|Wal-Mart now offers 400 organic food products priced only 10% above standard food products. Critics fear the company will do to small organic farmers and retailers what it previously did to local mom-and-pop retail stores.|
Organics Fail to Yield Cash Crop for Food Giants
$14 Billion Category's High Prices Turn Off Consumers
Wal-Mart Starts Its Organic-Food Push
Multi-Million Dollar Campaign Puts Emphasis on Low Price
"Wal-Mart Declares War on Organic Farmers," reads a recent study by Cornucopia Institute, a group charging that Wal-Mart's sourcing of organic products from industrial-scale factory farms and Third World countries-especially China -- cheapens the value of the organic label.
"They aren't interested in organics, but [in] getting a product on the shelf that says 'organic' at the cheapest price they can get it at," said Craig Minowa, an environmental scientist at the Organic Consumers Association, which claims half a million members. "They are taking advantage of loopholes in the organic standards."
Competitors, naturally, are piling on. Whole Foods, the trailblazer in mainstream organic foods, is raising the bar in an obvious bid to differentiate its organic philosophy from that of Wal-Mart. The Austin, Texas, chain has announced it will source products from at least four farmers within the regional footprints of each of its 187 stores. And Target Stores this month is beginning to roll out its own organic line.
Definition of 'organic'
At issue is a clash of views and definitions of "organic." There's a big difference between organic products grown on small-scale farms and shipped locally and those transported thousands of miles from China, according to Elizabeth Sturcken, managing director-corporate partnerships at the Environmental Defense Fund, which has announced it will open an office in Bentonville, Ark., to aid Wal-Mart in its sustainability efforts.
"Wal-Mart was perhaps naive," Ms. Sturcken said, adding: "Organics is a complicated thing to do right."
"Wal-Mart has always supported U.S. agriculture, and we are the largest buyers of U.S. agricultural products in the world, from suppliers large and small," a Wal-Mart spokeswoman said. "Whenever possible, as with all fresh merchandise, we try to purchase fresh organic products from local suppliers for distribution to stores in their areas. This is good for the surrounding communities and helps to generate savings on distribution costs that we can pass on to our customers."
Small organic farmers
The David vs. Goliath narrative is being resurrected as a metaphor to describe Wal-Mart's move into organics -- but this time, instead of the hardware-store owner or the independent bookseller, it's the small-scale organic farmer who is threatened.
Cornucopia has criticized Wal-Mart, now the nation's No. 1 seller of organic milk, for stocking Horizon, the Dean Foods-produced No. 1 brand in the segment, which Cornucopia says is produced on "factory farms," sometimes with more than 4,000 cows on site.
So what exactly do the critics want?
"They could put their ear to the ground," said Mr. Minowa of the Organic Consumers Association.
"Wal-Mart needs to make a bold move to let organic consumers know it's serious about living up to the movement's principles," he added. "They are trying to come across as more eco-friendly, but they aren't living it."