Opposites attract: Walmart to start selling organic food
By Catholic Online (NEWS CONSORTIUM)
4/10/2014 (2 years ago)
Catholic Online (www.catholic.org)
Organic food and Walmart doesn't sound like a perfect match. Those who shop at Walmart do so because they want something at the cheapest price - or because they can shop nowhere else. Organic food is thought of as being a high-end item, made by educated consumers insisting on the very best. Believe it or not, Walmart, the "junk food" of retail will soon start selling organic foods and products - with profit as the bottom line.
Walmart will first introduce Wild Oats at 2,000 stores at first, only half of its national footprint, and then roll it out to the rest of the country.
LOS ANGELES, CA (Catholic Online) - The world's largest retailer plans to announce this week that it's getting behind Wild Oats organic products, offering the label at prices that will undercut brand-name organic competitors by at least 25 percent.
The announcement is sure to send shockwaves through the organic food world, as organic food stores are typically mom and pop operations, or the work of healthy food collectives.
"We're removing the premium associated with organic groceries," Jack L. Sinclair, executive vice president of Walmart U.S.'s grocery division says.
Furthermore, the Wild Oats organic products will be priced the same as similar nonorganic brand-name goods.
Walmart will carry the Wild Oats label, which is owned by the Yucaipa Companies, a private investment firm, only in its pantry section, with items like tomato paste, chicken broth and cinnamon applesauce cup. Over 90 percent of its offerings at Walmart will be organic, while the rest will adhere to company standards about ingredients and additives. The retailer will begin to introduce Wild Oats products in 2,000 stores in the coming months.
Walmart will first introduce Wild Oats at 2,000 stores at first, only half of its national footprint, and then roll it out to the rest of the country. Sinclair said that concerns about supply kept the retailer from introducing the brand in all its stores at once.
"What we don't want to do is launch it in 4,000 stores and then not be able to supply those 4,000 stores in the short term," he said. "Certain commodities are challenging in terms of being able to access both the raw material and the processing capacity."
Sinclair says that Walmart plans to enter into long-term agreements with suppliers for five years in order to lock in what it will need to meet its enormous requirements.
Walmart's move is likely to raise prices for organic ingredients, which are already going up because of fast-growing consumer demand. Organic food accounted for $29 billion in United States sales in 2012.
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