Wal-Mart to Buy More Local Produce

walmart-span-articlThe local-and-sustainable food movement has spread to the nation’s largest retailer.

Wal-Mart Stores announced a program on Thursday that focuses on sustainable agriculture among its suppliers as it tries to reduce its overall environmental impact.

The program is intended to put more locally grown food in Wal-Mart stores in the United States, invest in training and infrastructure for small and medium-size farmers, particularly in emerging markets, and begin to measure how efficiently large suppliers grow and get their produce into stores.

Advocates of environmentally sustainable farming said the announcement was significant because of Wal-Mart’s size and because it would give small farmers a chance at Wal-Mart’s business, but they questioned how “local” a $405 billion company with two million employees — more than the populations of Alaska, Wyoming and Vermont combined — could be.

Given that Wal-Mart is the world’s largest grocer, with one of the biggest food supply chains, any change it made would have wide implications. Wal-Mart’s decision five years ago to set sustainability goals that, among other things, increased its reliance on renewable energy and reduced packaging waste among its suppliers sent broad ripples through product manufacturers. Large companies like Procter & Gamble redesigned packages that are now carried by other retailers, while Wal-Mart’s measurements of the environmental efficiency of its suppliers helped define how they needed to change.

“No other retailer has the ability to make more of a difference than Wal-Mart,” the retailer’s president and chief executive, Michael T. Duke, said in remarks prepared for a meeting on Thursday morning. “Grocery is more than half of Wal-Mart’s business. Yet only four of our 39 public sustainability goals address food.”

Wal-Mart said it expected to meet the goals by the end of 2015.

In the United States, Wal-Mart plans to double the percentage of locally grown produce it sells to 9 percent. Wal-Mart defines local produce as that grown and sold in the same state.

Still, the program is far less ambitious than in some other countries — in Canada, for instance, Wal-Mart expects to buy 30 percent of its produce locally by the end of 2013, and, when local produce is available, increase that to 100 percent.

“Our food business in Canada is brand new, so there’s a lot they can do,” said Andrea Thomas, senior vice president of sustainability, at a news conference. She said the program allowed each country to set its own specific goals.

In emerging markets, Wal-Mart has pledged to sell $1 billion of food from small and medium farmers (which it defines as farmers with fewer than 20 hectares, about 50 acres). It will also provide training for the farmers and their laborers on how to choose crops that are in demand and on the proper application of water and pesticides.

Both in the United States and globally, Wal-Mart will invest more than $1 billion to improve its supply chain for perishable food. For example, if trucks, trains and distribution centers could help farmers in Minnesota get crops to Wal-Mart more quickly, the result would be less spoiled food, a longer shelf life and presumably more profit for the farmers and for Wal-Mart.

Wal-Mart said it planned to reduce food waste in emerging-market stores by 15 percent and in other stores by 10 percent.

Michelle Mauthe Harvey of the Environmental Defense Fund, who worked with Wal-Mart on the goals, said this was significant.

“As we’ve moved to reliance on key locations like California and Florida,” she said, “we’ve made it very difficult for local farmers to actually get their food to market.”

As Wal-Mart is doing with consumer products, it will begin asking agricultural producers questions about water, fertilizer and chemical use. The eventual goal is to include that information in a sustainability index.

Customers would see sustainability ratings, so they could decide whether to choose one avocado over another based on how efficiently it was grown and shipped. Wal-Mart could use index information when it decided from whom to buy.

Finally, the company announced specific guidelines for the sources of its products, including a requirement that palm oil from sustainable sources be used in all its private-label products (the Wal-Mart house brands) and that any beef it sold not have contributed to the deforestation of the Amazon region because of cattle ranch expansion.

While the overall goals include Sam’s Club, the warehouse store wing of Wal-Mart, that division also has other specific goals, including a 15 percent increase in fair trade or Rainforest Alliance certified flowers and produce.

Some local food supporters said that while the environmental goals were positive, Wal-Mart could not provide some benefits that other buy-local movements did.

For instance, said Linda Berlin, director of the Center for Sustainable Agriculture at the University of Vermont, farmers’ markets help return money to the local economy.

“The local-food movement has been, certainly, about taste and quality of food, about providing good incomes for farmers, and also about other things that have to do with building smaller economies so we as a society aren’t dominated by the more industrial complexes,” she said. “This initiative doesn’t necessarily address that.”

Other environmental and agricultural specialists said it would have a big impact.

“It’s very impressive,” said Margaret Mellon, director of the food and environment program at the Union of Concerned Scientists. “It’s encouraging that Wal-Mart understands that the path forward in agriculture isn’t through making the big bigger, it’s really through encouraging the small and medium-sized farms,” she said. Still, she said she was disappointed that goals around organic food were not included, and surprised that Wal-Mart did not address genetically modified seeds and produce.

The agricultural sustainability index was particularly noteworthy, said one academic who worked with Wal-Mart on the goals.

“The index represents a real number that will mean improvement on the ground: improving ecosystem health, soil health and food quality,” said Marty Matlock, a professor of ecological engineering at the University of Arkansas, which “will move agricultural producers en masse.”

Published: October 14, 2010
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