Wal-Mart right in organic fight

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Wal-Mart is making organic goods available to the masses, using its buying clout and efficient supply chain to drive down the organic premium to within 10% of regular foods. And the organic lobby is having an organic cow.

"Wal-Mart Declares War on Organic Farmers," kvetches the Cornucopia Institute, a group "dedicated to the fight for economic justice for the family-scale farming community." The Organic Consumers Association, which is boycotting Wal-Mart, complains the retailer "has systematically lowered [organic] standards ... by squeezing suppliers and sourcing supplies from factory farms and overseas suppliers."

Who's the real friend of consumers here? No contest: Wal-Mart.

Organic Consumers Association claims "over 850,000 members, subscribers and volunteers, including several thousand businesses." (Sponsors include Organic Valley, a big farm co-op that competes with Wal-Mart's suppliers.) Wal-Mart, meanwhile, has the implicit endorsement of 114 million Americans who chose to shop at its stores during a recent week.

Organic interests complain that Wal-Mart's practices-buying milk from corporate farms, selling organic beans from China-violate the organic ethos: small farms, big pastures, respect for workers, animals and the environment.

Yet the insular organic establishment either couldn't or wouldn't find a way to deliver low-priced goods to the masses. Wal-Mart, with its promise of "organics for everyone," is doing just that.

Wal-Mart organics are USDA-certified, and the retailer makes them affordable: A market basket of organic goods sold for up to 27% less at Wal-Mart than at other stores, according to a Cornucopia analysis.

If you want to buy organics at Whole Foods, good for you. But it will cost you. Whole Foods works on a gross margin of 35%: Spend $100, get just $65 of goods. Wal-Mart Stores has a gross margin below 24%: Spend $100, get $76 worth of goods. That extra $11 goes in the consumer's basket.

That's a good deal for consumers. And because of Wal-Mart, a good deal more consumers can afford to go organic.
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