Monday, October 18, 2010

Walmart Looks to Increase Its Local Produce Offering

Thanks to Marion Nestle's blog Food Politics for turning me onto today's topic. I was both thrilled and not so thrilled to read the NY Times article that she quoted for her recent article.

It seems that in 2005 Walmart created a set of goals for their operations to make their business more sustainable and environmentally friendly. Among them waste reduction and packaging opportunities, as well as a reduction in the greenhouse emissions made by their stores and distribution centers, and increasing the fuel efficiency of their transportation department. Local produce, it seems, is also part of their long term goals. Walmart is looking in to increase the amount of local produce that it offers. The store has set a goal of doubling the local produce offering here in the US, or increase to about 9% of the total. Produce will be considered local if it has been grown in the same state in which it is sold. Walmart has also said that it wants to source what it can from small farms, i.e.-farms of 50 acres or less.

The NY Times criticized Walmart (doesn't everyone?) saying that their goals did not go far enough for it's US Operations in increasing the amount of local produce as a percentage to the total. They stated that company has been far more agressive in it's programs in say, Canada, where they hope to increase locally grown produce to 30% of the total and possibly 100% of the total when it is in season. But here is where you really need more information. According to Wikipedia, the US portion of Walmart stores accounts for 67.2% of the total 258 billion dollar business. Wikipedia goes on to say that Walmart Stores in 2005 in the US numbered close to 3800 (they do not give store data for dates later than 2005, but I imagine a few more have been opened). In Canada, the number of locations is closer to 300. Still a large retailer, but it is altogether possible that 9% of US produce could be greater than 30% of Canadian produce. You can make numbers say anything. You really can. Ask the folks who ran Enron.

I am both delighted and disappointed by the news. I am a proponent of local produce and small farms. I am pleased to see that a large retailer is picking up on what was just a fringe foodie movement just a few years ago. And it doesn't bother me that Walmartwants to take advantage of this movement and make a buck off of it. Produce isn't free and farming isn't a charity endeavor. It is a business like any other, and I invite capitalism to create a marketplace to fill the demand that consumers have for local produce. I have said it before, the biggest problem local foods and organic foods have in this country is a lack of infrastructure available to bring them to market. Here you go, Walmart is looking to bring these goods to market, which means more business for small family farms. However, my trepidation is, will Walmart do to local food growers what it did to say, Vlasic Pickles? Walmart has a history of using their buying power to force companies to slash their own profits just to continue selling to Walmart. Local produce and produce from small farms tends to be more environmentally sound (though not always) and thus more expensive. If Walmart pulls the same move, then it could bankrupt some small producers.

There is no way to tell what the outcome will be. So far these are just goals that the company has set forth. I will be sure to stay abreast of this story as it unfolds in the next several months. I don't really shop at Walmart. Here in New York I have to go out of my way just to get to one. So I will continue to support my CSA and local farmer's markets as I always have. Here's to hoping that this story will have a happy ending.


  1. I think it's great that Wal Mart is trying to start adding local produce to their grocery stores, but I'm with you, I'm really pessamistic about the process. I doubt Wal Mart is going to change their business model just to support local farmers. Their bottom line is to provide the cheapest thing around, and if that means screwing the vendor, they don't seem to care.

  2. I think this situation is different from that of other Walmart vendors. In the case of big corporations like Vlassic, the vendor can offset a selling price decrease by increasing production and cutting its costs (e.g. running plants 24/7 and replacing its workforce with lower paid workers). A small farmer can't do that, or at least they can't do it to the degree that a big corporation can.

    There's only so much land farmed by small farmers and there are other grocers vying with Walmart for local produce. This should work in the small farmers' favor. If Walmart starts pushing its small farmers to lower their prices, the farmers may not care so much especially if other grocers are waiting in line to buy their entire year's production. Not so for large corporate vendors like Vlassic. A small farmer could also go back to selling to restaurants, institutions (schools, corporate cafeterias, hospitals, and so forth), vending at farmers' markets, and selling through his own farm stand.

    The question in my mind is what new 500 lb. gorilla strategy will Walmart come up with to push around small farmers. I don't trust them one inch not only because of past behavior with vendors but also because of their unethical employment practices and their lack of outward concern for correcting them.

    If Walmart can source enough local produce that it would result in a significant decrease in its orders from big corporate farming operations, it may actually put pressure on the big growers to change their practices to mirror those of small farmers. Did I just say that? Sorry. I must have slipped into some bizzaro fantasy world for a moment there.