: Emcee continues introducing contestants.)
Carla Harris (VO): Contestant 13's hair is slicked upwards to form a huge circle from which a 3D dragon shooting flames emerges.
Carla Harris (VO): The show is organized by Bronner Bros., a family-owned company that has operated out of Atlanta for 75 years. The company manufactures and sells multicultural beauty products, but it is probably best known for its hairstyling competitions, which have become a symbol of innovation in the Black community.
Bernard Bronner: We have had people that cut hair underwater. We have had people hanging upside down, cutting hair. We've had a person built a hairstyle out of a bird cage and believe it or not in the middle of the hair show, the cage opens and the bird flies out into the audience.
Carla Harris (VO): Here's Bernard Bronner again, reminiscing on some of the many hairstyles he's seen at the helm of Bronner Bros.
The hair battles are part of the Bronner Bros. International Beauty Show, an event that dates back to before Bernard was born, when the founder of the company, his father, was still running the show.
Bernard Bronner: My father ran the first generation and the YMCA is one of the early places that they had the show and it was just a seminar to teach the 50, 60 different beauticians how to use beauty products.
Carla Harris (VO): A second generation of Bronner brothers -- composed of Bernard and his five brothers --- took over the business in 1993. And that meant taking over the flagship beauty show, and evolving it.
Bernard Bronner: During the day, we have hundreds of classes on how to use a relaxer, how to take care of natural hair, the business. We also have an exhibit hall where they're three to four hundred different companies that display products. The hair show's pretty much the same format as it used to be. It's just thousands of times bigger now.
Bernard Bronner: My father, his generation did not make any products. He was a purely retail store and distribution network company.
Bernard Bronner: So he would have vans and cars that would service six, seven thousand salons. So they would go to the salons, sell them products. And these were the same salons and barbershops that they would go to and sell tickets to the various shows that we put on.
Carla Harris (VO): Business was good for Bronner Bros., and at the time, one of the best-selling products that Bernard's dad distributed was Lekair Super Gro. Super Gro is a multi-nutrient product that people put in their hair to stimulate healthy hair growth.
Bernard Bronner: It seems like everybody in the world uses this product.
Carla Harris (VO): Then, something happened that made Bernard's dad change his whole approach to running the business.
Bernard Bronner: In our early days Lekair felt it would be better distributed by one of their friends. So they took the distribution agreement away from us and left us without a super gro.
Carla Harris (VO): Even though Super Gro thrived because of the Black community, Black businesses like Bronner Bros. that didn't own their products relied on others for their survival.
Bernard Bronner: So the tragedy of losing the distribution agreement with another company, forced us to make our own super gro, which became BB Super Gro.
Bernard Bronner: And years later, we have become the number one super gro on the market and BB Super Gro can't be beat. If you go all around the world, people still talk about and buy and say their grandmamas used to use that BB Super Gro. It's just been a favorite over generations.
Carla Harris (VO): The customer loyalty around Super Gro has allowed Bronner Bros. to hold their own among bigger beauty brands. And that carries weight given how few Black-owned products are brand recognizable. So, the need to secure full ownership went beyond Super Gro. Ownership was a blueprint for success for Black businesses.
Bernard Bronner: I do remember my father teaching, not just his kids, but everybody, the importance of ownership. So even though he didn't own the manufacturing company that made the product, he did own the distributing company to distribute it. He did own the stores that sold it, and he put that in our heads of owning. He had a saying, it's better to own a shack than rent a mansion. So he put ownership in our head. And as I was out distributing all of these products, I kept saying, we need to own some of these products.
Carla Harris (VO): In 2017, The Atlantic reported that the per-capita number of black business owners declined by some 12 percent from 1997 to 2014.
But things weren't always this way. In the early 1900s, also known as the "golden age of black business", data from the National Negro Business League showed that the number of black-owned businesses across multiple industries doubled between 1900 and 1914.
Now this was during segregation when Black communities were forced to self sustain and serve their people. So they began to build their own businesses. It was during this time that Black economic centers flourished across the country, especially in cities like Tulsa and Atlanta.
Bernard Bronner: At that time, we had a lot of ownership. We owned a lot of land. We owned a lot of businesses. And when things were segregated, black people had to buy from black people because there was no other choice. And as they integrated and as choices became, we lost a lot of that. And we lost land. We lost businesses, and my father just felt like we needed somebody to take a stand and set an example of owning.
Carla Harris (VO): Indeed, over time, Bronner Bros. has come to own all facets of their business operations, from manufacturing to distribution. The way Bernard sees it, that ownership is the key to keeping the dollar circulating within his community so that he can reinvest it in his people.
Bernard Bronner: My father always told us that a community is no better than the people in it. And he always wanted to say that if you want to help your community, you got to help the people in your community. He just believed in providing jobs. And it was an unspoken rule that single-parent women with kids could always get a job at Bronner Bros. during those days. I love providing jobs. It just makes people better when they can provide. It makes people happy when they have a check rolling in. I believe in the best way to help the community is help the people in the community.
Carla Harris (VO): Bronner Bros. employs over 300 full-time and part-time staff members. And Bronner Bros.' famous beauty shows? Well, they provide for the community too.
Bernard Bronner: We've been a springboard for businesses. They get experience, they get networking, they meet a lot of new customers. A lot of businesses come to the hair show and get their start at the hair show, and I hear that so much. It makes me feel good. And let me know I have to make sure that this legacy carries on.
Carla Harris (VO): It's not lost on Bernard that creating these opportunities, both within the Black community and beyond, is not possible without economic unity.
Bernard Bronner: I want people to buy Bronner Bros.’ products because we re-invest in the community. We live in the community. We take care of all.
Bernard Bronner: I believe you should love everybody on Earth, but I also believe you need to start at home with your own. You have to support your own first, and if you can support your own and build, you can love everybody better.
Carla Harris (VO): Bronner Bros. hopes to economically empower and enrich the lives of the people they serve so that those folks may be engaged and invigorated members of society. But in order for that to happen, consumers from all backgrounds have to be conscious about where they spend their dollars.
Our next guest knows a thing or two about intentionally using one's buying power and leveraging it to invest in community.
In 2009, Maggie Anderson and her family conducted what she now calls "The Empowerment Experiment". They committed themselves to exclusively buying from Black-owned businesses for an entire year in order to inspire more Americans to support Black-owned businesses. She wrote her book Our Black Year to share her findings.
I sat down with Maggie to talk about her quest to buy Black, why it was even more challenging than she thought, and the actionable steps we can all take to change that.
Carla Harris: Maggie Anderson. Thank you so much for being here with me today. It's a pleasure to have you on the show. Are you ready? Can we jump right in?
Maggie Anderson: I am so ready and I'm so happy to be here.
Carla Harris: Can you share a bit about your upbringing, and because we're talking about buying black, was that something you saw in your household growing up?
Maggie Anderson: So, the buying no, but the black yes. So, my parents are Cuban immigrants and they settled in a black part of Miami, Florida called Liberty City. So we grew up surrounded by black people like us, but they were African Americans where we were black Cubans. So while my parents taught us to be proud, black people, we did like Cubans did in terms of shopping. I had a Cuban pediatrician, a Cuban dentist, my quinceañera, all the vendors were Cuban. So we did practice self-help economics, but the community we identified with was the Cuban community.
If we did have a black community that was showing that kind of economic unity, we probably would have supported more black owned businesses, but I didn't see black owned businesses in my totally black neighborhood growing up. So lots of black people, black friends, black culture, but no black businesses. So this buying black part really didn't occur to me till after business school as an adult.
Carla Harris: But the idea of money circulating and staying in your community was very visible in your upbringing. So, so you could argue that mentality clearly was there.
Maggie Anderson: That is absolutely the way I grew up. And that's why when I was thinking about my own community and the plight of other black people like me, that's when it really hit me that that's the only thing that was different. We're all proud people. We love our cultures. We love our country. But what was missing was what I saw growing up as a black Cuban American. And that was the economic unity.
Carla Harris: So according to Selig Center for Economic Growth, in 2019, black buying power was $1.4 trillion. And it's projected to grow to 1.8 trillion in the next couple of years, but only 2% of that is reinvested in Black communities. So I want to dig into what it means when we talk about money circulated. You know, how does that relate to reinvesting in that community?
Maggie Anderson: Absolutely. So the phenomenon that is, in my opinion, destroying the black community is that, the scientific word is economic leakage. And you talked about how economic leakage occurs. Money that starts off in the black community doesn't come back. It leaves the black community, it leaks out of the black community. And that happens for several reasons. We have several forces playing against us.
North Philadelphia is a place that was recently studied by the Pennsylvania Black Chamber of Commerce. Over 90% of the businesses in North Philadelphia, which is like a hundred percent black, we're not black or locally owned. Those people who live there, let's say all of them don't have a car, they are forced to support the businesses in that neighborhood, but most of those owners do not look like or live in that community. So those people are spending their money and absolutely immediately that money leaves because those people who own those businesses go back home to their suburbs and enclaves, and that money goes into their school systems, tax bases, into their retirement portfolios. And that's where that money lives. So that's the first layer.
The second layer, let's say that person does want to leave the community and go to like a big retailer that doesn't exist in the community, like a Walmart, that money leaves the community that way too. So it's either leaving the actual physical community and spending money outside of the community or spending money inside the community, but technically outside of the community, because those businesses do not represent or reinvest in the community.
The third level is that there are fewer successful or accessible black-owned businesses that people, if they wanted to, could support. So those three forces prevent black people from keeping their money in their community.
These forces did not exist in the early 1900s, in the mid-1900s. All of the businesses were locally owned. One wonderful statistic for you is black-owned grocery stores represented the largest category of black-owned businesses in the early 1900s. We had 6,400. We have maybe 10 now in all of the United States. Black people could spend their money in a grocery store. They can go to the dress shop. They can go to the bakery. They can go to a hardware store, a department store, gas stations. These things, when you put them next to the word black business, are oxymoronic now. So back then the dollar circulated for three years or more before integration. Back then unemployment for black people was less than that of whites nationally and regionally. Back then when we had locally owned, black-owned businesses that represented all the categories of everyday life, the money stayed in the community and that's why we were able to have successful businesses and successful universities. And that's how we actually funded the civil rights movement.
The economic leakage is what's different between us and other ethnic groups. And it's the difference between us now and us then. The us then, we had the wherewithal to fund the fight for our freedom. Now we don't. Now our movement for justice, for equality is dependent on sponsorship, on outsiders supporting our rights organizations. Our movement, our freedom is not self-funded anymore. And that's why it's not self-determined.
Carla Harris: Wow. I have to tell you Maggie you have completely taken my breath away. Or as I like to say, I am clutching my pearls because, you know, as a highly educated woman, of course intellectually, I say integration is a great thing because nobody should be denied access to anything. But to hear you talk about the economic price that has been paid by giving access. And you know, I can't help, but sit here and wonder if, the playbook point gets back to the lack of access to capital, right? Because it takes money to open up, you know, all of these businesses. So talk to us a little bit about your perspective on why other ethnic groups have been able to do this.
Maggie Anderson: It's such a heartbreaking paradox because we just wanted to prove that we were worthy of the American dream, that we're just as American as anyone else. And the way we were to prove that was not by doing what our Asian immigrant friends did, or our Hispanic immigrant friends did the way they prove their American worth is by building a business. That's the American dream.
The way we proved our American worth was by supporting other folks’ businesses. See we deserve to be just like you. We're good enough to be just like you. We're good enough L'Oreal to wear your hair care products. And in so doing, in making that point that we're good enough that we're American too, we slowly but surely started to abandon our own businesses. And the vicious cycle that started off when we didn't put our money into black institutions just grew and grew and grew. So we lost the businesses. We lost the entrepreneurial spirit. So we stopped being owners, and now there's nothing in our culture that says, ‘No, own a business.’ Nothing in our culture that says, ‘No, buy black.’ All of the other ethnic groups, that's a given. It's like breathing.
Carla Harris: I hear you. And what you're saying is it's not just a lack of capital. It's also the lack of intent. So now let me bridge to the heart of your story, the Empowerment Experiment, where you did have the intent to do nothing but buy black for a year. So how did you come to the decision to address the problem with your own consumer habits?
Maggie Anderson: My husband and I, at that time, we had both finished graduate school. I was working at McDonald's as an executive. John was a big time consultant with Ernst and Young. We had just bought a big pretty house. We had two little babies. We're living our fancy fairytale life. Very proud black people. Members of all the rights and business organizations. Active in our black church. Uh, we're raising our daughters to be very, very proud black people.
So here we are in Oak Park in our nice house with our nice schools and the nice parks, and across the way is the West Side of Chicago: blighted, all black. So we're looking at the West Side every day and wondering why our people who we do not distance ourselves from are suffering the way they do, and that's when we think about this conversation. ‘We're doing everything right. We’re mentoring. We're in the groups. We give money.’ But we weren't buying black. And my husband and I were at a nice dinner, celebrating our anniversary, at a white-owned, fancy restaurant, talking about how we're not doing enough for our community and we're not buying black. And so I was getting all fired up. I said, ‘We're not doing enough. And here we are, we're hypocrites. And how dare we say that we're proud black people and we never go to a black owned restaurant to celebrate. We don't have our money in a black-owned bank,’ so I'm going off and off and off. And my husband says, and this is how the Empowerment Experiment was born, ‘Baby, if we commit to buy black for this whole week, all we do is spend money with black businesses. Can we get on with our anniversary?’ That's how it started! I said, ‘Okay, you promise?!’ And then I shut up and we had a beautiful anniversary, but that's how the idea started.
And then when Barack Obama started to become president, we really started to put some energy to it. I wrote out this kind of abstract on how it would be, and John reached out to one of his favorite professors at Kellogg, Steven Rogers. And we talked about how this can actually be a study where we can collect the data. So we're proving our point, not just with rhetoric and our fists in the air, but with actual data. So we were planning it. We were going to start and we did start January 1st, 2009, it was going to be an actual calendar year. And then my mother was diagnosed with pancreatic cancer, October 2008. They gave her a month to live.
Carla Harris: Oh, wow. I'm sorry to hear that.
Maggie Anderson: She saw all this planning. And she said to me, and I won't forget it. She said, ‘If you fight, I'll fight.’ Those doctors gave one month in October 2008, lived till February 2010 long enough to see her baby fulfill that pledge and do, in her mind, the most important thing I would ever do. And that's why we actually did it.
Carla Harris: That is not only powerful, but inspiring in itself. And you can please believe that it's going to be bigger than what it even appears to be. So let me ask, what rules did you set for yourself and what were some of the challenges that you endured?
Maggie Anderson: It was really about all of our money is going to go into the black community. Any bit of money that we spent. If we're going to buy a burger, if we're going to buy a shoelace, if we're going to get some gas, that money was going to go to a black company. There were certain things that we took out from the get-go, cause not only would it make it impossible, that wasn't the point. The point is when you have a choice. Who are you going to spend your money with? So everything else besides flights and our utility bills had to be black. We put our money into a black bank. We made sure that our investment portfolio was managed by a black fund company. So we were very, very serious about this, so we did it for real. We had no idea how many markets and industries, black firms, black people suffer from a complete lack of representation.
So the other thing about the Empowerment Experiment was the actual searching cause we wanted to document not only that my husband's going to use Shavewise for his shave cream instead of Magic Shave, but it was also how long did it take us to find Shavewise? So we really wanted the study to bear out all of that. So that's why we wanted to make sure that when we started the year, we didn't have all of our businesses laid out and it was just a matter of shopping. It was a matter of seeking as well. And it was so sad, this part of our journey, just going up and down the west side and the main economic thoroughfares door to door, every little grocery, every little mini mart, little place like that, where we thought we needed to shop, seeing what we already know.
There was one black-owned grocery store in all of Illinois. One. In the whole state. So we found this grocery store and it was amazing. It was this beautiful place. It was really far, but we fell in love with it. And then, towards the middle of the year, the store started to fail. The store closed in September, so for five months we were without a grocery store. It was so sad watching Farmers Best Market die. What were we going to do? What we did was a lot of our gas stations, you know, they had many marts in them. So we found our black-owned gas station, which was also very very far away. There was only one. Let's say it was about 45 miles away from our home. So we gon’ spend all our gas just to get some gas. So we introduced ourselves to the owner; he loved what we were doing. We would send him like $500, and he'd give us a gift card. He had a Citgo gas station. Citgo is part of a national chain. So we went to the Citgo closest to us, but we already spent our money with the black-owned Citgo. So the money went to him. We used the card at other Citgos and, and that's where we did our shopping. And then we just kind of just learned to live without. We looked for everything. So we found a lot of great businesses.
The hardest part was really just the sadness of seeing how horrible the circumstances we live through in these retail and food deserts. We lived that and saw that every day. That was the worst part of the Empowerment Experiment.
Carla Harris: Well, I'll tell you, Maggie, you have been more than instructive in some of the things that you've talked about– no, I’m serious– when you talk about the Empowerment Experiment, because not only have you highlighted, you know, the difficulty, even if one today 2022 wanted to buy only black, but also the extraordinary costs associated with doing so a), because of the lack of what you called everyday goods and businesses and services to just suit what you would do on a daily basis, but also the additional time cost of actually doing the research. But let me flip that because I am a glass half-full kind of girl.
Maggie Anderson: Yes! I was hoping you would.
Carla Harris: The other thing that you have done is you've actually highlighted the massive opportunity for all of the young entrepreneurs that are out there in terms of the kinds of businesses. You know, this is a huge opportunity for those who do have the entrepreneurial spirit. And when I look at Millennials and Zers, they have a vibrant entrepreneurial appetite and you've just laid out a nice playbook for some of those businesses to go back into some of those spaces. But let me just ask you this question, what is your vision going forward and what can people do?
Maggie Anderson: I love how you used the word opportunity. After that year, after meeting those business owners, after we conducted our study, we learned so much. What came out of it was the fertile ground. The opportunity is, like you said, with the young people. The second piece is through supplier, franchisee and vendor diversity. And now that their eyes have been opened, because of 2020, and we’re slapped in the face with the rise and rule of racism, these corporations are finally starting to at least make some commitments around supplier, vendor and franchisee diversity. So that means more black-owned businesses on the shelves, more black-owned franchises of these big brands, and more black suppliers in the supply chain. So there should be some black companies– trucking companies, cleaning companies, tech companies– helping those businesses deliver the goods and services. That's the huge opportunity space. Everything would change if we just had a few more big companies making actual investments in supplier, vendor and franchisee diversity. If we could get more representation on the shelves, that's another huge way we can start to see some economic empowerment.
The reason is that black businesses are by far the highest private employer of black people, 70% more likely to hire black people than other companies. Black people are the most unemployed and the most underemployed that number drags down our national average for unemployment. That's a big indicator of the country's economic health. So if we really care about the unemployment number, we all, black, white, everyone, should be supporting those businesses that are most likely to hire the least employed. It's just buying American. Buying black is buying American. So we all need to be looking for local black-owned businesses. We need to be in our organizations asking about engagement of black firms and entrepreneurs in those supply chains. When we're having those meetings talking about Black History Month, we should ask, ‘How many black businesses do we have in our supply chain? I know of a great bakery. I know of a great IT firm. I know of a great marketing firm.’ And I'm sure that procurement person will say, ‘You know what? That's a good idea. Let's bring them in.’ And next thing you know, that business has a huge contract with a corporation and they're able to hire 12 more people that they wouldn't have been able to hire. And that's how we change everything. So that's the business opportunity.
But there's also an opportunity for us as consumers. We can all have money in a black-owned bank and let's focus on those markets and industries where there is a higher presence of Black top quality successful companies, like our hair care, our beauty products. We have tons, top quality. It's not hard. It's just different. If we're to do those few things that are not hard to do, we could make a huge, huge, huge impact. So those are the tips. That's the opportunity for us. And the opportunity in corporate America and for small businesses is really, really more investment and energy around supplier diversity, vendor diversity and franchisee diversity. We do that. We win and we all do it together.
Carla Harris: Just ask the question. I heard that. Maggie Anderson, thank you so much for taking the time to speak with us today. You have been terrific.
Maggie Anderson: Oh, love you. Thank you so much. I really enjoyed spending time with you.
Carla Harris: Same here.
Maggie Anderson: Thank you.
Carla Harris (VO): I want to thank both Maggie Anderson, and Bernard Bronner for joining me on this episode of Access and Opportunity. What did you think of today's episode? Send us your thoughts at carlapod@morganstanley.com. And to continue learning about individuals working to drive systematic change within their communities, subscribe to Access and Opportunity on Apple Podcasts or wherever you listen. Thanks for coming along.
