Walmart and organics – progress or hype?

In 2006, in an effort to modernize and broaden its appeal to a wider urban customer base, Walmart announced it was launching a push to sell more organic food. And although numerous consumer groups met the announcement with some skepticism, a number of manufacturers rushed to create organic versions of their products to meet the megaretailer’s demands.

Six years later, it’s interesting to look at how successful Walmart has been.

As organic produce gains more acceptance by consumers and greater presence in regular supermarkets, Walmart definitely had the right idea. It’s the execution that’s been the issue.

Organic produce at Walmart is only a small portion of the produce section

Walmart has traditionally depended on large suppliers to meet its demand for large quantities of product. When dealing with organics, particularly organic produce, the supply simply doesn’t meet the company’s demand.

On a recent visit to my local Walmart Supercenter, I went into the produce department to see how much of the produce was actually organic.

At first, I didn’t see any. But, spying a gentleman busy stocking produce, I asked him about this. Walking me back down the long line of displayed produce, he pointed out three small offerings that were indeed marked organic, albeit with miniscule signage.

When I asked him if there was generally more organic produce available, he said sometimes but it varied and was generally still a small portion of the entire produce offered. When you consider the large and varied array of produce the megastore offers – with its piles of perfect, large crates of tomatoes, onions and melons, huge bunches of collard, chard and other greens, bright-colored citrus, etc. – it puts their much touted organic “push” into perspective.\

Walmart sells 18 percent of all the groceries bought in the United States.  In 2006, when it announced its push on organics, the company was already the #1 seller of organic milk. The expectation of many was that by expanding its organic offerings, this would bring the price point down to a rate more consumers would be willing to pay.

The issue for Walmart and organic produce is insufficient “local” supply

In 2008, the company announced its commitment to “buy local”, yet another encouraging step forward. The company promised that 9 percent of its US fruits and veggies would be local by the end of 2015. And, again in 2010, it announced plans to sell $1 billion worth of produce from small and medium farms worldwide by the end of 2015, as part of the company’s Global Sustainable Agriculture Goals.

But to date, here’s how it actually breaks down for consumers.

Walmart defines as local any produce that’s sold in the same state as it’s produced. That means it could be produced 500 or 1,000 miles away from where it’s sold – but it still bears the “grown local” sign!

And while the company is buying from a broader spectrum of growers nationwide, they tend to be large-scale farmers who can match the prices of the California giants. Case in point. Walmart purchases “local produce” from farmers in North Carolina, Arkansas and Washington. All three are large operations and none are organic.

Walmart’s produce section today, with slim pickings for organic

Apparently Walmart’s “organic push” has focused on expanding its stock of nonproduce items like milk and baby food. Those are available in the large quantities the retailer needs. Small organic farmers cannot guarantee nor provide the quantities Walmart is used to and requires. It’s not as if the giant retailer could just open its giant warehouse and pull out as much as they need when they want it.

So is this another case of Walmart hype versus fact? Perhaps in part. But make no mistake. Walmart is in business to make a profit. If and when the megaretailer is able to work out its supply issues, or at least figure out how to expand on what’s currently available, you’ll very likely see more in the way of organics on the produce aisle. With its huge resources and clout, plus growing consumer demand, it’s a case of never say never!

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One Response

  1. Great post! I didn’t even realize that Walmart made a buy organic and buy local “commitment.” Thank you for shedding light as to how big box retail chains are hopping on the pro-local movement for profit.

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